Hello Bill
I think we generally agree on when and where "indicators" may be more effective, but at the end of the day, doesn't their employment essentially come down to "timeing the market?" Isn't that what just about every market expert in the world advises against trying to do, because like your baseball analogy, you're only likely to be right .150 to .250% of the time. and its the strike outs that kill you,... and there are far more of them.
Getting in at the ground floor on real discovery plays is the rarest of all opportunities. Locking in small profits (or trying to time the market) may and probably will work a few times. So you lock in $2,700 or $6,000 great! But there will come a time when you have taken your profit at $.80 or $1.24 but the stock doesn't reverse! It defies your system! And guess what you will do?
Everyone likes to believe they'll have the discipline to wait for a retraction, or just walk away happy with their profit, but we've all seen those moves that just keep on going and never dip back close to the price you sold at.
So you wait and you wait and the price rises and rises and then it happens... that weak moment and you go, "Jeez! I'm missing this train and its not coming back for me!" I want that gold Toyota Land Cruiser and I won't get it this way!" And you do it... you buy in $2 or $3 or $4 higher than you got out at. You put all your capital and all your profit back in (and then some) and end up with fewer shares than you had in the first place.
If you are one in a 1,000 who is so incredibly disciplined and happy with your $2,700 good for you, but you are a very rare breed.
Because you will be sitting there counting your $2,700 but lets not kid one another, you will, as sure it rains on summer holidays, be thinking, "If I just hadn't sold, I'd be sitting on $12,000 or $22,000 now... Damn it!" "If I buy now, I can still get in on some of this run."
Good luck Bill
Regards
Vaughn |
