Wednesday, March 15, 2006

TO ALL BUY AND HOLD INVESTORS: BEWARE OF LOSING YOUR SHIRT!

Anyone who has money invested in the stock market today knows that the current times are proving to be very very volatile. And I agree with you, there are times when the market moves in complete random ways that makes you scratch your head and ask, "WHY?"

I watch the markets on a daily basis, maybe checking to see how my investments are doing about twice while the markets are open - Three times if I need to trade. Last week, the markets were poised for a bearish trend - and this was confirmed, it went down, with the Nasdaq being the greatest declining index (I beleive it went down 1.4% for the week - but I'm going off the top of my head).

But this week, the trends reversed, and the bulls are in control at the moment - but for a lot of investors who placed shorts, we got caught this week.

DO YOU KNOW WHY? Becuase the markets are volatile.

Now, this isn't a bad thing, because it means more opportunties exist, greater profits to be made in a shorter time span. But conversely, if your wrong on a trade, you lose money faster, or profits are easier to evaporate right in front of your eyes. And this hurts more for the investor who buys and holds, because if you don't adapt to the markets, you will get eaten alive.

The markets are not calm, storms are rolling in, and new storms brew everyday, EVERY MINUTE that the markets are open.

What you need to do is read more, get involved, learn how to adapt, and ride the trends to successful trading.

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