Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Five Investor Strategies to Control Market Greed

InvestorEducation / Learning to Invest Jan 13, 2011 - 08:12 AM GMT

By: Jared_Levy


Best Financial Markets Analysis ArticleMany of us (myself included) are drawn to the markets by the same force that can destroy our accounts: greed. While there are several ways in which greed can hurt us, there are five personal strategies that we can employ to control the market greed that is woven into our social fabric.

Personal Strategy 1: Be Aware That Greed and Fear Drive Price
Some may argue this über-simplistic view of the equity markets, but when you reduce that statement down to its purest form, it's true! When someone is willing to pay a higher price for a stock, that person, most likely on some level, is satisfying his or her greed instinct, in that they want to profit from their belief that the stock is moving higher. This works the same when fear sets in and you are driven to sell a stock at a lower price because of whatever fear you may have at that moment.

The problem with the word greed is that it carries a negative connotation and most of us don't like to admit our negatives.

Webster's Dictionary defines greed as "a selfish and excessive desire for more of something (as money) than is needed."

But what do we "need"? Is it bad to want to make a better life for yourself, pay your bills, and pay off your home or credit cards? Are we really being greedy? Maybe it should be that "need" and fear drive prices.

You see, for most of us who invest, we do so in order to make a better life for ourselves or our families, and enhance our way of life and retirement. The real problem is that these "wants" and "needs" in life, which are perfectly normal, sometimes end up getting in the way of our being a successful trader or investor.

Personal Strategy 2: Get to Know Yourself a Little Better
When I first started out as a trader, I had a lot to prove. I grew up from humble beginnings in Philadelphia, and I was always scared of being poor. I remember making my first trades thinking, "This could be the one that makes me a millionaire." I learned quickly that a thought process like that was a surefire way to miss my mortgage payment and even worse, lose my job as a trader.

The truth is, I was lucky enough to be taught at an early age from my mentor that the game is all about getting as many "hits" as you can and just staying on base as much as possible.

Translated into market talk, that means that you should strive to make as many good trades as you can (there will be losers), and once you are in a good trade, have a realistic profit target and either protect, scale out or simply exit the trade and walk with your profits, even if they are small. Staying on base means keeping your loss amounts minimal and moving on.

(Investing doesn't have to be complicated. Sign up for Smart Investing Daily and let me and my fellow editor Sara Nunnally simplify the stock market for you with our easy-to-understand investment articles.)

Personal Strategy 3: Listen to Your Gut
You would think that many retail investors fail because they don't have some secret knowledge or technology at their fingertips, but the truth is that the Internet offers you more resources now than when I started and I was able to prosper.

Having good technology and knowledge helps, but it's not the key to real success.

If you have been investing for over two years, you have probably got the basics down and can sense when stocks are being overbought or oversold. Follow those instincts and read the commentary from analysts and editors of reputable financial publications to confirm.

Usually the first clue is when your mother (who doesn't know finance) starts talking about the stock market. By the time it reaches someone who has minimal interest, the trend is probably coming to an end.

Personal Strategy 4: You Don't Have to Make That Trade
Yesterday, over 2 billion shares changed hands on the Nasdaq stock market alone; 9,500 of those trades were in blocks of 10,000 shares or more (generally there is some motivation if you are buying or selling 10,000 shares).

The point is that there is always opportunity long or short in the market -- don't force a trade because you feel like you "missed out." Trust me, there will be thousands more investment possibilities to come.

I remember from March-April 2009, the S&P 500 rose about 23% in a month's time. People couldn't believe it; they thought they missed it. Then after rallying some more, there was another 17.5% pop from July to August. At this point, many thought the rally was surely over, but then from its August 2009 highs until the end of the year, the S&P rallied another 13%... See what I mean!

Personal Strategy 5: Fix the Problem
The bottom line is that it's not technology, information, computers, account size, age or lack of intuition that is the biggest success culprit; it is our own greed and lack of action (or overaction) that gets us in trouble.

One exercise you can do to work on this is open up a virtual trading account at your brokerage firm (most offer them for free). In that account, I want you to make the investments you would make in your regular account, with the same typical investment size. But in this account, once you are in a profit of at least 5%, sell your position, and once you are in a loss of 4%, do the same. Also, once you get profitable in a trade, move your stop-loss just above where you would breakeven in the trade to prevent going back into the red.

Test this method out on paper and see if it helps or hurts you. It's OK to take losses; just don't let them overrun your winners. If you are 50/50 at picking your investments, this simple tip should help ensure you stay in the green.

Don't forget to follow us on Facebook and Twitter for the latest in financial market news, investment commentary and exclusive special promotions.

Source :

By Jared Levy

Jared Levy is Co-Editor of Smart Investing Daily, a free e-letter dedicated to guiding investors through the world of finance in order to make smart investing decisions. His passion is teaching the public how to successfully trade and invest while keeping risk low.

Jared has spent the past 15 years of his career in the finance and options industry, working as a retail money manager, a floor specialist for Fortune 1000 companies, and most recently a senior derivatives strategist. He was one of the Philadelphia Stock Exchange's youngest-ever members to become a market maker on three major U.S. exchanges.

He has been featured in several industry publications and won an Emmy for his daily video "Trader Cast." Jared serves as a CNBC Fast Money contributor and has appeared on Bloomberg, Fox Business, CNN Radio, Wall Street Journal radio and is regularly quoted by Reuters, The Wall Street Journal and Yahoo! Finance, among other publications.

Copyright © 2011, Taipan Publishing Group

© 2005-2019 - 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