Trader Scott’s Trading Tips
Good morning Gents,
Today I’m going to share 90% of my method for succeeding in markets and how to use that to trade current markets. This is exactly what gives one the ability to UNEMOTIONALLY ANTICIPATE markets vs. what most people do, which is EMOTIONALLY REACT to markets.There are 3 parts to the method and then a brief explanation of each part.
#1 – This is by far the most important thing you could ever learn about markets. You will NEVER make money in markets if you don’t understand this following concept.
Determine and Respect the trend of the market. Keep repeating that to yourself. And there are 3 types of trends – up, down, or sideways. Sideways trends are either forming a top, forming a bottom, or are just pausing in the current trend. ALWAYS trade with the trend – in an uptrend, ie, bull market you should buy, and in a downtrend you should short or be out. So just understanding this one concept can neutralize almost every mistake that you could make.
#2 – Buy at support, which is simply previous lows below the market and sell at resistance which is previous highs above the market.
#3 – Have the humility to accept when you’re wrong and get out.
That’s the gist of it. So how does this relate to current markets, namely what am I doing.
In Sep. 2015, I believed that we were now entering a bear market in stocks. In a bear market you should short into the resistance zone. So, I’ve been shorting stocks into the highs, thereby ANTICIPATING a new decline in stocks and then covering part of that short position into the selloffs. And I remain very bearish on stocks. My only uncertainty is if I’m bearish enough.
As to gold – for 4 years, I warned the listeners to be very cautious – that the bottoming process would take a few years with the major bottom occurring around Sep. of 2015. That bottoming process would last about 6 months. But by the 2nd quarter of 2016, we’d be in a new bull market. So now what? In a bull market you buy at support. Several times over the last 6 months, I’ve recommended the mining stocks. I expect them to far outperform gold itself over the next many years. However, I would not buy them right now as they have had yuuuuge rallies recently, but of course most folks were too emotional to buy them at support in ANTICIPATION of the next rally. I also recommended silver and numismatics, both of which will have explosive moves, especially starting 1st quarter 2017.
But Andrew will obviously be the one to help folks with the numismatics.
And lastly those darn commodities will continue to surprise on the upside as the new major bull market is continuing to proceed. And I’ll repeat that I’m wildly bullish on agriculture.