Trade What You See, Not What You Think Message Board

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Strategies & Market Trends : Trade What You See, Not What You Think

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To: Threei who started this subject	10/17/2000 4:48:18 PM
From: chris-	of 867

Stages of the Speculator Part 2.. Simple observations. This is the greatest threat to an early speculator. Threei in previous classes has pulled back enough curtains for you to realize that the world wants to lead you into a direction taken at face value.Until you pull back that curtain, you will never see the true reality of the path that they lead you down. For example, let's assume a trader on the message board is screaming about a company's new product. This is not happening because he is so excited that the product will be great for mankind.He is doing so because he wants to attract interest so he can sell his shares at a better price.The message board poster wants to lead you down the path of excitement that you should buy into the stock for his benefit, not yours.Taking this to the broader sense, the market wants to show you one thing and hammer you with the opposite. The early stages of the speculator fall prey to these instances.Worst example for me...October 1998.I owned DELL at 59 7/8. I sold at 42. Where was the bottom? 41 7/8. Great sell Chris! They are not properly trading a system provided because there is no sense of reality and no sense of personality from within.Their trading is more akin to gambling. Henry Emery suggests that in gambling, one must win and one must lose.In speculation however, this is not so. A gambler "creates" risks in the market place with wrong assumptions and following opinions. A speculator "assumes" risks and responds accordingly. Unless we progress out of the early stage of accepting items at face value, the early speculator will cease to exist. Bernard Baruch has a great quote about speculation. He said "it is a dangerously addictive habit which involves an appeal for fortune, are often accompanied by delusional behavior and are dependent for success on the control of emotions. As an early speculator begins to pull back the curtains of obviousness and takes a deeper look at the market, he begins to see the world of market psychology. The same psychology that made me sell 1/8 point off the real bottom. He realizes that traders are not experts in every field and even if they were, this has no bearing on the stock price itself. He (speculator) realizes that a stock moves when supply outstrips demand and vice versa. This happens if enough traders believe the reports and findings, not because the product exists.Therefore, he reads the psychology behind the move and not necessarily the reason for the move. To this individual, the stock market is no longer a carnival of fools, with playful intentions and obvious deceptions. At least he is no longer apart of this crowed even if they still do exist.The experienced traders simply do their job while the early stage speculators fall for tricks. cont...

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