There are two kinds of traders.
1. Those who make emotional decisions based on
any of the above.
2. Those who make money off of those who make
emotional decisions.
Price Is Always Right
It is hard to accept that one aspect of the markets, price, could be the one
thing that is guaranteed to make you a successful market timer or trader.
There are so many indicators, so much available analysis, but "price" is always
right. It is "never" wrong. At the end of every trading day, price contains the
input of millions of traders, the input of all technical and fundamental analysis.
Look at the 80% decline in the Nasdaq in the 2000-2002
bear market? Or the 50% decline in the 2008-2009 bear
market? The losses were all over the financial press.
But were the gains on the other side of those losses
mentioned. Our Bull & Bear
Timer was up over 120% during those bear markets.
Losses are news, gains apparently are not.
Market timers following price trends profited during these declines. They were
windfalls. But you will never read about it in the press.
Following Price
Price is objective. You can faithfully follow prices and make timing decisions
based on them. You are able to determine trend changes, and most importantly,
to exit those positions if the trend was a false one.
| "...when
the trends take off, the profits are made." |
And false trends do occur. Usually at market tops and market bottoms. But the
losses in "trendless" markets are kept small by those who use "price" to establish
trading strategies and risk management trading rules.
And when the trends do take off, the profits are made.
Market analysis is always subjective. It can not be trusted in trading decisions.
Indicators work some of the time, but also can fail miserably. The financial
news media is not even worth mentioning.
Only price can be trusted. Only price is always right. Only using price to determine
trends can lead you to profitable timing and a successful investing future.
Conclusion
Market timers must follow the trading strategies faithfully. Every sell signal
must be followed immediately, and every buy signal as well.
Guessing how far a trend will go is useless. No one knows. Price makes the trend.
Discipline is the name of this game. Those who stand the test of time and make
the trades, will over time, beat the markets, and will be investing winners.
