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In
today's high tech world, everybody is a stock trader. It
hardly matters what profession you come from, everyone
is playing the stock market. A few years ago, many
individuals didn't know anything about investing in
stocks, nor did they know anything about the companies
whose stock they have been trading.
Our research shows a large segment of today's stock
market speculators are short term. When we say short
term, we show an average holding time for these 'short
term' traders to be a little over 62 days. The volume in
the stock market over the past few years indicates that
stocks are changing hands at a rapid pace and apparently
back and forth. This form of investing is not the
traditional buy and hold methodology, but more closely
resembles characteristics similar to derivative
speculating, an art which has historically been left to
the futures traders.
Stock options contribute to the new short-term way of
thinking and appear to have transformed the way smaller
investors approach the stock market. Sure enough, in our
research we have found a distinction between two groups
of investors, the older generation and the new. The
older generations stick to the buy and hold methodology,
while the younger investors are aggressively jumping in
and out of stocks and using the derivative instruments
to speculate on the short-term direction of individual
stocks. As you might have guessed, the younger
generation has not done as well as the older generation
who consistently buys and holds. In fact, contrary to
what these younger investors might imply, they have not
faired that well in today's stock market. The fact is,
most short-term stock market speculators have lost money
trading and are in the red.
Are you short term or longer term? Making money
consistently by trading stocks on a short-term basis is
impossible according to our studies. There are simply
far too many unknown variables in the short term trading
that cannot be predicted. So the question is... Can you
make money CONSISTENTLY investing on a short-term basis?
The answer is yes, but not by trading individual stocks.
Historical data indicates it is possible using another
form of investment vehicles. The commodity markets. The
commodity futures markets exhibit repeating patterns and
an underlying order, which can be tracked and traded
successfully on a very short-term basis. In commodities,
it does not matter if prices are going up or down
because you can profit from both sides! The commodity
markets offer an opportunity for short-term traders to
consistently profit on relatively short-term
fluctuations. |
