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» ධම්මික පෙරේරා කෝටි 16 ක කාරයක් ගෙනෙයි
Yesterday at 9:31 pm by soileconomy

» ආර්ථික අර්බුදය ඉක්මවා ගිය දේශපාලන අර්බුදය හමුවේ 'රුපියල'
Fri Feb 16, 2018 7:00 pm by Ethical Trader

» Dividend Announcement
Fri Feb 16, 2018 6:43 pm by nihal123

» SAMP.N0000 (SAMPATH BANK PLC)
Fri Feb 16, 2018 2:18 pm by Ethical Trader

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» APLA.N0000 (ACL PLASTICS PLC)
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» ජීවිතය පටන් ගන්නේ 60න්
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» විගණකාධිපතිගේ 2016 වාර්තාව මෙන්න
Tue Feb 13, 2018 12:31 pm by Ethical Trader

» JINS.N0000 ( Janashakthi Insurance PLC)
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» Boost for foreign investment in Govt. securities
Thu Feb 08, 2018 12:45 pm by Ethical Trader

» අනිලානා පුද්ගලික නිකුතුවට කොටස්කරුවන්ගේ සහාය පතයි
Thu Feb 08, 2018 9:28 am by The Invisible

» CCS.N0000 ( Ceylon Cold Stores)
Wed Feb 07, 2018 7:39 pm by Ethical Trader

» ලෝක ආර්ථිකය කඩා වැටෙද්දී එහි බලපෑම කොළඹට දැනුන හැටි
Tue Feb 06, 2018 11:13 pm by nihal123

» තෙල් මිලේ වැඩිවීමෙන් ගුවන් ටිකට් මිල නගී
Tue Feb 06, 2018 11:04 pm by Ethical Trader

» ජනාධිපති පරීක්ෂණ කොමිෂන් සභාවෙන් ලද, සිංහල භාෂාමය වාර්තා තිස් හතර (34)
Tue Feb 06, 2018 11:04 pm by Ethical Trader

» විල්පත්තු "වන විනාශය": පෙත්සම සලකා බැලීමට අධිකරණයේ අවසර
Mon Feb 05, 2018 9:10 pm by nihal123

» උදයංග වීරතුංග රැගෙන ඒමට පොලිස් නිලධාරීහු ඩුබායි වෙත
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» බැඳුම්කරය: ඇලෝසියස් සහ පළිසේන අත්අඩංගුවට
Mon Feb 05, 2018 9:08 pm by nihal123

» Laughter the Best Medicine
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» TPL.N0000 (TALAWAKALE PLANTATIONS )
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Fri Feb 02, 2018 7:57 pm by nihal123

» කොළඹ කොටස් අසාමූහිකරණ පනත පාර්ලිමේන්තුවට
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» BBC කණ්ඩායමක් තාලිබාන් පාලන කලාපයකට ඇතුල් වෙති
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» වර්ෂ 152 කට පසු දර්ශනය වන 'සුපිරි නීල රුහිරු සඳ'
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» ලංකා බැංකුවට අයත් ජනශක්ති හිමිකම විකුණයි
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» අයවැය ක්‍රියාත්මක කිරීමේ දී පාර්ලිමේන්තුවේ අධීක්ෂණය දුර්වලයි
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» ජනපති හා ADB අධ්‍යක්ෂ මණ්ඩල සාමාජිකයින් අතර හමුවක්
Thu Feb 01, 2018 4:51 pm by Ethical Trader

» තවත් කොටස් තැරැව්කාර සමාගමක් වසා දමයි
Thu Feb 01, 2018 4:50 pm by Ethical Trader

» ජනපතිගේ රැලිය ආවරණය කිරීමට ගිය මාධ්‍යවේදීන්ට "තර්ජන"
Wed Jan 31, 2018 6:59 pm by soileconomy

» Bank of Ceylon divests stake in Janashakthi Insurance
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» වෛද්‍ය වර්ජනය: රජයේ වෛද්‍ය නිලධාරීන්ගේ සංගමයේ ඉල්ලීම් මොනවාද?
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» නිවුන් අලි උපත්: මේ කරුණු දැන සිටියාද?
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» කලා කෘතියක් ඉල්ලූ ජනාධිපති ට්‍රම්ප් වෙත 'රන් වැසිකිලියක්' - වාර්තා
Sat Jan 27, 2018 6:37 pm by Ethical Trader

» TJL.N0000 (Textured Jersey Lanka PLC.)
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Thu Jan 25, 2018 5:02 pm by Ethical Trader

» RULES ON ALL OR NONE (AON) BLOCKS
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» "දූෂණය" ගැන මහින්ද රාජපක්ෂට නඩු පවරන්න - ජනාධිපති කොමිසම
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» හිඟයක් වැළැක්වීමට ලේ දන් දෙන්න: ජනතාව වෙත ඉල්ලීමක්
Tue Jan 23, 2018 7:12 pm by Ethical Trader

