You probably know the story of Sherlock Holmes and the 7% solution. He had a drug addiction. He needed the drug. He was able to control his addiction by taking the drug in a 7% concentration. Anyone with common sense knows you cannot survive on 7%. It is a slow death. When you retire you are familiar that most brokers and financial planners recommend you go into nice safe bonds that pay about 7% annually. That 7% solution will barely keep you alive until you die. Isn't there a better solution? Conventional wisdom states that you should become extremely conservative when you are old and retire so your funds will last you until you check out....

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When you stand on the ocean shore and watch the waves breaking you might become aware that the tide is coming in or going out. It is a slow process to watch the water retreat and when it finally gets to its lowest point it is almost impossible to tell if it has stopped or will retreat further. Plenty of wave action, but going nowhere. This reminds me of our current stock market. It still looks like the tide is going out because for the last 2 months all the major stock indexes have been inching down....

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IT'S REMINISCENT OF THE OLD children's tale about an old Chinese farmer who tells his friends his story, and they enjoin with "That's good" or "That's bad" on alternating lines: Farmer: My horse ran away. Friends: That's bad. Farmer: She came back with a majestic stallion by her side. Friends: That's good. Farmer: My son tried to ride the stallion and broke his hip. Friends: That's bad. Farmer: The emperor came through town that week and took every able-bodied young man away to war....

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Day trading is all about making buy and sell decisions. When you make a trade either your going to lose money or your going to make money, and some other times you will break even. When you win some body else will lose and so forth, but that's NOT what's important. The most important aspect of day trading is the knowledge FILTER you employ to make your buy/sell decisions. There are many "fantastic" strategies outhere, but you need to test them in order to discover which ones help you the most. That's part of your homework as a daytrader....

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It looks like we have now entered a new bull phase in the stock market and I have a question for you. Will you give back the profits that you make this time as you did in 2000? You sure don't want to, but you are not going to get any help from your broker. We saw the technology stocks and many mutual funds lose about 80% of their value. Many people did not want to open their monthly brokerage statements and I couldn't blame them. Were there any way those losses could have been avoided? You betcha, but you won't hear that from your broker....

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There are many important things you need to know to trade and invest successfully in the stock market or any other market. 12 of the most important things that I can share with you based on many years of trading experience are enumerated below. 1. Buy low-sell high. As simple as this concept appears to be, the vast majority of investors do the exact opposite. Your ability to consistently buy low and sell high, will determine the success, or failure, of your investments. Your rate of return is determined 100% by when you enter the stock market....

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Because you don't feel too sure about which stock or mutual fund to buy you decide to become a member of an investment club. Each of the members contribute a certain amount of money each month and then meet to decide what to buy or sell. It is a nice camaraderie, but what do you know about making money in the stock market? The members decide what services to buy to obtain information on stocks and funds. Certain members will be designated to do research on a particular stock and bring it to the next meeting....

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During the month of January the Dow Jones Industrial Average, usually referred to as the DOW, had an almost 1,000 point range, most of it down and the average investor has yawned and said 'so what, this has happened many times before'. Is there any reason to worry now? The terrible event of September 11 shocked investors who sold heavily and then watched the market climb back to where it was on September 10. The investing public as well as many professional money managers now believe that soon this year we will see the DOW move back up for another bull market like we had in 1999....

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When you become interested in a stock or mutual fund you can call your broker and he will send you reports on how the company is doing, what their management is like and what might be the projected earnings for the company and how the industry is doing. Great information. You will apply yourself to this mound of papers to determine if you want to buy the equity. You might also send for more reports from independent analysts such as Morningstar. You will become buried in papers. That is what the brokerage company wants....

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One of the most believed bits of conventional wisdom from Wall Street is to Buy and Hold. Any stock or mutual fund should be put away for eternity and never sold. This is total hogwash and is guaranteed to reduce your investment income. Brokerage companies never will advise you to sell. Last year over 1,000 stocks on the Nasdaq lost more than 90% of their value. During that same period of time brokerage companies issued 33,000 (yes, that's right, thousand) recommendations for their clients. Of that 33,000 only 125 were "Sell"....

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If you have not back tested your trading system, you might as well trade with your eyes close. In fact, whatever technical analysis criterion you use to trade with, be it moving averages, candle sticks, volatility breakouts, fibonacci retracements or any other trading system you have devised you're going to need to back test your trading system thoroughly and objectively in order to remove any possible doubt about it's capability. To remove any self-doubt you need to thoroughly back test or simulate your trading system in such away that it matches the conditions under which it will be traded....

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