Hi Trader,

Welcome to Part Five of your free Stock Market Trading Mini Course:

“What The Wall Street Hot Shots Won’t Tell You!”

Part 5 - “Take control! Make money quickly and safely by doing what others don’t.

Ever tried using the ‘buy and hold’ strategy? You have!

Are you a millionaire yet? Perhaps not!

Why Buy and Hold Doesn’t Work.

At this point we need to make a clear distinction.

In this course we are talking about stock market trading not stock market investing. The fundamental difference is the time frame and the degree of active involvement.

The investor’s approach is generally long term and they are prepared to hold onto stock despite short-term reversals.

A trader on the other hand is someone who buys and sells stocks and derivatives on a regular basis with the aim of profiting from short-term price movements.

Their perspective is short to medium term and they are concerned about the opportunity cost involved in having their funds tied up in stocks that aren’t performing.

They also use different types of strategies so have greater flexibility. Both approaches can be successful.

Our point of view is that trading provides greater opportunity for profit and ironically greater risk control.

One aspect of a typical investor’s approach is the strategy known as buy and hold.

Essentially this involves holding onto stocks through thick and thin on the basis that over the long haul they are expected to increase in value.

This approach has two fundamental problems.

The first is that stocks move both up and down.

If you simply buy stocks you can only profit if they increase in value.

Successful traders have strategies to trade both sides of the market. So whether prices rise or fall, they can make a profit.

More fundamentally, if you simply hold onto stocks, there is no guarantee they will increase in value.

No matter how long you hold onto them. Even if you choose so called good stocks this is no promise of success. Indeed, this approach can be very dangerous, even devastating.

For example, Juniper Networks stock price was over $240 in October 2000 but two years later it had dropped to just over $4. 20

Even more catastrophic is the situation where a company goes belly up.

Enron and WorldCom in the United States and HIH in Australia are recent examples of this happening.

Lots of investors lost an awful lot of money on these stocks and others like them. You can see that simply holding onto stocks can be very risky.

But we will show you how, if you know what you are doing, trading can be a relatively low risk approach.

So how did buy and hold become such an unquestioned piece of received wisdom? Like just about any strategy, it worked when the market was going up.

Stocks rose for such a long time that the buy and hold concept seemed flawless. But Stock prices can and do drop suddenly.

Buy and hold is really just buy and hope.

So stock market trading is our preferred strategy and the one we will explain in this course.

But there are two key issues you need to appreciate about this approach.

The first one is time.

Trading is more active than investing and so requires a greater time commitment.

Depending on your style of trading this can vary from a few hours a week to several hours a day. And some strategies require you to be involved in the market when it is open, whilst other methods can be managed out of hours.

Our course covers a range of trading systems that can suit your time frame.

The other issue is your mental attitude.

Trading requires a different mindset to investing.

It is not a set and forget approach.

You need to actively manage your trades and be prepared to act quickly when the situation changes.

You also need to learn how to lose.

But more about this in our StockMarket Genie(TM) Trading Course.

That’s it for this issue of “What The Wall Street Hot Shots Won’t Tell You!”, I hope you have found something that is of help to you.

If you have anything you want to see covered in this course please don’t hesitate to email us at the address below.

Keep a look out in your inbox for part 6 of this course which covers: The Big Three - the secrets you must have to get the results we get. .

This free course is brought to you by the StockMarket Genie(TM) Trading System.

“Ordinary People Making Extraordinary Profits”

Regards David Chandler www.StockMarketGenie.com/Course support@stockmarketgenie.com

PS Is that special offer still there? Go here now: www.stockmarketgenie.com/insiders

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Remember, we are not providing you with financial advice. We are simply sharing with you what has and hasn’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Regards

David Chandler StockMarket Genie StockMarket Genie 43 May Road Torbay AUSTRALIA 6330