Never let your profit turn into a loss. In forex trading, a few seconds might be enough for the market to move into the negative territory and wipe out all of the pips gained by you. As a trader, your number one focus after entering into a trade is to determine when to get out. If the position is losing money, you can use the traditional stop loss strategies.
In addition, in my IRA, I can buy the inverse funds when the timer is bearish. Being able to trade in both up and down markets adds tremendously to my Annual Rate of Return [ARR]. Since I’m trading indexes combined with a market timer, my draw-down has been minimal even though these ETFs are leveraged. Furthermore, their ARRs have been excellent.
The deteriorating PMIs should, in our view, trigger a move from the ECB. We now expect the ECB to lower interest rates at the June meeting. We expect a one-off rate cut of 25bp – leaving the refi rate at 0.75%. Deposit rates are likely to be left unchanged while the marginal lending rate is expected to be lowered 50bp to 1.25%. If Investor Sentiment worsens on Greek or Spanish concerns, this could trigger additional non-standard measures such as longer maturity LTROs. This is not our main scenario though as we continue to expect a viable solution in Greece.
It is imperative that you obtain a robust market timer that will work well in bullish and bearish markets. Not only does it have to work well over a wide variety of time periods, but it has to be solidly founded so that it will work in the current market.
Unless you have traded you will have no idea what it feels like to trade – the intense concentration when you have a position, especially a bad one that you are riding or how exhilarating it is when you make consistent profits! Even better is the feeling when you have ridden a bad position and it’s come good, even when most bad positions are better being cut (it takes experience and judgment to be successful in this type of situation).
The third phase of the market cycle will be dominated by the sellers. In this part of cycle the bullish sentiment of the previous phase turns into a mixed sentiment. Here, the bull loses its faith and bears take over. Distribution phase gives traders signal to sell or short. This phase could be witnessed by chart patterns like double top, head and shoulder etc. here, the traders who are unable to sell for a profit will settle for a breakeven or a small loss.
There are many good books, magazines, articles, videos, written by well experienced stock experts. Get some of these materials and go through them. The knowledge you will acquire from reading these materials is enough to make you a stock guru. Good luck!