Ten Useful Recommendations

Method versus system
New systems of analysis can always be developed, some better than others, but the success in the market will be mainly due to the systematic and rigorous application of a method of rationally chosen method of analysis than the system that is in itself applied.

Independent thinking
In order to remain in the stock market environment, the most recommendable is to learn how to make money by analyzing the market in an independent way, through one’s own skills that can then be developed. In this way you can turn into the owner of your own destiny without depending on other people. By learning how to correctly read the signs of the market, your ability will be moveable and will go with you to any market of the world without having to require of torturous contacts or trust in data obtained through a net of strange information. The good data is only given to some, but the bad data is given to anybody.

Taking advantage of inertia
A stock that at first shows a systematic increase of price will have the tendency of carrying on in that direction until it reaches maturity. Once we have proven that the market has confirmed the tendency of price change, the transactions will need to be materialized in that same way. The market will continue on with its course until its inertia has become exhausted. All of the science will reside then in accreting the right buying moment. What is indispensable is how much the inertia lasts, and at which price its maturity reaches. This is why it is important to enter into the position as soon as the buying sign is obtained.

Not exposing more capital than the optimal amount
One of the most common mistakes is exposing more capital than should be. As has been mentioned before, there is the danger of falling in the very short term analysis by using indicators that give purchase signs and selling signs very often. We need to be careful with creating our own monster by processing too much information and calculating more statistic tools than necessary. The basic principles should not be overlooked given that in the end, the stock market game continues being in essence, a very simple thing: to buy at a determined price and sell at another higher price. Anybody can use the technical analysis but few get to fully understand it.