Stock Investments & Trend Following

Virtually everyone has some type of stock investments. Many have 401k plans and really do not have an investment strategy. Trend following should be one of your investment strategies for your stock investments. Stock investments need an exact plan. No emotion, no news rather a plan to know what to buy and when to sell. I look to buy the strongest and sell the weakest.

However with trend following and your stock investments do not have the false expectation of consistent month over month positive returns. Rather you will have low winning percentage trades. However this stock market investment strategy will have some winners that exceed all expectations. You will not have consistent month over month returns rather lumpy returns. This is how to compound money over time. This is what works. Most people seek the high winning percentages. This is why most people do not make money in the stock market. This is why most mutual funds do not even beat the market averages. You have to do the opposite of what the majority does.

In my trading, I look at new all-time highs. High can go higher. I look at all new-time hows. Lows can go lower. What I have learned over the years is that a small group of stocks that generate all of my returns have one thing in common, they defy the crowds logic. New highs continue to extremes, new lows fall to lower lows. This is reality of stock investments and trend following. People want to be right. People want to brag about their stocks. People do not want to take losses. People want low or no draw downs(Madoff returns).

Be different if you want to succeed in your stock investments.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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