Stock Market Wisdom-learning To Trade Like The Legends, Part 7
- Date: 2010-09-13 - Word Count: 407
Share This!
Top traders and investors know the most money will be made by following the main trend. Jumping in and out of the market trying to scalp it, is generally not a good idea. The big money is made playing the long swing. The key is to stay with your winning trade, until you get a definite indication the trend has changed. This is called, letting your profits run. I use a weekly chart to determine the main or major trend. It is never a good idea to trade against a major trend. Stay in sync with the market, and always trade in the direction of the major trend.
Diversification is a crutch for ignorance. You are much better off only trading when the odds are strongly in your favor. Gerald Loeb stated, "The greatest safety lies in putting all your eggs in one basket, and watching that basket". I totally agree. If you want mediocre results, at best, diversify. If you want superior trading results, you must only trade the very best opportunities. Top traders know you are much better off with one great stock, instead of ten average stocks, spread across ten different sectors. It is amazing, listening to some of the so-called experts who preach diversification. They simply do not have a clue on how to attain superior trading results.
Conventional wisdom tends to be a disaster for a trading account. This includes the stock market, and the futures market. The majority of traders blindly follow this way of thinking, and doing things. They are usually not very happy with their trading results. Examples of conventional wisdom include, buying cheap stocks, thinking it is a great deal. Most cheap stocks are cheap for a good reason, and usually just keep getting cheaper and cheaper. A great example is listening to so-called experts like Jim Cramer. The Cramers of the world will lead you on a path, to not only monetary failure, but will strip you of your psychological capital also.
The world's best traders and investors know that conventional wisdom is mostly hogwash. It is put out there to fool most of the people, most of the time. It works only too well. Elite traders do not follow the crowd. They implement historically proven methods and principles, which are considered unconventional by the vast majority. Elite traders think and act differently. That is why their trading results are superior, and they make vast fortunes trading the various markets.
Diversification is a crutch for ignorance. You are much better off only trading when the odds are strongly in your favor. Gerald Loeb stated, "The greatest safety lies in putting all your eggs in one basket, and watching that basket". I totally agree. If you want mediocre results, at best, diversify. If you want superior trading results, you must only trade the very best opportunities. Top traders know you are much better off with one great stock, instead of ten average stocks, spread across ten different sectors. It is amazing, listening to some of the so-called experts who preach diversification. They simply do not have a clue on how to attain superior trading results.
Conventional wisdom tends to be a disaster for a trading account. This includes the stock market, and the futures market. The majority of traders blindly follow this way of thinking, and doing things. They are usually not very happy with their trading results. Examples of conventional wisdom include, buying cheap stocks, thinking it is a great deal. Most cheap stocks are cheap for a good reason, and usually just keep getting cheaper and cheaper. A great example is listening to so-called experts like Jim Cramer. The Cramers of the world will lead you on a path, to not only monetary failure, but will strip you of your psychological capital also.
The world's best traders and investors know that conventional wisdom is mostly hogwash. It is put out there to fool most of the people, most of the time. It works only too well. Elite traders do not follow the crowd. They implement historically proven methods and principles, which are considered unconventional by the vast majority. Elite traders think and act differently. That is why their trading results are superior, and they make vast fortunes trading the various markets.
Related Tags: trading, stock market, trend, investors, traders
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Free Online Stock Market Software
It can be quite tough to find good stock market software there are just so many options out there to - Few Essential Commodities That Are Traded
Segregating commodities into different types makes it easier for traders and investors to compare pr - Ecn Trading
First of all, Market Maker Broker.Market maker broker is a company authorized to create and maintain - Stock Chart Analysis And Understanding Trend Lines
Nearly all practiced equity market participants understand trends in the stock market offer the very - Three Tips For Picking Out The Best Value Investing Software
Value investing software can turn a first time clueless trader into a success in the stock market wi - Market News Giving Shape To Investment Goals
Do you think market news can help you take the right trading decisions? It is an obvious 'Yes'. If y - Stock Market Investing Without Emotion
Investing in the stock market is so tricky, and an emotionally driven decision to most people, that - How To Spot And Select The Best Automated Trading Stocks Program
Easily the greatest deterrents which keep potential traders out of the stock market is the risk asso - Why Are Millions Of Traders Using Online Stock Trading Programs?
Online stock trading programs are those which deliver profitable and winning stock picks right to yo - Stock Market Investors Need Principles
Long term success does not come easy for stock market investors. You need to acquire specialized kno
Most viewed articles in this category:
- Trading Secrets of a Successful Share Trader
The first and most important thing a trader must have is a "TRADING PLAN"This is a "Written PLAN" wh - Beat the Market
Beat the Market! Can it really be done? Consistently?As unlikely as it may seem, hedge fund manager - How To Find Potential Profitable Stocks
There first thing is knowing where to look. It is quite amazing sometimes where a tip or information - Commodities Trading Online
With the advancement of the internet, commodities trading online is now made possible. Commodities t - Beating the Dow with Bonds!
Beating the Dow with Bonds, is 1/3 of an extremely successful asset allocation strategy outlined i - Kennametal be such a great Buy?
From many of my previous articles I have focused more on companies I would consider buys in the shor - Minority Shareholder Squeeze Out
For those that have been a victim of a minority shareholder squeeze out, the experience can be a nig - Beta - Analyzing The Risk Profile Of Stocks
Who would not like to have an exact risk positioning outlined in front before taking any decision? W - 4 Main Risks Involved in Futures Trading
There's no doubt that futures trading is inherently a risky business. Anyone who tells you it is 100 - Penny Stock Picks: The Promises And Pitfalls
When trading any security you really need to do your homework. If you do not, and the price per shar