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What Should I Be Doing In The Stock Market?

"Every day the bull market continues, brings us one day closer to the next bear market."
Jeff Bryant, HomeTrader Trainer

"Should I be trading the long or short side of the market now?"

"Should I wait a couple of months until the market looks better?"

These are a couple of the questions my students have been asking me lately. Despite Jeff Bryant's words of wisdom above, we can’t predict the future, and Jeff would certainly be the last person to try to do so.

I can't say which side of the market to trade or whether to trade until after the event. And we can't trade the past, only the present. If we wait until we "know" what the market is doing, it will be too late.

My answer is always the same: The best time to start trading is when you have developed your [trading] system, proven that it works by backtesting it over historical data and are confident you can trade it correctly.

And the best direction to trade is to trade both sides of the market. Your long system will trade stocks that are rising and should keep you out of falling stocks if it is designed properly. Your short system will trade falling stocks and keep you out of rising stocks.

That way, it doesn't matter if the market is bullish or bearish or if different sectors are going in different directions – you will always be trading the right direction.

But that does not mean you have to start with both a long and short system if you feel that is too much to begin with. Develop, test and start trading one system in the direction you are most comfortable with.

Actually trading the system should only take a few minutes a day, which will leave you enough time to develop a system for the opposite side of the market. So it need not take very long to be in a position to trade both directions and then it won't matter whether the bull market continues or a bear market starts.

And what is the market doing? During November, the All Ordinaries rose again and recouped the losses of October and challenged the record high of September 30th, but did not break it.

Does this mean the bull market is over or is it continuing?

The answer remains: We don't know what is going to happen and we don't need to know what is going to happen if we have a tested mechanical system that dictates all our trading actions. If you don't have this yet, or if you are not confident in the system you have, go see your trading trainer and sort it ASAP.

You do have a trading trainer, don't you...?

Michael Grossbard is a trading Trainer for HomeTrader - Australia's leading stock market education centres. We focus on teaching you how to create wealth through the share/stock market using a customized trading plan or system that is right for you, your situation and your goals. Visit our website and register for your free introductory DVD "Learn To Make Money On The Stock Market" at http://www.learnshares.com.au

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