The most important attributes of an experienced trader/investor are patience, prudence, and losing the attitude that you have to be right. The goal is not to be right; it’s about going with the flow and making money.
Savvy investors are trained to avoid emotional trading. In contrast most investors find it emotionally easy to buy something which has been going up for a long time. It’s emotionally almost impossible for most investors to buy something which has been in an extended decline and when the media is telling them every day why the economy could get much worse with the possibility of deflation and depression.
Right now people in the street feel worried about the stock market. They were feeling very comfortable about their investments and retirement accounts just a couple of months ago. That was the time to be in the Treasuries, ignoring all the media noise.
We sold our Treasury bond positions a couple of days ago because the fear was gone and the tides had changed. When they become out of favour again we will buy them back. The time to do this will be when the amateurs are cashing out of them.
For now big corporate insiders are back in the market doing some heavy buying during the recent week. Consolidation may well occur in the next few days or weeks and we will buy into it but not when everybody else is climbing over each other to buy or sell.
ETF Trade Advisor won’t catch the very bottom or the top of any asset. That is a fool’s game. But we will catch the meat of the run. If the market goes against us then our stops are in place to minimize the loss. Keep focused and remain disciplined and objective. There is absolutely no room for emotional trading.