Feel Good Friday Rally In The Stock Market For Trend Followers
After Fridays ( relief) rally is it safe to come out and play or invest? Probably not, As a trend follower the trend is still down on the SP 500. Even with Friday’s nice rally, the index is still below the 50 day moving average as well as most importantly 200 moving average.
Nothing has changed….plunging home sales, a non relenting weak employment market and the quarterly rate of economic growth is at 1.6 percent. Contrary to Bernanke’s speech the question arises has the FED ran out of miracle economic bullets? Time will tell and I surely do not predict but rather react. There are lower highs on the stock index charts and days like Friday are to be expected as a trend follower. It is not fun to see profits given up as in the bonds….but trend following takes a strong stomach and the utmost of discipline and patience.
The reality is most investors want the quick profit and be told what to do. This is not what successful trend following is in the commodity or forex markets. Have a plan…follow it…
Diversify between possibly your own trading…or between groups of commodity trading advisors to attempt to compound your way to wealth. It is surely not easy but with a plan…discipline…and patience it can be achieved.
Futures trading involves risk. People can and do lose money