Possession of a rigid and flexible mentality is an essential element of a good trader/investor. When a bull trend sets in, you buy, when a bear trend sets in, you sell. Each bull and bear phase shall take place more or less and sooner or later. This phenomenon happened in the past and it will happen again in the future, no exception. We just do not know when which trend takes place.
To win the game, your assignment is to figure out when exactly a bull trend starts and ends, and when a bear trend starts and ends. This is a very simple concept and easy to understand since all you have to do is to know when is UP and when is DOWN, not a diagonal movement at all. Even a five years old child who never traded before could figure out the system by looking at price movements, however, this concept tends to be forgotten if emotion involves and when you are influenced by many different opinions coming from newspapers, TV, social media, friends, colleagues, and even guru investors. You would be especially influenced badly if you possess a losing position. In the info era, you can get any info instantly and be able to come up with a decision quickly. However, I want you to hold steady and try not to be an impulse shopper until you know what you really know.
I want you to have a rigid attitude towards the market that you won't be influenced easily by anyone or anything because people who think they know better and make profits may persuade you to follow them. It is surely exciting to see someone making money and hoping to do the same. WATCH OUT! Anyone can make money in the market, anyone and everyone literally! However, not anyone can maintain making profits.
The recent market drop starting from the interest hikes affected investors and traders tell you which direction it is going now. However, there was optimism among people and market euphoria in 2021. Anyone could have made fortune with TSLA, GME, Crypt, or small-cap growth stocks if they simply follow their bull trend (momentum buy), although this phase didn't last for a long time. It collapsed just like the 2008 financial great recession and it is happening again or it already happened with crypt. A great example of being a sheep can be explained by the 2008 great recession. Many hedge fund managers and money management corps (JPMorgan Chase, Goldman Sachs, Morgan Stanly, and Merrill Lynch) followed each other, took advantage of the incredible money-making opportunities, and betted heavily on real estate in 2008 without studying the foundation of subprime loans. The consequence in terms of financial management was bad for the public and they were sitting on the edge of bankruptcy in 2009. Needless to say, Bear Stearns, HBOS, and Lehman Brothers became their own victim.
What excites me the most is the attitude of Warren Buffet. He likes to follow his theory. He only sticks with value investments. His investment style is rigid and refuses to do any other things or follow any other investor(s) even though there is a margin of safety available and easy money to be made with enthusiasm in the market. Thus, he sometimes misses incredible opportunities, AMZN or early APPLE or technology stocks, however, he was able to protect his fund by avoiding unknowns in the great recession. He became the hero for some of the big financial institutions. He refuses to do what he does not know, that is the golden rule and shall not be broken. His investment strategies are quite different from mine, however, one thing in common is we do what we know. You do not need to know or do 100 things to make profits, you could make money by repeating one absolute thing that is proven to work. You need to test and prove your hypothesis and hold on to what is good.
My only edge is TIME PRINCIPLES, which allow me to predict accurate market movements. You can lose money or miss an opportunity by getting into the market too soon or getting out too late. That is why it is important to wait until a definite change in trend is indicated. I believe that a trend is meticulously controlled by time and the bear will continue until 2024.
1 Thessalonians 5:21
Prove All things And Hold Fast To That Which Is Good