Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Learn from My U.S. Dollar Mistake

InvestorEducation / Learn to Trade Jan 31, 2015 - 05:02 PM GMT

By: DailyWealth

InvestorEducation

Dr. Steve Sjuggerud writes: "Today may be the very top in the U.S. dollar," I said on Fox Business two weeks ago.

I was wrong. I need to learn from my mistake...

If you want to get better at investing, you need to analyze your mistakes. That way, you don't make them again.


So let's take a look at what I did, and where I went wrong...

It turns out, two weeks ago was NOT the top in the dollar. Instead, the dollar has continued to "go parabolic." Take a look:

My first mistake was that you never want to fight a "parabolic" move.

Personally, I have had trouble with this one in my career... When you see an investment soar in an extreme way, the bust is often just as extreme – when it finally arrives. The trick is when that day arrives.

Parabolic moves can keep going, and going... You don't want to fight them. You can lose a lot of money, quickly, by betting against them.

My next mistake was this: You can't trade "value" or "sentiment" by themselves... Instead, you have to wait to have the trend in your favor.

Right now, sentiment on the dollar is at a record high – everyone loves the U.S. dollar. And sentiment on the euro is at record lows – everyone hates it. These sentiment extremes will change – very soon. And the way they will change will be through a stronger euro and a weaker dollar.

This should happen soon... But when? I can't know to the exact day (as I proved on Fox Business!).

It's smarter NOT to predict the exact day. Instead, you wait...

You use hindsight. When the trend has clearly changed in your favor, then you can make the trade. You might miss the first few percentage points of the move, but it is a much safer way to trade.

In the case of the dollar, I didn't have the trend yet... I just had sentiment. So I got it wrong.

As a newsletter writer, it might make for a great headline to call the top. But the reality is, you can still make plenty of money – in a much safer way – by waiting for the trend to go in your favor before making the trade.

So in summary:

1. Never fight a parabolic move
2. You can't trade value or sentiment by themselves
3. Wait for the trend to go your way before you place your trade.

Hopefully I will do these things the next time around.

I learn more from my wrong calls than I do from my right ones. I strongly suggest you analyze each trade you make, to figure out what you could have done better.

That's how you get better as an investor... so do it!

Good investing,

Steve

Editor's note: If you'd like more insight and actionable advice from Dr. Steve Sjuggerud, consider a free subscription to DailyWealth. Sign up for DailyWealth here and receive a report on the five must-read books on investing. This report will show you several of the DailyWealth team's "must read" books, which will help you become a better investor right away. Click here to learn more.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2022 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