xjo weekend zoomba lounge, page-129

Pisces I agree, I think a lot of chartists narrow their scope too much. This thread is a perfect example, we discuss the XJO, SPI CFD and O/S Indices, however rarely are the XJO constituents mentioned.

That's not to say it needs to be more complicated, more a case of it needs to be expanded.

The two most important needs of market participants are relatively simple.

1: is an ability to understand what type of market we're in. This isn't hard, uptrend, downtrend or sideways. That part is easy (on the surface).

2: is an ability to understand what type of participant you are, long term, short term, bias long, bias short. This part is much harder.

The thing is, what type of participant you are must match what the market is offering, when they don't match you will fail.

A good example is in this thread. You hear lots of complaints about the XJO underperforming and it's a dog yada yada yada . . .
The reality is that on any given week the xjo moves on average 350 points, futures and CFDs are generally 50% greater so lets say 500 points just to be fair. Now if the XJO moved up 350 points week after week we would be the hottest market on the planet and everyone would be gurus. So the issue isn't a matter whether we're moving or not as we are moving quite well; the issue is how we're moving. Quite simply the style or techniques of many participants don't match up with the market.

The solution?
There are really only two. Firstly there is no investing/trading style that will work in every market. So the solution is work to your strength, discover just who you are as a participant and be active when the market suits you. This means there will be occassions when you should not be involved. For many that time is right now.

Second is to become versatile, the strongest trait anyone can have is both an ability to understand and an ability to adapt. It's extremely hard to switch profiles, one day you're a day trader only to become a long term investor, or to be a bull one day, bear the next and neutral inbetween. Often you have to fight your natural desire to form an opinion - it's not easy.