|The Rules of the Game
|May 8, 2007
What if investing in the stock market was a game?
Well, for one, it would be a lot less anxiety-inducing if we were given paper money! But then the joy of winning would be short-lived and all we’d have to show for it would be colored paper money.
Luckily for us, the market is like a big game with REAL money. Cause let’s face the music — at the end of the day we are all in it for the money. And that’s it.
The objective is clear: Grab hold of as much money as you can (legally, of course) and hold on for dear life!
# of players required: Just you and me… and the rest of the free world! (Of course, I’m partial to anyone reading Trade Talk or anyone who subscribes to Trending123.)
The rules of the game: Depends on how much money you want to make.
But for our purposes, we’re just going to concentrate on my rules of the game — those for anyone following technical analysis and the way we do things at Trending123.
Rule #1: Whether you take profits just in the nick of time OR you happen to take them too soon, NEVER LOOK BACK. What’s done is done.
My Trending123 subscribers and I took profits on April 27th and we’re not looking back. The heavy amount of cash burning a hole in our pockets is reason enough to be overjoyed and patiently waiting for a market correction that will catapult us back into the market with new plays!
Rule #2: Never lose your cool. Okay, that’s a tough one to maintain especially when there’s real, green money involved.
But let me tell you something, if you’re not fully prepared for the coming correction that I see unfolding any day now…boy are you in for a nasty surprise! Did you freak out when the last correction hit at the end of February? That was NOTHING compared to what we’re going to see next. This one is going to be stronger and deeper — and it could knock you off your feet if you let it!
Rule #3: The stock market and our stocks do not always work in tandem.
Er, what’s that—you say? Okay, right now the stock market (with the exception of today’s mixed results ahead of the Fed meeting tomorrow) is doing spectacularly well session after session.
But if you look at the charts, you’ll see that the stocks are not following the market. (Join me today and you can see what I mean.) That is, fewer and fewer stocks are participating in these oft-celebrated new highs.
So let me ask you, if the stocks you own aren’t making new highs…what does it matter that the market IS making new highs?
Trick question. It doesn’t.
Rule #4: Pay attention to the charts. They’ll tell you what IS going on in the market (rather then you speculating about what could happen).
For instance, some of you may think that you could buck the current trend (from Rule #3) and make money from your portfolio stocks even if they aren’t following the market.
Well, if you look at the charts and you see the market highs and your stocks are the ones not following that upward pattern — then CONGRATULATIONS — you have succeeded in finding the stocks that are going to do well!
Don’t Get Carry-Traded Away
The carry trade is a trading method that attempts to exploit the difference (or “carry”) in interest rates paid for one currency versus another. The idea is to borrow money in the low interest rate currency, and lend it in the high interest rate currency, in order to profit from the spread between the two.
For example, the Bank of Japan set short-term interest rates at 0.5% in early 2007, while the U.S. Federal Reserve kept rates at 5.25%. You can borrow the equivalent of $100,000 in yen—i.e., 11,900,000 yen at an exchange rate of 119 yen per dollar—at an interest rate of 0.5%. You can then exchange the yen for $100,000 and lend the $100,000 at the U.S. interest rate of 5.25% (e.g., by buying U.S. bonds). Excluding other costs, your profit would be the difference between the two interest rates, or 4.75% (5.25% – 0.5%).
The problem is that currency exchange rates and interest rates can change and lead your borrowing costs to exceed your lending income. Also, the price of a bond or other security you invest in could decline.
What does that mean for you right now? With the massive carry trade speculation going on, there could be a huge unwinding of carry trades. (Remember, the Fed, the Bank of England, the Bank of Japan, and the European Central Bank are all due to meet soon.) And that could have an enormous impact on your portfolio. It’s one of the many factors I’m keeping an eye on for my Trending123 subscribers. Don’t get “carry-traded away.” Join me at Trending123 now.
So how do you win the game?
By succeeding at the objective — making and keeping the money you’ve made!
My best suggestion for making the best profits you’ve ever made? Joining me at Trending123 of course!
Last week I dared you to give Trending123 a try. A lot of you did. Some of you may have remained skeptical. After all, the market has been sitting pretty — thinking highly of itself even since I threw out my dare last Tuesday.
But I’m sticking to my guns here. I’m even more convinced of a coming correction. That’s why I’m going to take the tried and true tactic of children everywhere — I’m gonna throw out a DOUBLE DARE!
And even though the stakes have changed (you can’t ignore a double dare you know!), the Trending123 guarantee has not. You still have 90 days where you will be fully protected by our money-back guarantee.
So take my double dare to be sure you’re with me when the correction hits and my buy alerts go out!
P.S. When I called the previous bottom my subscribers made a boatload of money riding our stocks all the way up to where we are now in stocks like CEGE (gained 96% in a 5-day period) and GROW (went up 60% and 70% in a single month.) You don’t want to miss out on the next round of profits — click here for a special offer to try Trending123 today.
P.P.S. Who wouldn’t want the chance to try an experienced trading service — one that can show you how to earn sudden profits — 10%–30% gains (and sometimes higher), often in a matter of weeks, or even days? Especially when you can get in before the newest stocks—set to profit from a potential correction—are chosen!