Yeah, I know some of you think I’m full of it–how can I trade based on patterns alone? Well, after you see enough patterns–no matter the company, technology, market environment, people behind it, etc–you begin to realize that the stock market is all one big self-fulfilling prophecy (particularly in microcaps and smallcaps).
That’s right, people’s perception of a company’s business is much more important than a company’s actual business. Don’t let all these fun damental analysts fool you (ask them to detail their ENTIRE track record before listening to a word they say–and don’t be afraid to spit on 20-30% annual returns), Wall Street is full of BullShip!
When you break everything down, there’s little difference between Goldman Sachs and a boiler room that the SEC is so determined to shut down. They’re both trying to market investments. Sure, the quality of those investments and the trust involved differs, but everyone’s trying to sell something to someone–scum and scum alike (Sorry GS, but you know it’s true).
Similarly, there’s little difference in buying a company based on its business prospects and its chart prospects. Mind you, you’re buying/shorting a company’s stock–whose performance can be tracked by charts–not the company itself–whose performance can be tracked by earnings reports. So, as an investor, trader or market pundit, it’s fair to judge companies based solely on their charts alone.
Following this thinking, I tend to play bad companies. They might have solid business prospects (usually not), great management (rarely), big time investors (usually), but the charts are downtrending so they have been judged by a jury of their peers as bad companies. Again, I don’t care about their businesses, I care about their charts. These charts tend to have very distinctive patterns and it is these patterns that have made me millions . It’s pretty easy to place small to large bets on the probability (not possibility) that these patterns will continue. Sure, each play is a little different, but the basic patterns remain. Check it out:
Stage 1
Stage 2
Stage 3
Check out my DVD for detailed info, understand why I’m currently short MWY.
