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.
May 26, 2016 @ 8:02 am Linda Klempke
After having listened to Trader Scott for around 6 years, I can say I do not know anyone who has come near his ability to predict market behavior. I always say I do not expect anyone to be 100% correct, but he is very close to that and he does it for a free. Thank you Trader Scott and thank you Patrick for putting his comments separate to be studied. Linda K
May 26, 2016 @ 4:17 pm Scott
Thank you for the kind words Linda. I am going to continue to stress that success in markets is about PROBABILITIES and RISK and they are completely intertwined. So you’re right that no one has ever, nor will ever be 100% correct re: markets. I’ve been fortunate to have been friendly/friends with some of the greatest traders around and even they occasionally lose money.
June 6, 2016 @ 3:21 pm Chris
Glad to see this blog. I will be checking back often for your next report. Thanks Scott & Patrick!
June 7, 2016 @ 6:16 am Janet
I love your blog. Would you consider re-sharing the recent stock tips you gave Patrick? I only caught one of them. Also, I know you can not give advice, but if you see a wave to catch can you share your information?
June 7, 2016 @ 3:41 pm Scott
I’m going to start sending in much more frequent updates, and FWIW, I always say what i’m doing with my own money, so let me know if that helps. As far as tips go, it really was Patrick’s ideas, I just filled in a few blanks. We talked about GDX and GDXJ mining ETFs.
But I only buy into extreme selloffs like when I first recommended them several months ago, so I would not buy them currently.
I also told Patrick that I’m super bullish on agriculture and I owned the RJA ETF, which I also recommended a while ago.
And lastly we talked about shorting the Dow and that’s a tricky one. I will do a post about how you should only do an active shorting strategy, never a passive shorting strategy. And only short into price strength and be quick to take at least partial profits, but we talked about buying an inverse ETF, like DOG, to short the stock market itself. And never use a leveraged ETF. But I will be explaining all of this in more detail.
And also, I’m not sure if we’re talking about the same thing, but yes that is how markets move – in WAVES. Janet, that’s quite an advanced insight, understanding wave structures. That’s a big part of my method.