The Market Can Stay Irrational Longer Than You Can Stay Solvent
Now why is that? Perhaps because people love buying the dips and selling the peaks... and that's how people make money.
Buy & Short non-stop doesn't help the direction of where something needs to go... because it messes up the charts in the short-term. (Weekly and current month
However, you can only mess up the charts and be irrational for a few months before the obvious long term trend starts to become visibly noticeable.
Solution? If you are a conservative investor... and you have long term belief in something... .buy now. Don't look at it again for an entire year, and often you will be right.
@scaredycatguide -- would you agree this makes sense, what I just said? If not, please correct. I don't want to give bad advice. :)
- Don't try to time the market (see #4 at this link)
- The Market Can Stay Irrational Longer Than You Can Stay Solvent (See link)
Two good lessons.
Thank you very much for this post @scaredycatguide!!
There is something to be said for time frame analysis, which kind of goes along with what you are saying. In the end the larger time frame dominates. Thus, yes. Just getting in and looking a year later can make sense if you are buying the direction of the larger trend.
However, I believe you can improve the entry by working your way down the time frame scale. If the monthly chart is an uptrend and the weekly chart is an uptrend and so is the daily chart, but the hourly is not. Well, that is possibly an opportunity to buy a little lower so long as the weekly, monthly and daily trend are still intact.