Who else wants to ride stock market trends to create a fortune?
Submitted by Van Beek on November 3, 2009 - 16:12
Remember this guy in Singapore a few years ago who bankrupted this big bank he was working for? He was betting on a certain trend and when he was wrong he was betting more, and more, and more on this same trend, to try to recover. The trend did not turn. In the end he lost it all. Stock market trends can make or break any investor.
I love stock market trends. I think they are great. They enable me to make good money on the stock market without having to spend a lot of time on researching specific stocks. Because of my beloved stock market trends, I do not need to hire and pay any expensive advisors. I just ride the trends.
Look at any ordinary day to any of the stock market indices like the Dow, NASDAQ, FTSE or Nikkei. Most of the stocks in those indices move that day in the same direction. The same is valid for longer periods.
How to see the trend
When you look at a period of a few months, most of the stocks move in the same direction and create the overall market trend. This is not just valid in one country. We live now in a global economy and in general most stock markets around the world trend in the same direction at the same time.
How wonderful would it be to know in which direction the stock market trends go and ride them to riches? Actually, to see the direction of the trend is easy. Simply, do not look to close. If you just follow the news everyday, you probably do not see the trend. There is too much movement and noise.
Take a step back and look at a chart that shows how a stock market index has developed over a number of years. The trends that last 3 to 6 months or longer are easy to spot. These are the stock market trends that I like to ride.
Key question
The key question for every trend rider is: when do they start and when do they turn? To benefit maximal from a trend, you want to ride it as early from the beginning as possible. And you want to ride it as long as possible till the trend really turns. In hind-sight, looking at a chart, pin-pointing the ideal moments to step in and out is easy. However, to identify those moments in the moment is something different.
I use the proven Stock Trend Investing system to define the moments when to step in on stock market trends and when to step out. Do you have a system, strategy or tool that helps you to define these critical moments? Please register or log-in and share your approach or questions on this.
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