The Absolutes
- You can only make money if you are with the trend.
- If there is no trend, you cannot make money, but you will not lose money.
- You will lose money if you are against the trend.
- The weekly trend is the most dominant and important trend.
- The bigger the deviation from trend, the harder it is to protect gains with stops.
- All excessive moves eventually ‘regress to the mean’.
- One must utilize the concept of ‘regression to the mean’ in order to protect gains and when establishing positions.
- You do not need to institute or liquidate positions with an ‘all in’ or ‘all out’ mentality. Usually the best methodology is to enter or exit the market in measured steps.
- There must be an exit metric that produces the requisite discipline that successful investors need.
To be successful in investing or trading, keep it simple by utilizing two absolute principals:
- Trend and regression to the mean
Socratic questioning that will increase the odds of investment success
- Do you want to boost your investment account or your ego?
- Do you want to profit or pontificate?
- Do you want wisdom & insight or affirmation of your ingrained beliefs?
Please review these principles regularly so that you will make reasoned decisions and not succumb to emotion or the seductive but destructive pitch of shills and their media acolytes.