Do you make your best trades when they are the hardest to take? When you fade the extremes of emotion and provide a service to the market, buying what is clearly being puked out by the herd of amateurs caught in the undertow of their own fears? I've read that fading extremes of emotion is the only real way to acquiring huge wealth before it is in demand, and it seems to be true when keeping wealth at market tops: "fade hysteria" as Jim Rogers said, and "buy value on the cheap". In his book Hot Commodities he talks about going the other way when the crowd is gathered on one side of the market. What do you think? Are we all just lemmings carried off in waves of our own fears?
Ok, how about Bob Moriarty, who has been very good at calling the local tops / bottoms in gold & silver for the past year. http://www.321gold.com/editorials/moriarty/moriarty032612.html What? No one position trades around here?
Never try to catch a falling knife. There must be some evidence of a reversal there. Would you buy a red marubozu candle?? What is the point of that?
I started out much longer term, first in stocks than commodities. I am what everyone says don't ever do, Sell highs/ Buy lows, been successful at it like 18 years. But took long time to get it down without losing my mind. It took me 23 tries when Crude oil went to 147, but cause I use options to hedge, I only lost on three overall trades. I mainly use monthly and weekly bar charts. And in some markets, I might have to wait years before I get signals. But little over 80 percent of what I have accumulated has been thru this approach. I never thought of it as in fears, but a valued possibility as that is what drives markets. I like Rogers books and opinions and have made money on what he is doing so long as it is early. This approach has done well for me in other investments as well, sold all my real estate properties in 2007. Bought some stocks at extremely low prices like Kmart before Sears bot them for under a buck, Siri at 20 cents, I just like to buy companies that offer products that are used but in some way have gone out of favor.
The point is that The Market will pay you for helping it move in the direction that will keep it alive. It needs transactions to exist. Fear causes transactions and by going against your own fears you end up on the other side of most participants' trades....... for the win.
I make the best trades when I'm bored out of my mind. Buy the dip is super boring, but it gave me 70 ES points in march. What gives? I can't almost even look at intraday charts anymore. Doesn't anybody else have the feeling it's like watching paint dry?
All day long baby, all day long. But it's better than have a job where you say "Duh, you want fries with that"?