Have We Reached the Top?

Use Redwood TradingA popular financial commentator announced recently that it is the individual investor that is beating the market right now rather than the professionals. Dennis Gartman revealed this in a television interview a couple days ago, although his reasoning doesn’t seem to be exhaustive. Still, he has a good point. With the way that markets are set up right now, and the audiences that the professionals serve, there are many more money making opportunities open up to the little guy than ever before. You no longer need to have a billion dollars to be able to make a profit in the markets, just enough to comfortably set aside so that you don’t need to dip into your market money any time soon. Once you reach this point, and have some studying and observing under your belt, making money in finance has never been easier.

This assumes that you have a firm grasp of what you’re doing, though. Trading and market predictions are not easy. You can make these things easier for you, though. Paying close attention to a few assets over time will give you a better idea of how they act and react when other things occur in the marketplace. This sort of specialization will eventually make you an expert on a few stocks or other types of assets, and you can then use that knowledge to make money. You will even find that some assets are related, such as the Dow Jones Industrial Average and the price of the U.S. dollar against foreign currencies.

Yes, a lot of experts keep saying we’re at the top of the market, and yes, it’s a scary thing to put money somewhere when everyone you trust is saying the market is going to lose value. The “experts” are very limited in their outlook, and many of them only consider the long sale of stocks. As an individual, you have tools that professionals do not. You can switch from stocks to currencies. You can use short sale of stocks, or other down trading tools such as put options and binary options. A lot of the pros look at things from the point of view of a mutual fund manager, and these people have very few tools at their disposal. The markets will go up and down over time, but now that things like down trading and short term trading, and even micro trading, are readily available, there’s no reason why you need to be limited to this point of view. If you want to trade $100 worth of the euro against the British pound sterling, you can do so and make a profit. It might not be the same as if you bought $100,000 worth of Apple stock, but you can still turn a profit, and over time a lot of small profits become huge amounts money in your wallet.

It’s confusing when some experts say it’s time to sell, and others say that no, you definitely need to keep buying. Don’t let this distract you. Yes, these experts have a worthwhile opinion, but you know your style of trading better than they do and you know what tools and limits you have to work with. You are not under the same constraints as most experts and you shouldn’t let a little nay saying keep you from making money when you see a clear chance to do so. Focusing on small, short trades can help turn things in your favor, and today there are many tools to help you do so, especially within the Forex and binary options markets. It all depends upon what your background and level of comfort is with your trading.