After rallying higher on Monday and Tuesday, the market basically traded flat, seeing some profit-taking here-and-there, as discussed in my article on Tuesday. We had an awesome week with many triple-digit gainers, including +180% on Wynn, +163% on VMW, +126% on FSLR, and +107% on CAT. Here are the closed trades for the week:
More and more, I’m that the problem with active traders (myself included) is that they are too active! In other words, they trade too much! High-frequency computer trading is changing the trading landscape. There’s simply too much noise intraday. I’m continuing what I started last month and slowing the trades down even more. Not only am I slowing the trades down, I’m also setting up stricter trading criteria. So, we have slower and fewer trades, but, the result is much better. This will also help to keep us more centered.
What I’m also finding is that it gives me even more free time and decreases the amount of time I’m spending watching the market. With the high-frequency trading, there are too many bogus movements. It’s actually better to just not see them to not even react to them. The high-frequency computer trading is certainly a problem, in my opinion. No wonder more and more individual investors are losing their faith in the financial markets. It’s like the big banks are trying to squeeze out pennies on a trade to make more money. What they are really squeezing out are the individual investors who might want to invest their money in the markets. Thus, not only is the volume decreasing, money going into funds is decreasing as well. Basically, by being greedy and trying to make pennies, they are killing the markets.
But, for us traders, we can take advantage of the situation (although I sincerely hope that computerized high-frequency trading will be banned). While the market maybe making high-frequency "micro"-moves, we make trades that focus on "macro"-moves. In the eye of the storm, it is quiet. So, we’ll stay centered and wait calmly for the trades to come to us.
I’ll be back tomorrow with next week’s Market Forecast.
Happy Saturday and HappyTrading! ™