Which Strategies Are Worth The Effort To Learn Them?

6/9/2015

Yesterday I received an email from one of our subscribers at InvestorsHELP.net who asked this question:

"Hi Joe, Are you willing to share your thoughts on which of the various and many strategies that are out there are worth the effort necessary to learn them? I ask because I'm beginning to feel awash in information and would like some input from a person with a wide perspective like yourself.
Thanks for considering this request,
Vance R."

Since I am frequently asked questions of this nature, I thought that it would be helpful to many of our newer traders and investors to provide my thoughts in response to Vance's question here on my blog. You may or may not agree with my comments and also may have additional helpful comments to offer here at this blog for our consideration. So feel free to comment, but let's keep it helpful and informative so that we can all learn together.

Vance, thank you for your question. Unfortunately, there is no easy answer since there are so many variables that must be considered in order to find what is right for you. I believe that in order to answer this broad question, you must focus first on yourself to give you clues regarding what is best for you and what specific must be considered when selecting the right strategy (ies) for you. You will also discover during you trading and investing career, that you will change your strategies as circumstances in your life changes. More about that later.

What do I mean: "Focus first on yourself?" In 1983 when I first started studying technical analysis, I had to ask myself some questions to help me decide on what are the best strategies for me to implement at that time. Unfortunately, since I was new to trading and investing, I had no idea as to which questions I should ask myself! Perhaps you too are in the same boat at this time? Unfortunately, when you are new, you really don't know what questions to ask yourself so that you can generate profits in the markets. [Does this remind you of "unknown-unknowns?"]

Fortunately at that time I found some excellent mentors by attending various investment clubs here in Northern California. Back in the 1980's, we did not yet have "Meetup groups" that are now available throughout the USA. These groups are an excellent source of information for the newer trader and investor. I especially like the "Investor Business Daily (IBD) Meetup Groups for learning the specific CAN SLIM system of investing. Check it out by going to Google and typing "IBD Meetup Groups."

Sorry for getting off on a tangent...too much information to share:-) Maybe I need to write an ebook for you guys?

Back to "Focus first on yourself." Because it is getting late and I am not sure if anyone other than Vance is interested in this subject, tonight I am going to focus on these 3 questions:

1. How much money do you have to invest (willing to lose) as you learn about investing and trading? We all pay for our education, whether it is college, a trade school, or learning to trade and invest in the markets. Even if you study for years, when you begin making live (not demo) trades, there will be a period of losses. I don't want to discourage you, but it happens. From my own experience and also from many of my friends, perhaps the most difficult is trading emini futures contracts and options on futures. I have found that it is very difficult to be consistently profitable trading futures. You are competing directly against the very best and most experienced traders in the world. Trade here at your own risk!

2. How much "screen time" do you have available during the day to be available at your computer to follow the markets? The answer to this question will once again limit the types of strategies that you can successfully follow. [To be continued...]

3. The third question that you should ask yourself is "how much effort are you willing to apply on a daily and weekly basis to learn how to trade and invest to become successful in the markets. This is a key question because it will you determine if you are going to follow a more simplified strategy that requires little or limited education, versus a complex option strategy that requires a lot more education especially when it comes to "adjusting' options, etc. [To be continued... ]

The more that I get into this subject, the more that I can see that it cannot be answered in only a few minutes. So, I am going to leave it up to you. Where do you want to go from here???

If you want more information on this subject so that you too can take action to select a trading or an investing strategy that is best for you, please leave your comments or send me an email: [[email protected]] and tell me what you think.

Time to call it a day, looking forward to hearing from you,

Joe Gruender Jr.

Trader_Joe

2 Comments

Vance Regan link

6/16/2015 04:42:41 am

Hi Joe,
Thanks for such a terrific response to my question! As a fairly experienced investor what I'm focusing on is strategies that center on momentum and relative strength.
I like Michael Carr's writings (his "Smarter Investing" book for example) and want to be able to check weekly and make changes as needed to keep the top performing ETF's in a section of my portfolio.It appears that things on your site might fit these ideas -- can you give me your opinions regarding Sectorsurfer and any other relevant approaches?
Thanks,
Vance

Joe Gruender link

7/12/2015 02:30:08 pm

Hi Vance, sorry that I missed your request and thanks for asking me again. I have not read Michael Carr's writings, so cannot comment on his "Smart Investing" book. Sorry. It is important to note that SectorSurfer will make "calls or changes" only once per month. Therefore, if you want to make changes weekly, SS will not meet your needs. I do not know of a specific system or service that reviews the price action of ETFs on a weekly basis. IBD does use weekly charts and has analysis based on weekly data, however, they do not use or analyze ETFs. They prefer individual stocks. What some people do is to take 5 or 10 ETFs, plot the close of the selected ETFs all on a single price chart using the "comparison" feature or indicator, look at them weekly, and move their money into the top performing ETF for the next week. It is important to plot these on a "percentage" basis and not on a price basis. In this way you are always in the momentum leader. Final thought: to me making a change, moving from one ETF to another based solely on a date, such as once per week, is not as good as making a change based on price, an indicator or set of indicators. In other words, wait for price or your indicator to tell you to get in or not, not get in or out just because it is a particular day of the week. Could talk for hours, but need to wrap this up. Hope this helps. Thanks for visiting InvestingHELP.net. Joe

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