We also suggest investors and traders eliminate certain stocks or trades if you are working with more than 20-25 stocks and five active open futures positions.
From our point of view, tightening up your holdings will cause you to focus more and sell the less attractive potentials. Some of the best traders in the world work only one market or trade. They simply focus 100% on that trade and earn more by adding more positions.
Some years ago we wrote markets could get so crazy at least one of the major exchanges would close-up for good and potentially others could see trading stopped for a few hours or even days.
The 9/11 event comes to mind but it could easily be something related to the impending credit crisis causing banks to close briefly. If you think I’m kidding remember Countrywide Bank, not Countrywide Financial (mortgage company) already had bank runs a few weeks ago in California. Northern Rock in England had bank runs for weeks and its not over yet.
Commodities have an impending six week annual correction next month, which can sell most of our favorite stuff.
We could short it but our policy is to never short a longer term bull market even though some pros can do it as they are glued to screens. Readers of Trader Tracks will receive market signals and guidance when pivot points approach. Nobody can call tops and bottoms precisely and neither can we despite having done it once or twice (pure luck). Rather, we like to find a trend and technically plan to take out slice out of the middle.
The forthcoming energy and precious metals corrections will drive out some cry babies. We have plans to deal with these normal adjustments and so should you.
Be careful out there as the markets are very demanding and at times can be ruthless.
– Traderrog
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