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Investment Philosophy

Everything in the universe continually alternates between order and chaos. In the stock market, this manifests between periods of accumulation/uptrend and distribution/downtrend in all time frames. Analysis should, as clearly as possible, consist of identifying shifts in supply and demand, and their reversal points. There are technical tools that allow us to do this.

It is necessary to develop a strategy that will suit your needs and personality, and for you to decide whether you should be a short-term trader or long-term investor. In either case, in order to be successful you should become familiar with these tools and learn to nurture your basic temperament.

Choosing technical analysis over a more fundamental investment approach is necessary if you want to develop an understanding of how the market works, and you will need to choose the tools that will best facilitate this understanding. These should include such basics as pattern recognition, the correct use of trend lines, breadth analysis, oscillators, moving averages, etc… Beyond that, it will greatly help you if you develop familiarity with certain methodologies such as Point & Figure charting and Fibonacci measurements to determine price projections. The Elliot Wave Theory is useful to understand market structure. A basic knowledge and appreciation of cycles will also be helpful. A good source for books on any subject you decide to study is Traders Press, (www.traderspress.com).

Since you play the market to make a profit, you will need to develop a thorough understanding of, and complete trust in, the tools you decide to use, and the methodologies you choose to follow, because you are competing with experts in the field. This will require persistence, in addition to learning patience and objectivity. All these can be mastered in time, but you will need to make the effort. If you are not willing to do this, then find someone who has a proper grasp of the pitfalls and potentialities, and utilize his advice.


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