New Setup for 2012?

For the next couple of weeks, everyone writes for a living will offer even more investment advice, some old some new, most are useless.

So many people told me they did something with their money because they read "A" article. For example: a guy had 100% in bonds, he switched to SPY stock fund 100% after reading an article. And now he is sitting on losses.

So what to do, many ask. Nothing, if you don't decided to stay humble and stay the market, you will never get anything besides random wins.

Remember the market is always right and if you want to win, you should trade on your own analysis:

"A man must believe in himself and his judgment if he expects to make a living at this
game. That is why I don't believe in tips. If I buy stocks on Smith's tip I must sell those
same stocks on Smith's tip. I am depending on him. Suppose Smith is away on a holiday
when the selling time comes around? No, sir, nobody can make big money on what
someone else tells him to do. I know from experience that nobody can give me a tip or a
series of tips that will make more money for me than my own judgment. It took me five
years to learn to play the game intelligently enough to make big money when I was
right." -- Reminiscences of a Stock Operator, p.27

So how do you believe in yourself when you have been losing. The answer is no, you need to develop a winning system to starting believing yourself. You need also to believe all systems are imperfect and will run into a dry spell. But if that is your system, you know it will start working again. Whereas if that is someone else's system, you will call it quit.

There is a guy, he once boasted to me that he had one time making six figures in one day following someone else's system. But he lost it all and told me never to get close to trading. I told him I have been doing well, I make 6% per month. He said that is good, be stable......wait a minute, 6% a month! that is a lot, he then told me to keep all my winnings to compound it. I told him this is not part of my system and I shut up.

For me to keep winnings after winnings, I need to withdraw money monthly. And it is just me.

Here is the deal, trade small until you have refine your system to a winning system under the test of time. That includes everything from the way you log in to your account, they way to get quotes and of course your rules.

Best of luck in new year.

shorts: the whole market
longs: nothing

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