How to Profit in Up and Down Markets

One of the first and most insightful books I have ever read about trading and investing is Stan Weinstein’s book



The main idea in Stan Weinstein’s book is this. According to Stan, there are four stages in any market. Here’s my interpretation of Stan’s advice.

In Stage One, prices go sideways. That is the time to wait with cash safely tucked in your mattress.

In Stage Two, prices go up. That is the time to buy.

In Stage Three, prices go sideways. That is the time to exit longs and wait with cash in hand.

In Stage Four, prices go down. That is the time to short sell.

In this week’s blog, I’ll be writing out my thoughts each day about what the stock market is doing. For that purpose, I’ll use the Exchange Traded Fund SPY as a representative of the market for discussion purposes.

...cont'd tomorrow...

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Copyright 2008 Raymond T. Lee. All rights reserved.
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