Trade Smart, Not Often

by Donald Harder

Take a look at any stock chart. Nothing ever moves straight up or down, but rather in waves.

In order to profit from the waves a trader must understand that virtually all stocks are subject to two important factors, time and the movement, or lack thereof, of the broader overall market.

Market Correlation

Just like no man is an island, neither are individual stocks. It doesn’t matter how good the trade set up, if the general market moves against the direction of any trade you are taking, that trade is probably going to fail.

General Rules to Follow

Always trade in the direction of the market trend
If the market is ranging be in cash or focus on buying dips or selling the bounces

Time Factor

Markets move in spurts, then they rest. They also generally rest much longer than they run.

Money is made during the short bursts of activity and money is lost during the lulls.

General Rules to Know

Traders who make the most money and avoid the most losses are sometimes in cash 70% of the time.

Traders who make the most money recognize when the market is running and ONLY put their money to work during those times.

Solution

Check the Market Weather

Be on the right side of the trend and know exactly when to put your money to work using Securities Research Services Trend and Timing Tools available in the member’s area of the site.