Forex Trading |
by ForexCycle.com |
Sunday, 14 June 2009 02:46 UTC
They say if you walk the same path as others do, you reach the same
destination. People succeed enormously by doing things differently and
not by doing different things that others do.
To make money on trading, one can have many strategies. From the safe
strategy to the street smart strategy. From a long term strategy to the
short term one. From a "sheep strategy" (follow the shepherd) to the
"rebel strategy" (take a different view, backed by intelligence).
The rebel strategist is an investor who dares to think different, quite
often out of the box. He does his fundamental research. He also does
the technical analysis. He goes beyond and follows his intuition. He
trusts his intuition in doing something that the market is not doing.
He sees the half glass full when others see the half that is empty. He
sees it white when others look at the basic colors. He smells an
opportunity when others predict doom.
The power of contrarian thinking comes from the daring to be called
"stupid" by others who cannot see the brilliance of the thinking. Or
the rationale behind it. Simply because the contrarian thinker does not
follow the "trend". He would like to be the Columbus who discovered
America. Not follow the traditional routes. The contrarian thinker is
not an idiot. Simply put, he has a perspective that is actually,
The "market sentiments" may predict that a particular sector is doing
badly or expected to do badly. Or, that a particular sector is doing
good or expected to do well. Share prices of all companies in that
sector simply suffer / benefit from that perspective. Investors
normally look for "tips" to invest or disinvest that ride on these
perspectives. Not the Contrarian investor.
The Contrarian thinks differently. He is able to see the prince when
others see the frog. At bad times, people tend to believe the bad news
more than the good. Not the contrarian. He looks for opportunities that
get buried by these perspectives. Intrinsically good companies whose
market prices get depressed way beyond their true worth, weighed down
by the market perspective. The contrarian looks for such "dust covered"
stocks, picks them up and just waits for a time when the dust will
surely fly off and the stocks start shining again. He then is able to
sell these off at a huge margin. Similarly, the contrarian is also able
to take a "sell position" much before others start seeing the trend of
falling prices and makes money by bucking the trend.
Basically, the contrarian refuses to flow with the tide. He is able to
get a 35,000 feet view when others still trying to raise their heads
above the crowd. He is smart enough to profit from incorrect
assumptions made by regular investors about the intrinsic value of
companies or the long term prospects.
Welcome to the world of Uncommon Sense. To be a contrarian in a world
of conformists. AND, to benefit from it. Be a Warren Buffet. It's in