The drama of the Fiscal Cliff and the recent sequestration circus, plus the trials and tribulations of these four countries (which have run up huge deficits) have been well documented and known for quite some time. What is more important, in my opinion, is not the size of the debt which is staggering, but rather what is happening in the market and the market's perception of current events.
Market perception trumps everything else out there. Market perception trumps market fundamentals every time. Market perception is the one card that the government cannot control. It is the card that can potentially give the individual trader an edge.
So what is market perception? Well, have you ever noticed that when some big world event happens, or a new "hot" IPO hits the markets (remember FaceBook, Zynga and Groupon?), traders expect that market to go in the talked about direction and typically it does. What doesn't get talked about is how the market then corrects itself and the technicals really come into play.
The only real way to avoid the trap is through the use of technical analysis, or in the case of , our Trade Triangle technology. This technology doesn't read the newspapers, doesn't watch cable, and is independent of everything else except the market itself.
What is the most important thing to most investors? I would have to say it is the bottom line. If you're not making money in the market, then you're doing something wrong. Maybe you're paying more attention to the talking heads on cable or to the nightly news, but you're not really paying attention to market perception.
I was lucky enough when I began my career to learn about technical analysis very early on. I said to myself, "when it can be this easy, there must be something more that I'm missing." It was then that I made the mistake of looking at all these other so-called tools like fundamentals, earnings reports, etc. You name it, I looked at it.
One day I finally got smart and realized that I had already found the "true gold" in trading by using technical analysis.
I was just watching some talking head author on TV and they were saying that technical analysis is so 1920's and old technology. Of course, the person who was saying that was looking to sell copies of their book.
Not looking at technical analysis, which is like the DNA of the market, is a huge mistake! I can see people going out and buying this author's book and being led down the wrong path.
Let's keep things simple. That is the secret to successful trading.
At MarketClub, we tend to look at the market in a very simple fashion. The market can only do three things: it can go up, it can go down, and it can go sideways. In life there are very few things that you can simplify as easily as that.
So using MarketClub's Trade Triangles you are able to determine when the market is going up, in which case you want to be long, and when the market's going down, in which case we want to be short or out of the market.
We do follow a filtering technique with the Trade Triangles to help avoid trading losses. With any kind of trading or investing program, the risk of loss is always there. The key to success is how you manage those losses. Are the losses small enough as to not bite into your capital in a major way?
Again, when you're looking at market fundamentals or other ways to trade, they really don't tell you when to get out. Obvious examples of this would be Groupon or Zynga, that took unwary investors to the poor house.
But it's hard to fake a market saying everything is great, when the market is heading south. So what is an investor to think? I believe you have to trust your eyes and the direction of the market. After all, that's what makes up your bottom line.
Moving with the market, and going with the flow is what our Trade Triangle technology is all about. Trade Triangles do not predict what's going to happen, rather they follow what is happening. This puts you, the investor, way ahead of most other investors as you are following a game plan that leads to success in the markets.
Remember, Trade Triangles do not predict the future (nothing can!), but rather they access a huge library of past behavior that has proven to be successful. The purity of the Trade Triangles is evident in the fact that human nature has not changed in 2,000 years and neither has market perception.
Please feel free to comment on our blog about this post. We welcome your thoughts on our postings and polls which can be very telling as to what is going on in the economy and in politics.
Every success, in trading and in using our Trade Triangle technology. Try MarketClub Today!
President of INO.com
Co-founder of MarketClub