I've had the opportunity to watch and study the various actions of many traders over the years, both beginning and expert, and a common flaw I see among many traders -- even the most experienced ones -- is they have a distorted view of what causes the market to go up and down and why it goes up and down from any given point. The common view is the price of any stock or market is caused by the buying and selling of shares or contracts by the various traders involved. This is true of course, but thinking along these lines blinds you from realizing one important point. That being, <b>the price or position of any stock or market is nothing more than a data point within a data set!</b> On a different thread, some guy responded to something I posted, something to the effect of, "You're buying when the rest of the world is selling so your method is heavily flawed." If you carry this kind of logic into the market you are destined to fail. When everyone in the world is selling that selling pressure will push the market to an extreme level -- a level that it most certainly will recover from, depending on the time of the day. Naturally, no method comes with a 100% probability but if you study the market from a statistical perspective instead of an, "Everyone is selling" perspective it will open up a window into the market that you never knew existed. The highest amount of buying and selling typically - emphasis on typically - occurs at the tops and bottoms of the market, which, often times, are statistically extreme levels. And what is the prudent thing to do at a statistically extreme level? Either get out or fade it. The markets are non-stationary and future movement can render an extreme movmement non-extreme so this view of the market obviously does not come without it's weaknesses, but what method does? Buying or selling just because everyone else in the world is doing that has some serious problems. The market can recover from a beating simply from the absense of selling, <i>because it has already occurred.</i> Extreme data points, mean-reversion, and top shelf money management are as close to the Holy Grail as you will find.