The world of market speculating is made up of everyone from the active day trader to the longer-term investor, speculating in all kinds of markets and asset classes, people all around the globe pushing buy and sell buttons each day in hopes of achieving income and wealth. Never in history have there been so many books available along with information on the internet on how to speculate in markets for traders and investors. Each weekend, in many cities around the world, there are educational seminars given on how to get rich from trading. With so much education on how to properly speculate in markets out there, why is it that most short-term traders lose money and most long-term investors never achieve their long term financial goals, especially with the markets at all-time highs? How can this be?
It’s because most books, internet information and seminars teach you to think in conventional terms, which means you’re doomed from the start and don’t even know it. Most books and seminars are loaded with conventional Technical and Fundamental analysis which tends to teach you how to buy when everyone else buys and sell when everyone else sells (herd mentality) which is high risk, low reward and low probability.
Conventional Technical analysis is based on pattern recognition that has people buying after price has rallied and also offers buy and sell signals based on indicators and oscillators that always lag price, which means high risk/low reward buying and selling. Conventional Fundamental analysis offers buy signals only after good news is present and company numbers are strong. Where do you think the price of a stock is by the time this good news is offered to you? If you guessed high, you’re correct, almost always. Remember, the only way to be consistently profitable when buying and selling in markets is to have a strategy that has people buying after you buy, at higher prices than you paid, and selling after you sell, at lower prices than you sold at. Conventional Technical and Fundamental analysis does not help us in this regard, the basic principles of these two ways of thinking ensure you will buy and sell with the herd, when it’s too late, which means high risk and NO EDGE.
If proper market speculating was as easy as reading a book, wouldn’t everyone be a millionaire? Do you think Wall Street speculates in markets using these two forms of conventional analysis for their own funds? Of course not, and that’s why their returns are so much better than the average investors.
Wall Street, or any successful investor, knows that how you profit in the financial markets is exactly the same as how you profit in any market, buy low and sell high. Another way to say this, buy at demand and sell at supply… Think of it like this…
The more you can bring the mindset and rules that you use each day to purchase everyday items at the grocery store, appliance store and so on into your market speculating, the better you will do. Do you ever use coupons to save some money? If you do, you already know how to buy at a low price. Take that same exact mindset and action into your trading world. The mass illusion is that proper trading and investing is somehow different than how we properly buy and sell things in everyday life. Truth is, there is no difference.
Many so-called professionals like to complicate the process with smoke, mirrors, curtains and sleight of hand. They do this to trick you so that you will transfer some of your account into theirs, without you realizing it. The key for you is to keep everything real. Use your simple logic filter to ensure you will not lose some or all of your account to illusions created by conventional technical and fundamental analysis.
There is nothing wrong with following the rules of a trading book, just make sure you are the author and that your strategy has you buying at wholesale prices and selling at retail prices. To do this, start with using all the powerful buying and selling knowledge you already possess and use on a daily basis outside of the trading world. Bring this key but simple strategy into trading and you will soon be spotting blue light specials all over the place. Never forget, how you make money buying and selling anything in life is EXACTLY how you make money buying and selling in the financial markets. And if you do write the book with your proper rules, don’t sell it.