Saturday, January 06, 2007

Change with the circumstance

Technical analysis is an inexact science. Here we are talking about probability and not certainty. No one can read charts correctly all the time. If you can, you hold the keys to unlimited wealth.

When you see black clouds, you bet that it is going to rain. When it doesn’t and the sky clears up, will you continue to bet that it will rain? Common sense tells you to bet against it now.

In the stock market if you know when to switch from being bullish to bearish or vice versa, you will be miles ahead of others. To survive, you must change with the circumstance. In an uptrend, buy on dips. In a downtrend, sell on rallies.

Good luck.