Follow The Money Train
The Common Sense Approach
Soooo... it doesn't take a rocket scientist with a doctorate in Nuclear Fusion to understand that the Stock Market is somewhere between Jupiter and Pluto at the moment - and this means - that as a Trend Trader - in theory - you should be swimming in a bathtub full of money by now.... and If you're NOT swimming in a bathtub full of money - may I suggest that it might be a good idea to learn a Trend based style - just like the Warren Buffets and the George Soros template for trading....It's proven and this is what myself and my students do... there is no doubt - it works!
The question I am going to cover in this weeks blog is..... how do you know which Market to trade at any given time? (i.e Commodities, Foreign Exchange, Stocks).
Considerations to Take
Those of you that follow my Social Media closely - you'll know that I have posted lots of analysis on various USA and Asian Stocks which meet the criteria for my Trend based style of Trading and I've posted a minimal amount on the multitude of alternative Markets available (Oil, Gas, USD, EUR etc) or any of the other popular markets that all of the Day Traders seem to fall in love with, and given that I've had an obscene number of emails / messages asking what Currency they should be trading etc.... so I should probably clarify just what my stance is.
Quite simply... when these markets move, I'll move in, but as it stands at this exact moment in time, these markets are simply not moving a great deal at the moment and there are no real trends in play - the simple reason for this, is that the BIG money, and the Market Makers are moving the USA Stock Market.
What is Big Money?
When I talk about Big money - I'm talking about the Hedge Funds, the Banks, the large Investment Corporations - they all have portfolios that are very heavy on Stocks at the moment as this is the market that is moving the most and we're currently trading at All Time Highs... all of this information is incredibly important to understand, and when you begin to understand the market dynamics, it's not a stretch to say that you'll find more consistent profitable trading following the Big Money.
Following the money quite simply means that you're choosing the path of least resistance, as these markets will move the most in terms of price (and this is absolutely what we want as Trend Traders).
I consider Trading in any other markets at the moment a complete waste of time and a complete gamble.... that's not to say you cannot make money from them... but it's certainly not the smart play.
There will come a day when the USA Stock Market will cease to provide the kinds of returns that prompted the big money shift into USA Stocks in the 1st place, and when this happens.... this market will decline, and 1 of the alternative markets highlighted earlier in this article will start to move, and we'll start to see these trends will start to develop within these markets, and by having this information available... it really will give you a good head start.
When 1 of the many areas of the market begins its decline, you'll soon notice where the big money shift is moving to because when you begin analyzing the OVERALL market, you'll see when 1 area begins declining, and you'll notice where the big money is shifting its capital and this gives you once again, the path of least resistance.
As a Trend based Trader - there is a mantra -
"follow the money"
.... so when the USA Stock Market eventually crashes.... you will have the knowledge to start scanning these alternative markets immediately - and you can start building profit all over again in a new market. Trend Trading does not only apply to 1 market... it applies to ALL markets... but it pays to only move into these alternative markets when the trends start to develop, so there can often times be a period of sitting on the sidelines - which is a skill in itself.
Trend Trading is NOT rocket science - it is a very effective method to learn - and if you are interested to know more and have some questions - drop me an email.
If you’re interested in education and you struggle with your trading results… we’d love to hear from you.