Maybe it’s my personal opinion, but I think that times are changing. Nobody can say for sure because it or not. The media give us a picture of the world, which is not accurate. Journalists say and write about the presidential primaries, the real estate market and the recent mergers of banks associated with the crisis in the mortgage lending sector, but the economy has been undergoing a significant transformation. Prediction of long-term trends — not my hobby — but it would be wise to prepare for some big changes. Perhaps it’s time to think independently and creatively. If you can come to this idea, you get a huge profit.
Do not follow the crowd! You warned about this again and again. But what does that really mean? Of course, you should never listen to analysts from the media or blindly follow their forecasts, but there are times when it really makes sense to follow the masses, especially if they are right. Following the crowd is characteristic of all living beings. In numbers there is safety and comfort. As soon as he appeared on earth, people realized that security depends on the ability to unite together and work group. All people have inherited these habits, and this proves a sense of security that we feel, following the crowd. Such a pattern is productive most of the time. If a sufficiently large «crowd» believes that the current decline in the market is ephemeral, it would be very wise to prepare for the bull market. However, this is true only if enough people believe in the possibility of a bull market in the future, and if they have enough money to enter the market with these thoughts. However, in the long term the market may reach fundamental forces, which are all equal in that they believe the bidders. Of course, beliefs, investors always have values, but the fundamental factors also mean a lot.
For short-term trader success curled on the ability to anticipate what will happen soon. Profit is derived from volatelnosti, while the trader accepts the risk budget, identifying a good chance for a big profit. Almost always, this means that a trader goes its own way. In trade books that paradigm of behavior is called «thinking like opposition.
My favorite example of «oppositional thinking» this action, which grew during the Great Depression. In times of recession or depression, it seems stupid to believe that companies that produce luxury items, will be profitable. But what people need in such times? First clothes and food, but that during the Great Depression, consumers need expensive entertainment. In those days, people went to clubs and movies, but what was with those who did not allow this feature? They stayed home and listened to the radio. If the investor bought shares of RCA in this period, he earned a colossal profit. While history repeats itself is not always something like this we can see in the future, when the economic situation will change. Think about the development of business, and that we may need in the near future. There was a time when computers were so expensive that there were exclusive stores such as CompUSA. Now this is not necessary. When the 70-ies the price of gasoline went up, people needed a little more economical cars. Major auto manufacturers were not ready for this, and they are still paying the price for this lack of preparedness. What will happen in the future? If you can predict it, you will earn lots of money.
It is much harder than it seems at first glance. Changes can predict when we are at the reversal point. Then we can develop a trading plan and capitalize on it. Sometimes there is no need to predict globally. But if we enter a bear market cycle, then make the traditional methods will become much more complicated. (It is not necessary now, I give numerous examples and citations about how traders have earned the status of bear markets. Maybe someone that was easy, but clearly it is not easy for everyone. Let’s start with the fact that many traders simply did not really know how to invest in «short», and in addition, many investors do not want to invest in such periods, leading to a shortage of money, and traders have to earn trading against each other that much harder).
Maybe tomorrow you can not «bear» a global idea, but we must learn to think creatively. Who knows, maybe you’ll think it’s a new angle. What would happen if gasoline reaches $ 4 a gallon? Will Toyota continue to earn on their hybrids, or at Ford and GM appear sufficiently advanced «hybrid»? I do not know. It’s only a matter of predicting what will happen next.
To go against the traditional beliefs in times of change must be a man of a certain kind of character: a man who is not afraid scored and is not afraid to be wrong. Someone can creatively explore markets, the economy, it is necessary to the masses. This is worth thinking. If you can predict the future of a great idea at the time of changing economic, political, or consumer trends, you can earn more profits, while all others will lose their deposits.