Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Palladium Surges above $2,400. Is It Sustainable? - 27th Jan 20
THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting… - 27th Jan 20
Stock Market, Gold Black Swan Event Begins - 27th Jan 20
This Will Signal A Massive Gold Stocks Rally - 27th Jan 20
US Presidential Cycle Stock Market Trend Forecast 2020 - 27th Jan 20
Stock Market Correction Review - 26th Jan 20
The Wuhan Wipeout – Could It Happen? - 26th Jan 20
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Adapting to Systemic Dysfunction, Every Investment is a Pure Gamble -PERIOD

Stock-Markets / Financial Markets 2010 Jun 02, 2010 - 01:49 AM GMT

By: Joseph_Russo

Stock-Markets

Best Financial Markets Analysis ArticleSame As It Ever Was With the possible exception of Black Swan events, and beyond the amplification and speed with which share prices can persistently collapse following negative episodes of such, there is no difference in navigating markets now (amidst a heightened state of systemic dysfunction) relative to doing so at any other point in market history.


House of PainBlack Swan

Having sad that, we suppose a better title for this article might have been "Why it is essential to maintain sound risk management and if possible, to systematically automate proven technical disciplines regardless of how good or bad prevailing market conditions appear", but it just seemed too darned long.

Every Investment is a Pure Gamble -PERIOD

DiceSpecifically relative to ones clearly defined objectives and tolerance for risk, (another way mainstream answers the question of how much of a gambler one may or may not be), it is in our view, far better to be continuously prepared rather than finding oneself in the awkward situation of enduring excessive levels of discomfort while adapting to changing market conditions.

Be it a Day or a Lifetime

By their very nature and throughout all timeframes, financial markets have always been and shall continue to be notorious for their sudden and dramatic mood swings.

Whether over the course of a single trading session or that of an entire lifetime, sudden and repetitive swings from optimism to pessimism are the core elements upon which share markets thrive.

The House must thrive or there is No Game

Unfortunately, most fail to recognize the nature of the terrain, which suggests that the very core elements upon which markets thrive are those typically responsible for the inevitable deterioration of participants (gamblers) account balances (bankrolls).

Casino exterior

FormulaHappy and sad

Maintaining Tactical Context

Relative to all levels of engagement, the inevitable and never-ending succession of cyclical shifts from optimism to pessimism, and the near-impossible timing of such, makes it extremely difficult for lone participants to position themselves on the right side of trend, not to mention reversing positions when trends inevitably change direction.

Chess

The all too common quandary described above provides testament to the necessity of maintaining strategic disciplines relative to the context in which one has sought to engage in trade (Gamble, Risk, or Speculate) for his or her own benefit.

America

The land of innovation and entrepreneurial spirit could not exist without risk and high stakes gambles. Simply put, innovation is born of extreme risk and intense speculation. Nothing ventured, nothing gained - and to that we shall add, nothing lost - except earned freedom and limitless opportunity.

Founding fathersHand We The People ...

Casino Interior

One Big Casino

(always has been - always will be) Be it the long-haul investor hoping to cash out with a big retirement bounty after buying and holding for 20-years, or the day trader looking to scalp a day's wage by the end of a trading session, each are gambling on a future outcome to their benefit.

Casino Interior

Tipping the Odds

Despite the greater odds of coming out ahead over a 20-year period vs. a single trading session, there is NO GUARANTEE that such odds will deliver. Just ask those who in 1989 bought and continue to hold large portions of their retirement nest eggs in the Japanese Nikkei Index. After 21-years, the Japanese stock market is still down some 70% from its all-time highs.

Nikkei Chart

Pervent return

Find a Reliable Compass

Accurate charting and forecasting provides traders and investors with one of the most essential tools of navigation, a compass. A professional chartist should be able to forewarn his or her readers of any potential obstacles ahead, and then quickly reorient them upon moving through such waters with specific contingency for their preferred method of travel and comfort.

Compass

No Surprises

Market shocks, sudden shifts in trend, temporary panics, or true Black Swan events, should never come as a surprise for those who employ the services of a chartist who is worth his or her weight.

In part-II, we explore how this chartist plots a course in real time, and we shall reveal precisely where this chartist believes we stand (in Elliott terms) in the grand scheme of things.

Until then, Trade Better/Invest Smarter

By Joseph Russo

Chief Publisher and Technical Analyst
Elliott Wave Technology
Email Author

Copyright © 2010 Elliott Wave Technology. All Rights Reserved.
Joseph Russo, presently the Publisher and Chief Market analyst for Elliott Wave Technology, has been studying Elliott Wave Theory, and the Technical Analysis of Financial Markets since 1991 and currently maintains active member status in the "Market Technicians Association." Joe continues to expand his body of knowledge through the MTA's accredited CMT program.

Joseph Russo Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules