Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: isopatch who wrote (287)	8/21/2001 4:31:33 PM
From: MetalTrader	Read Replies (1) of 36161

Iso, I wouldn't normally comment on your post but I think it one very valuable for those who are not short term traders and those who shouldn't be. The TREND IS KING. So many in the past few years have been "trained" completely wrongly by the investment industry. Too many e-trade ads I guess. Whether playing the ponies, black jack or the market one is often looking for the simple system. The curious irony of the market is that the "simple" approach that works in one market works completely differently in another. The availability of information has created a generation of "a little knowledge is a dangerous thing" punters. Three years ago they didn't know a stochastic from a marital aid. Now it is a mantra..."oversold" "overbought". In the lengthy bull market buying the oscillators worked. No one told them in a market trending down that is a recipe for disaster. 1. Find the trend (if there is one) Don't fight it, you will lose. It's not a fair fight. If you don't find a trend take a walk, there's one out there. 2. Once that trend is found THEN consider oscillators such as stochastics and MACD. If it's a downtrend SELL the overbought short term indicators. If it's an uptrend BUY the dips. DO NOT MIX THESE TWO UP. 3. Maintain your core (long or short) in agreement with the trend. Keep mental stops for those places so you can be wrong and survive. you might want to play trader, but you'll be telling the water cooler lurkers how smart you were, but damnit...sold too early. 4. When the trend breaks, take a portion off the table. Either this means profits in your pocket or you were late getting to the trough. Being the last to belly up isn't great, but it doesn't mean you have to be the last to leave the table either. Finding a bottom in tech or oil, or a top in housing or gold is an exercise in egotism. I think most of us here have enough to spare so the occasional small bad trade won't kill ya. But how many 75% haircuts can ya take? TREND, TREND, TREND...you might be the only guy in the world who understands the fundamentals...so what. A lot of people who aren't as smart as you would love to take your money. Wouldn't we? mt

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