“Don’t Confuse Brains With a Bull Market”

 

 

 

Trader Scott’s Market Blog

September 19, 2016

 

 

An addendum to a previous quote of the day (sign up for Trader Scott’s e-mail list updates below) by Humphrey Neill: “Don’t confuse brains with a bull market.”
Call me Mr. Obvious, but I would add this mouthful: In an UPTREND/bull market, we want to (ideally) enter our initial position as close to the bottom price/time as possible. And we want to (ideally) exit our position as close to the top price/time as possible. So is this even possible? At first it’s a tough endeavor. But if we’re stubborn and tough and we keep learning, we can get pretty good at it. A select few even get great at it. But if we can be consistently pretty good at it, then there’s a pile of money over there waiting for us. And, even more importantly, we’ll have a good chance of keeping most of those profits.
A couple of things to hopefully pique your interest in getting better at this:
#1: We need to learn the power of ACCUMULATION (and DISTRIBUTION) and then learn to respect that power. It’s what people are referring to when they say a market is “building a base”. It’s the bottoming process necessary for all powerful up-moves. It’s what gives us the staying power to withstand the inevitable selling waves in all bull markets.
#2: We need to learn what ENDING ACTION is in markets. They are the warning flags that a TREND may be coming to an end. I said may because just to throw us off, ENDING ACTIONS can be just a warning that the TREND needs a pause to refresh – called REACCUMULATION and REDISTRIBUTION. And over time, with hard work, we can get better at understanding the differences that exist between ENDING ACTIONS that warn of a major top from those that warn of a shorter term top. ENDING ACTIONS are things such as SELLING or BUYING CLIMAXES.
#3: We need to understand the herd mentality, as so brilliantly laid out by Charles MacKay in his book “Extraordinary Popular Delusions and the Madness of Crowds”. We need to learn how to judge fear and then to use that to our advantage. We can then learn to step up and buy into the volatility, when the market is very scared and when folks are morose.
#4: We need to learn how to understand/recognize what are the SUPPORT and RESISTANCE areas. And then learn to respect their power and to use them to enter (and exit) our positions.
And lastly (for this discussion now), we need to do as little: thinking/figuring out/guessing/predicting as possible.
But we need to do a tremendous amount of: reading (the “right” things)/learning (the “right” things)/planning/preparing/staying mentally tough/anticipating (acting, but not reacting) as possible.
And the Tischendorf Letter has a great, fun passage from the extraordinary book about Jesse Livermore, “Reminiscences of a Stock Operator” by Edwin Lefevre discussing some of this.

Sign up for Trader Scott’s Market Alerts and Updates

About

img_0074bwcrsmTrader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.

 

 



'Trader Scott’s Market Blog – “Don’t Confuse Brains With a Bull Market” – September 19, 2016' has 1 comment

  1. September 19, 2016 @ 8:36 pm dmp

    very valuable

    Reply


Would you like to share your thoughts?

Your email address will not be published.

©Copyright One Radio Network 2019 • All rights reserved. | Site built by RedLotus Austin
The information on this website and talk shows is solely for informational and entertainment purposes. IT IS NOT INTENDED TO PROVIDE MEDICAL ADVICE. Neither the Editors, producers of One Radio Network, Patrick Timpone, their guests or web masters take responsibility for any possible consequences from any treatment, procedure, exercise, dietary modification, action or application of medication which results from reading or following the information contained on this website in written or audio form, live or podcasts. The publication of this information does not constitute the practice of medicine, and this information does not replace the advice of your physician or other health care provider. Before undertaking any course of treatment, the reader must seek the advice of their physician or other health care provider and take total responsibility for his or her actions at all times. Patrick Joseph of the family of Timpone, a man...All rights reserved, without recourse.