» බලාගෙනයි, 'ගුවනින් අසූචි'!
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» සිව් හෙලයේ ඉතිහාසය නිවැරදි කිරීම
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» ප්‍රගීත් එක්නැලිගොඩ: "ෆයිල් අතුරුදහන්වීම" ගැන සන්ධ්‍යා හමුදාපතිට කිවූ දේ
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»  බැඳුම්කර වාර්තාව
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» "මිසයිල් අනතුරු ඇඟවීම වැරදි බොත්තමක් එබීමෙන්"
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» ඉන්දියාවේ ශ්‍රේෂ්ඨාධිකරණ විනිසුරුවෝ අගවිනිසුරුට එරෙහිව ප්‍රවෘත්ති සාකච්ඡාවක
Mon Jan 15, 2018 2:06 pm by Ethical Trader

» එක්කෝටි විසි ලක්ෂයකට අධික ළදරු කිරිපිටි ඇසුරුම් ආපසු කැඳවයි
Mon Jan 15, 2018 2:00 pm by Ethical Trader

» ට්‍රම්ප්ගේ "ජාතිවාදී" භාෂාව ගැන කෝපය පළ වේ
Sun Jan 14, 2018 5:32 pm by කිත්සිරි ද සිල්වා

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Are We In A Bull or Bear Market?

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Are We In A Bull or Bear Market?

Post by nihal123 on Wed Jul 05, 2017 11:21 pm

Don't Predict: It Will Bias Buy/Sell Decisions


Are We In A Bull or Bear Market?

By Dr. Winton Felt


People often ask and pundits often debate the question: "Are we in a bull market that has just had a correction, or are we seeing the beginning of a new bear market?" People seem to debate such questions endlessly in the media and on Internet forums. Trying to predict the market is fun and can sometimes be satisfying to the ego. It is enjoyable to talk about such things at gatherings or around the water cooler. It gives a person a chance to look bright or knowledgeable. We all like to seem intelligent..

However, it is not intelligent for a trader to indulge in such activities. In fact, it is a big mistake for a serious trader to do so. Why? It entices the trader to develop a market bias. That is not all that it does. When the trader expresses an opinion to others, the trader then has a vested interest in that opinion being right. It reflects on his intelligence and expertise as a trader. That bias can influence decisions about buying or selling. When a position deteriorates, the trader might be more inclined to "hold and hope" rather than sell. If his opinion had not been aired publicly, he might sell more quickly.

Our own traders know that the most consistently profitable traders are those who have learned to live in the present. The trader should be focusing on "what is" rather than what he or she thinks "ought to be." Market conditions are constantly changing. A trader's perspective on a stock can change dramatically in a matter of minutes or even seconds. The trader can be more nimble with a mind that is flexible and free from the shackles of ego-satisfying pronouncements.

Let's assume that the market has just had a sharp decline and that we conclude it is a bull market correction rather than a new bear market. The opinion that the decline is only a bull market correction has nothing to do with how we trade. We do not invest with the notion that the market is about to rise because we believe it is, after all, a bull market. Instead, we focus on what the primary trend is right now. For us, the primary trend is currently down, and it will remain down until it becomes flat or until it is no longer down, and it will remain in that condition until it changes again. The primary trend is the trend that is most important to your investment time-horizon for a particular investment. For example, if you are looking to capture the gain a stock makes in a week, then the fact that its 200-day moving average is declining may not be particularly important to you. However, a declining 20-day average could be very important. If the 200-day average is declining but the 20-day average is rising, then you might buy a stock that gaps above the upper boundary of a trading range on a 100% increase in volume. If you are looking for a gain of 5% or more in a week or two, the fact that the 200-day average is in decline may be irrelevant to you. On the other hand, for a long-term holder a rising 200-day average could be very important. That person might consider it irrelevant that the 10-day average is declining.

Our own stockdisciplines.com traders tend to use the 50-day moving average as an indicator of the general direction of the market. Within the context of that direction, there may be counter-currents. For example, we may have a declining 50-day average but a 20-day average that has started to rise. If the position we are considering is likely to be closed out in a week, then we may decide that the current trend is on our side. What we believe about the ultimate direction of the market is not important, nor is it relevant to what we do. What the market is doing right now with regard to the investment time-horizon for the stock under consideration is very important. Always invest with regard to the current context. Crystal balls are cloudy, sometimes deceptive, and always irrelevant when planning a trade.

Get more on this, and see a list of tutorials on disciplines for investors and traders.

http://www.stockdisciplines.com/bull-bear-market
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Re: Are We In A Bull or Bear Market?

Post by CK on Thu Jul 06, 2017 6:32 am

Thank you nihal. Good reading about trading and also ego.
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Re: Are We In A Bull or Bear Market?

Post by Yin-Yang on Thu Jul 06, 2017 2:22 pm

There are two sides guys.

It has always been a strong believer of one thing who would make extraordinary gains.

++++++++

On the other hand; it is the same with extra ordinary losers also.
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Re: Are We In A Bull or Bear Market?

Post by pjrngroup on Thu Jul 06, 2017 3:10 pm

Thanks Nihal.

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Re: Are We In A Bull or Bear Market?

Post by CK on Thu Jul 06, 2017 3:18 pm

Yin-Yang wrote:There are two sides guys.

It has always been a strong believer of one thing who would make extraordinary gains.

++++++++

On the other hand; it is the same with extra ordinary losers also.
True
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Re: Are We In A Bull or Bear Market?

Post by Ethical Trader on Thu Jul 06, 2017 6:29 pm

Thanks Nihal.
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