Tuesday, April 8, 2014
Summarizing the GAME! - Yes it is a GAME
Distill learning into useful concepts and guidelines. Observe and understand daily market action in a competitive environment. The ultimate and degree of success depends on the effort of the individual. We are dealing with “probable” outcome with facts to make decisions. The business of “prediction” is a matter of putting oneself into the path of “optimum probabilities”.
The art of learning to time the market requires the trader’s mental attitude to be flexible and independent. Appraise the market on a continuous daily basis. Too often individuals and advisory stop listening to the market and begin telling the market what to do with disastrous results!
Flexible and independent seems easy but difficult to attain and apply to avoid being swept by the mainstream opinions. Independent thinking requires objectivity and logical. Anything that is subjective and illogical should be totally avoided. Emotional barrier will continue to inhibit one’s ability to think independently.
Determine market LONG, INTERMEDIATE and SHORT term trend. Analyze WEEKLY and DAILY chart including 4-hours Intra-day (if available). Are all the 3 different time frames in unison (tandem)? Are they conflicting? Smaller time frame is the building blocks for bigger time frames.
What are the indicators reviews for LONG, INTERMEDIATE and SHORT term trend.
How reliable are the indicators in the past? How reliable are these indicators in varying market conditions (UP-DOWN-SIDEWAY-BEGINNING-MIDWAY-ENDING)?
When does the indicators “lag”, “ahead” or “on-time” with the varying price trends?
Do you feel you should be invested at all times?
Check the upside potentials and downside risks. What are your requirements?
Which product suits your requirements? Stocks, Options, Index, Commodities?
Determine your entry points and exit levels! To act prematurely requires careful planning and management.
Are you too close to the market? Are you too far from the market?
Do you let your emotions run influenced by what you see on the prices?
Many prophets and gurus have predicted the market in the past, present and will be predicting in the future! Our tendency is to look at the present assuming it will last forever! The best analyst in the world is within you if you are able to think objectively and independently without influenced by emotion or news.