Stock Market Strategy - Finding Your Way

"Money Makes Money," I used to hear people say in where I grew up. If you want to earn money in the stock market, it is important not to pay too much attention to daily published each day. Read carefully whether the market is going up or down, and by how much, but skip the off-the-cuff reasoning. Write down some notes of the news events that may affect the economic environment - an increase or decrease of tax will have an impact on after-tax profits, a copper-industry strike in USA that will mean higher prices and more business for Canadian copper producers. Take note of new reports concerning companies with shares listed on the stock exchanges, especially those firms whose stock you won or are thinking of buying. But do not let your view of the market perspective change in response to the opinions published each day. If you do, yo will never hold your opinion long enough to act on it, and you will become a nervous wreck in the bargain.

Creating your own view of the perspective for the market, and sticking to it until circumstances clearly show you are wrong, is one of the two principal methods of successfully playing the game the self reliant way. Successful stock market investors do not hunt with the crowd. They stalk their prizes in lonely isolation, believing that the consensus view of the future is usually wrong - a belief with much evidence to support it. This is so-called contrarian view is not as silly as it sounds when you first encounter it. Stock prices rise when there are more people willing in buying than in selling. It should not be surprising, there, that the majority of investors are bullish just before the market turns down - and that just before a falling market turns up again, you can hardly find a bullish investor.

The second approach is to ignore the hullabaloo over what the market is going to do next. Many thriving stock market investors do this. Academic evidence suggests there is no connection between what the market did yesterday and what it is likely to do today, next week or next month - the so-called random-walk theory. There is also a lot of historical evidence that suggests it is futile to try to predict how the stock market will react to economic developments in the short term. For example, it was considered almost a natural phenomenon that investors will react with enthusiasm to an economy that is expanding faster than expected. But at times in the last few years, investors have not always greeted news of faster-than-expected growth with zeal. So even if you had accurately predicted any particular piece of economic good news, you would not necessarily have done well in the stock market by making a short-term investment based on your prediction.

It is not easy to tell when a bear market is ready to rebound or when a raging bull market is about to collapse. If you are new, you need a good stock trading software to help you make decision. I strongly recommend Marl's Stock Trading Robot. I have made $632 in 2 months following the software's stock picks. This is not a lot of money but it works. You can read the full review of the software here: Marl's Stock Trading Robot Review.

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