Montag, 3. Oktober 2011

The 3 golden rules of investment

I just read a news about gold-price and how it should drop because of certain philosophical aspects. First of all, there are always people trying to relate market prices to culture, peoples mentality or political ideologies. But the truth is...just forget it!

The common market in a lot of situations does not behave rational in any way, since people do not behave rational all the time. How come analysts get away with saying that a market is overrated because it has seen a (too) steep rise in demand? In my opinion everyone who knows little about price-action is wiser than these so called professionals!

Here are the three golden rules of investment:
  1. Make your own decisions based on fundamental / technical analysis
  2. Have a trading system, including maximum loss and profit-target
  3. (Most importantly!) Stick to your system!
These rules will lead you on your way of becoming a steady and more successful trader. On that way, you will learn to not believe any opinions right away, but to check it against your trading system. You will be able to actually tell someone why you think a market is likely to move in a certain direction and prove it by means of price-action or fundamental data.




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