5/06/2010

Two types of traders


You will see two types of traders today:
  1. Those who will externalize the problem
  2. Those who will internalize the problem
The first kind will learn nothing from today. They will spend their time shouting at quant funds, fat fingers, SEC, exchanges, Washington, Obama. Goldman and so on.....

The second kind will develop method to as best as they can avoid a situation like this again....
The easiest thing is to externalize the problem..

But at same time you know there are traders who were on right side of this trade.
Not based on luck but based on method...

Minervini was out before this selloff and he has detailed his method for arriving at his decision...
Many other CANSLIM traders were in cash or lightly invested based on their method of looking at leading stocks.
A blog I have highlighted couple of times Wishing Wealth was also out and warning about this market since last couple of days based on his GMI index.

My own Market Monitor timing model was warning about a correction based on big moves breadth.

So people do have methods to determine when to be aggressive and when to be cautious.
Study those method...

It is easy to externalize problems, but if you are looking for real growth as a trader, internalize problem and search for solutions...

This applies not only to trading but to life in general....

Some reactions from Stockbee Members today:

Can I just raise a glass of single malt scotch to toast the market monitor - it got me out last week. It's taken 6+ months, but I'm finally getting a feel for MM :)


WOW....Thank you Pradeep, because of you I am in cash and not long.....Got out of my shorts too early but that is OK... Oportunity on the recovery...you definitely have my respect


Pradeep, my respect for you and MM have gone up hundred fold. Despite you teaching, I have done some stupid things - but I am in a much better position than the last market meltdown.


i second that! thank you Guru


: I am in the exact same boat as you are :). Guru, you are actually Maha-Guru.. "Shat, Shat Pranam"


now double thanks.... :0 i was sitting back and watching and laughing at the action... 'guru for president'


i hope everyone is having as much fun as i am :)


site has taught me that cash is a position. sometimes the best decision is the one not taken.


Thank God for Pradeep and his Market Monitor!


Pradeep - please bill your drink to my membership account. That $150 has paid for itself over and over and over and over and over and over and over.


guru have a drink. it's on me :)


Let me also chime in..For the first time in 8years moved to cash entirely last week and was in complete tune with MM numbers. Going into today had a couple of short positions including Guru's pick SOHU. Was a bit slow to cover into the frenzy. Nevertheless, the profits were protected. Not a penny lost infact made some in the catastrophe. Many thanks to Guru and his ingenious invention


Hats off to you Pradeep and your MM...moved to cash last Thursday, as I learned to respect MM signals the hard way. I owe you a debt of gratitude for all your apprenticeship. Cheers!!




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