The Day that Was - August 30th 2007

Winners don't get excited and emotional. They get rich.

Each day the mood of the market keeps changing. One day it is down huge, the next day up huge. And then today it is clueless again. How do you trade that kind of move? You can't.

In a normal bull market a 240 point gain in the DOW would be a healthy indication of a rally. In our market it is nothing more than a sign of confusion. Normally a large gain would be followed with increased money flow into the markets as it would have signaled a sign of growing strength. But today we had no strength, instead we had more confusion and emotionally driven moves. When emotion overtakes reason in the market then there is no safe place to be except on the sidelines. You can not swing trade in a market that does not know from day to day where it is going. Swing trading in this can lead to financial suicide. There is no shame in waiting on the sidelines for the best reward to risk profile to present itself.

Some people are by nature risk takers. Some people thrive on excitement and the prospects of 'making a kill'. And that is fine, in some aspects being adventurous is a healthy aspect because it means you are not one to just let other people control your life or your finances. You desire to be in control of your own destiny and that is a good trait. But that same enthusiasm and desire to control ones own destiny has to be balanced with reason and logic in order for that enthusiasm to be profitable.

The reason for creating RebelTraders was to share the concept of taking control of ones own financial future. To differentiate ourselves from the 'institutional' ways of thinking and to provide stock market trading ideas based on a combination of analysis techniques. Additionally, RebelTraders sets forth a winning attitude by educating our readers about such things as market direction, preservation of capital, risk to reward profiles, chart analysis, etc.. It is only through the combination of ALL of these aspects of the markets can you win on a consistent basis. If you use your drive and ambition to control your own destiny without balancing it with logic and reason then you will fail. It is that simple. The headline of this post says it all and it says it loudly. The ones that make good money investing and trading in the markets year after year are the ones that control their emotions and let logic dictate their actions.

We did not take any swing trades today because logic says that it is not the right time. Why take on a swing trade when there may be significant market moving news tomorrow from Ben Bernanke which could create another sell off. Unless your related to Ben and you know what he will say tomorrow then why take the chance. Your risk is higher than your reward. A smart (and profitable) trader knows when the odds are in his or her favor. To jump into a trade for the sake of just taking a chance may provide you a win, and it may provide you a loss. But if you do this time and time again your end result will be a net loss.

RebelTraders is here to provide you stock trading ideas but we are also here to keep your money in YOUR wallet and not in the markets wallet. Being a financial winner is much more than just finding the right stock from time to time, it is also knowing when to NOT trade. We will not tell you to take on swing trades when the risk outweighs the reward potential. Anyone that tells you to swing trade in this directionless market is being reckless with YOUR money. We won't do that. RebelTraders wants you to win in the long term, not just for one day here and there.