imported post
Since we have the bull market going, I thought I would share some information to others that I try to follow. Sometimes I have to kick myself for not following this information.
The secret of successful trading is to take a step back from the market. Trade with the big picture in mind at all times and don't follow the day to day market movement.
Daily market talk can hypnotize you if you follow it too closely. You have to see the wood and not the individual trees.
Focus on the big picture. Follow the bull market and not individual stocks. The market has more influence on stock prices than any other factor. Even the best stocks decline in a bear market.
So what is the secret formula?
The key is to buy when the market signals the start of a bull trend. Select leading stocks that are outperforming the market. Sell when the bull trend has ended.
There are exceptions to this rule: Sell individual stocks if they move against the trend.
There are two primary movements in the market, generally termed bull or bear, these are long sustained advances or declines. There are secondary movements in the market that run counter to the primary movements and are reactionary. In the bear market they are called rallies. In the bull market they are called corrections or sometimes referred to as firming up.
The important thing is not to lose sight of the big picture, and to have a good allocation of funds. When to exit and when to enter the market is not easy even witha understanding of The Dow Theory (See recommended readings on this site, or on the internet via search engines).
Buying and holding and ormarket timing can work to ones advantage, provided one knows what they are doing. As I've been told "knows" is a auful big word.
Attached is a chart of the S&P 500 as of 12-01 for 3 months. The chart is in candlesticks for reference to how the market advanced during the current bull period. And, I have included a 5D MA to soften the ups and downs, and a 50D MA for general trend.
Will be staying in 100%stocks for the near future at 25C, 45S, and 30I.
Rgds., and be careful!
Spaf