Shares (Stocks)

The momentum anomaly can be found in both bull and bear markets.

Whilst I personally focus on trading the long side with momentum, it's a popular choice for discretionary traders on the short side during times of negative sentiment.

Considering global markets are at risk of a more sustained correction, or possibly even a bear market, we've introduced the Momo-50 Bear Watchlist within our Trade Long Term service.

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Bull markets make us complacent.

Be it property, stocks or commodities, investors and traders get so used to the markets going up, that they panic when things start reversing and some of their profits disappear

Yet pullbacks are inevitable. If pullbacks are not in your thinking then your investment plan is not a realistic one. In fact it is likely to be a plan fraught with danger.

However, if you design your investment plan to cope with market ups and downs, then your actions during major market pullbacks are simple. That is, do NOTHING.

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High intelligence has nothing to do with trading success. There are more important characteristics and behaviours that go towards the foundations of successful trading.

Some are obvious, others not so obvious as on the surface they appear unrelated. In today's newsletter we could outline the 'Dirty Dozen' factors that have contributed to wiping out the trading capital of many a trader.

Instead we'll focus on the 'Decisive Dozen' that, if adhered to, will assist you to trade over the longer term.

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 A nasty week in the markets last week.

After hitting new equity highs in recent months, my portfolios are now in drawdowns of between -8% and -14%.

They all remain within the realms of normal operations.

It's a reminder that trading isn't comfortable. Indeed it can get downright uncomfortable at times. If it were easy all the time then everyone would be doing it and be successful at it.

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