Trading Basics 101

 

The most experienced and successful traders are almost always the ones who constantly refer back to trading basics.

 

The same principle is true for almost any endeavor including athletics, singing, skilled labor, etc.

 

Because the basics are the foundation for ongoing improvement.

And the crazier the markets become (and they will get crazier) the more you need to get back to basics.

 

 

 

So, let’s start off Trading Basics with one simple concept that most investors fail to recognize.

 

And that is how your main opponent is YOURSELF.

 

Huh?

 

That’s right.

 

We are our own worst enemy.

 

Especially when we fail to realize/understand the nature of markets and how they function.

 

As a result, once you accomplish that realization, you will see your real opponent is YOURSELF, not the grand cabal.

 

Yes, the markets are corrupt to an extent.

And there is also manipulation of certain sectors of the markets by some of the big players.

 

 

Trading Basics Are Consistent

 

 

However, as we’ve mentioned many times, the majority must be wrong because they are the fuel that propels the market… to the upside AND downside.

 

Example:  The market enters a flash-type crash when the vast majority is LONG, and they try to sell, but there is no bid.  (Cough!  October 1987, Cough! and February 2020, Cough! Cough!)

 

In addition, the majority must be trapped at the high, which then creates panic when the majority tries to sell but there is no bid.

 

Likewise, at the low, the majority is bearish, and the dominant trade is short.

Then, when they try to buy back, it causes a panic to the upside for the lack of offers (everyone is still negative).

 

Think of it as a pendulum swinging to the extreme on both sides, which propels the market movement.

 

Speaking of pendulums swinging, gold has finally reversed it’s downward trend of the last decade.

 

And it’s a result of one basic thing.

 

When confidence in government goes down, gold goes up.

 

It really is that simple.

 

And the trend towards loss of confidence in government is increasing exponentially.

 

Translation:  Stock rallies mean gold rallies.

 

Be sure to learn how to take advantage of the rising gold stocks we like in our Short and Sweet Tips column in our June newsletter (HERE).

 

Share this with a friend…even if they don’t realize they are their own worst enemy when it comes to trading.

They’ll thank YOU later.

 

And tell them:

 

We’re Not Just About Finance

But we use finance to give you hope.

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