Wednesday, 14 January 2009

Commentary: Your source for news, commentary, and stock info

3 Things for 2009: 2009 is just beginning, and today's early decline is what investors and traders should expect more of this year (i.e. Declining Markets). Now, declining markets get a bad wrap, and the main reason they do is because most people don't understand or even take the time to learn how to profit from falling markets.They are like tennis players with a strong forehand (long only) and no backhand to speak of (going short). Every tennis expert knows to dominate on the court takes skills in both areas. But when it comes to trading and investing, most people put their focus only in buying. And with a bear market like we have today, having only a long only bias will get you killed.One of the reasons many people have that bias in the first place is because they watch all these financial shows and listen to so-called gurus thinking that they will somehow unlock the key to riches by watching or listening to these people. Only hard work, study and discipline will actually unlock the key to riches in the stock market.My advice today is to 1) LEARN HOW TO READ CHARTS. They will tell you what is happening well before the media tells you. I spend about 10 hours a day looking and studying charts, and once you start to do the same thing you will start to recognize patterns and these patterns will recur over and over again. From being able to spot these patterns you will be able to develop a strategy that may help you win in the markets. 2) LEARN HOW TO SHORT - So that you can take advantage of falling markets while everyone else is panicking and crying about how much money they lost last year. And even more watching their 401ks or pension accounts go down the drain. Take control of your own financial well-being and be responsible for yourself. 3) STOP WATCHING FINANCIAL TV AND GURUS - Take the time to learn how the stock market works. There are plenty of good books. Read the recommended books on the left to get started. Financial TV and gurus have no accountability and they won't be there to tell you when to sell; most likely, after telling you how great a buy something was.

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