Why I Follow the Trend

I follow the market trend for the exact reason why my feelings, intuitions, and other "analysis" of the economy and market conditions are often contrary to market direction. Market always acts to baffle and confuse investors. What it seems may not always be what it is and when it is blatently obvious to an investor it may be too late. I think this is why so many investors lose money in the stock market and defer to professional money managers or mutual funds after a period of trying to beat the system.

The market is a forward looking beast. So, the numbers relating to economy is old news and has no relevance in most cases to the market action in the long run.

I am a momentum trader and mostly trade on the "long" side. My holdings can last a few days to few months but I never hold anything as a "long term" investment. The times that I have rationalized being a long term investor was when I lost money. I will stick to what I am good at.

As for my skepticism of the market, it continues. I have to remain disciplined and not give into my fears. I know that a lot of retail and professional money managers are on the sidelines waiting for that "BIG" decline based on our weak economic numbers. But market is a contrarian beast. It never does what you want it to do. So I take this opportunity and ride the momentum. It is scary but it is right because it is disciplined.