If you want to make money in the stock market it is crucial that you trade correctly for the market you are in.
- In up trends buy long and purchase call options.
- In down trends sell short and buy put options.
- In range bound markets look for trends in something.
Use key moving averages to determine where the market is; prices in bull markets tend to stay over the 50 day simple moving average. Prices in bear markets tend to stay under the 200 day simple moving average.
Simply trading on the right side of the trend will improve your results radically. The next step is to zero in on the biggest monster stocks in up trends and the biggest dogs in down trends.
When you quit trying to be a hero and pick tops and bottoms, when you quit trying to be a contrarian so you can feel clever, and start taking what the market is giving, you will start to see your capital grow.