Lesson For Investors – Wisdom From The Bubbling Ocean

The Bubbling Ocean

The bubbling ocean tide gives us another idea to changes: when it recedes, it continues until a mark is made where it does not go further down the ocean bed and when it begins to extend outward it will continue to cover the shore submerging available lands. It is one of the best typology for describing investment.

When an investment instrument begins to gain value, it will continue non-stopping until it hits a mark where the value cannot grow further, and then it will begin to come down to another mark. How you get to know this is when a new high mark of the instrument does not measure up to a former high in recent time. If you have observed the ocean movement, it is sometime difficult to know when the ocean begins to enlarge or shrink its coverage except you have a mark of the previous high or low point.

Another example to understanding the master key for your unlocking of investment riddles is to know the characteristics of the masses. A people and group of people will continue to do one thing which becomes a vogue – everybody subscribe to it as the in thing, and it will be like an everlasting idea, but along the line a new deviation will gradually create a new but reversed trait.

The idea is that everything changes in life but through considerable order – not in a state of random confusion.

The immediate above idea leads to another deeper concept: the fewer the people involved in a change process the easier it is to counter their effect, but the larger the number of people involved the more difficult it is to create a reverse change. And this infers that any change that takes effect on a very large group will continue for a very long time, and if this change is countered, the new deviation will be very strong that it will be difficult to return the society or people to her former state.

The economy is central to the existence of the people, organizations, states, nations and the world. And capital investment is the stake of any economy. By implication when we talk about investment, we are talking about the entire configuration of man – because man’s total behaviour affects the outlook of the economy.

This basically infers that the people create what we call trend, and the trend though so commonly talked about has not been given considerable thought by people who really want to make money as investors: it is the magic key to unlocking investment bullion if rightly applied.

Every activity of man whether locally or internationally all help to create the trends of diverse form which altogether comes to affect investment volume for every instrument.

We can view trend as it relates to why certain currency, companies and stocks are more traded than the other, and why certain apartments in certain quarters of the city sell higher; it is all about trend created by man. Trend could also be seen at what trading time of the days, weeks, months that we do have significant market volume, and each with various characteristics. Certain government’s activities, labour actions, and many other factors come together to give us what we call trend. The bottom line is that people makes the trend.

We are in a world of change as reflected through various activities of man. As long as we are active beings of choice, there will always be changes, it is this changes that makes for various trends in the diverse sectors of the human society. For the investor, this helps you to know that there is no trend that is permanent; the trend will always change.

There will always be changes, and when it comes you need to find out the strength. Change is like the ocean, when you move against it current it may sweep you away. The bottom line is learning to follow, and using an advance investor’s language – learn to manage the trend; because you may not have to follow every trend, but you must learn to manage every trend in the market so as to sail profitably just as the swimmer may have to do with the flow of the current. But when it is turbulent run for your dear life!

Like the ocean, if you are keen enough, trend does not change by surprise, it always comes with clue for the very observant person.

The importance of understanding the trend of the market is the pivot to profitable investment. For emphasis sake, I will repeat it over and over: the trend is the fulcrum – the basis for any meaningful investment. Trend is also associated with the formation of supports and resistance regions of investment. If you do not gain anything from this discussion remember this.

The deeper truth about the trend is here: larger number of people create longer term trend in the market. The longer the time frame the more people are involved in sustaining the trend and the more difficult it will take to reverse the trend. Fewer people create shorter term trend in the market. The shorter the time frame, the fewer the people that sustains the trend and it is much easier to reverse the shorter time trend.

The great idea is to learn to identify the different trends in every market place. This means that both the short and long term frame are important to an experience investor. A long term trader without a cue of the shorter time frame is inviting trouble. Worst is a short term trader that losses focus of the longer time frame – because it is confirmed observation that the shorter trend often bowed down to the longer trend. Larger group of people often influence the direction of action of fewer people – the trend is a game of people.

Trends in a shorter time frame will often give way to trends on the higher time frame. Failure to understand this is one of the reasons why many traders believe investment to be a gambling game. Investment is beyond speculation; it is a science with predictable outcome.

Another view I want you to take is to understand the relationship between time and trend. The longer the time frame the more perfect (certain) a trend tend to be and the shorter the time frame, the less perfect (uncertain) is its trend when it formed. The reason for the information is to help you be on the lookout for longer term trend and join it early through the help of a shorter time frame.

Trading shorter or longer term exclusive of one another is the path to investment mediocrity. The magic to investment miracle is learning how to combine the longer and shorter time frame for your trading decision, and when the trend has changed, you have no business being in the market; even if you are addicted to trading on long term. Investment is a game of trend.

If you will become a great investor, you primary responsibility is to be a detector of new trend whether in business purchase, stock, foreign exchange or real estate – you must have your indicators right that helps you do exactly this – finding a new trend because this is where the unmistaken profit lies. The reason for this is that new trends are more reliable to follow -the older a trend is the more careful one need to be in joining. It is becoming no use joining an investment trend which every Dick and Harry knows about – every Dick and Harry are the bandwagon who always join an investment instrument like a herd of cow; and no sooner they join that depreciation sets in and leading to another crash of investment value. What they do is to push the market value of an investment far above its true value, and no sooner they find out this that they will all begin to jump out of the trend; and this causes devaluation of an investment. This is the need for the experience investor to always seek for new trends and have the courage to join early.

Smart, this is the end of my class with you – as this is the sum of the principle needed. What you might have need of is getting the right indicators and components that will help you identify the exhaustion of one trend and changing to a new trend, thereby helping you to gain early entry into the market. This should not be a problem to you, but if you still have problem in this respect, call on me – the sage is always available for all true investors; the teacher will always be available for the ready student.

Finally, with all I have taught you, I want you to build a profitable system suitable for you – have your personality right, understand the five basic rules to starting out as an investor, then build a profitable system with your understanding of what a trend is. It may take time but learn all it takes by yourself, and in time to come when the chips are down and the majority of investors are lost as to what to do your personal experience will count.

I hope to see you as one of the rare investors of all time. And when you need me always call. Bye.

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