Be Neither Bull or Bear, Be A Trader

It still amazes me how people always want to be on a team. In politics, there are republicans and democrats. In sports such as baseball, there are National league fans and American league fans. In the trading and investing world, there are bulls and bears. Everyone feels like they have to pick a team, but the point of investing is to ultimately make money. As a trader, you should be neither bull or bear, but be on the right side of the trade.

In September 2012, I was on a popular financial radio program warning people that Apple Inc (NASDAQ:AAPL) was giving us short selling signals. Many of the listeners did not like that analysis. Many followers of the radio program actually seemed angry that I would even give them that analysis. These people behaved like loyal believers and followers of Apple Inc. I had to remind them that the Apple Inc CEO doesn’t know them and that we are in the business of trading not cheer-leading. As you all remember, Apple Inc stock dropped by over 200 points a couple of weeks after making that call. Often, people will become attached to a stock if it has made them money in the past. This year I have seen similar reactions by the public in stocks such as Tesla Motors Inc (NASDAQ:TSLA), Ambarella Inc (NASDAQ:AMBA), and others. Please note that all of these stocks have fallen significantly from their highs over the past several months.

There is an old market adage that traders and investors should follow, never fall in love with a stock. Simply put, stock are for trading not loving. If the trend is up a stock should be traded to the upside until the chart says it can no longer move higher. The same for downtrends, if a stock is declining it should be shorted until the chart says that it can no longer move lower. This is what trading is all about. Remember, be neither bull or bear, be a trader.




Nick Santiago

Chief Market Strategist


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