The commentary by many about the fate of the stock market has changed. It’s changed from doom to possible boom, with people now thinking positive about the US trade deal with China and other reasons are given as to why the markets will rally the rest of 2019 and beyond. These comments and changing of minds is farcical, particularly considering these commentators are often people that investors and traders look to for solid advice and help with decision making.
Trading and investing is easy technically. I teach mostly trend trading and it works like this.
Buy a stock that is going up.
Buy an amount of stock that is in line with your risk profile.
Sell the stock when it hits your pre-determined exit.
If you think that’s simple and easy well it is. However what happens next is WE get in the way of that simple process. Our minds take over with worry. Worry that normally involves these two thought patterns.
Fear of loss.
Fear of missing out.
What happens then is we look for KNOWING. We want to know what will happen. Humans don’t like not knowing so we often look to those that do know, or claim they know, or attempt to make you believe that they know, often in an attempt to sell you something.
In my trading book Mindful Trading using Winning Probability I talk about the two biggest problems traders have.
They don’t have a plan. (No method)
If they do have a plan they don’t stick to it. (No mind control)
My experience of trading for 25 years and teaching for 10 is that the second problem is the hardest for most. It will be the main topic of my second book (along with more easy systems) and it will be a topic I discuss at my upcoming seminar in Sydney May 19th. You can access details about that seminar on the link below.
The US market along with the Aussie market has now made a V shaped recovery from the lows of late 2018. Market analysts and commentators are now “expecting” a sell off, pull back, consolidation etc. as they grasp at some sort of knowing and prediction. Another possibility is that the market just keeps rising and does not pause.
What I know is now I will get asked the question “is now a good time to buy?” My answer was stated above and is: Buy an amount of stock that is in line with your plan and risk profile.
Trading can be easy but we make it hard.
“try to help others, if you are not able to be of help, then at least do them no harm”