You Don’t Have To Be Nostradamus…
The following is a post by Stephen Burns, who is a trend follower that specializes in the Darvas System and can be found on Twitter here.
…to make money in the markets.
While trading the financial markets, you have to always ask yourself the right questions.
The right question is not ‘What will the market do?’, but ‘What is the market actually doing?’ and ‘what will I do?’
Don’t bother predicting what the market will do and think you’ll be thumping your chest with pride when you’re right. You have better chances of winning the lottery than outsmarting the net total of all participants in the market.
Money is made when you follow the flow of the market until it changes, and your job is to find ways to measure the current trend and use market action as a guide to your own actions, as well as carefully managing your risk so that you survive when you’re wrong yet still have a profit when you’re right.
History is one of the greatest teachers, and does repeat itself as people do not often change, remaining greedy, hopeful, and fearful, and the patterns on charts continue to reflect these emotions. The law of economics never changes; supply and demand drive prices.
Companies that change the world and grow exponentially are prone to have increasing stock prices to match their increase in earnings. Markets tend to move in large trends over time, sometimes making higher highs and higher lows and other times making lower highs and lower lows.
Seeing these trends and acting on them accordingly is how you make money. Be a follower, not a prophet. Because it just doesn’t pay to attempt to be smarter than the market in the long run
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Post Written By: Zen Trader
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