Secrets for Profiting in Bull and Bear Markets

Secrets begin with Weinstein’s philosophy of investing. The rule number one is consistency.

Don’t be a fundamentalist one week, and a technician the next. And don’t follow indicator A one month and switch to indicator B the next. Find a good method, be disciplined, and stick with it. If it doesn’t regularly beat the market, then get a new method. But be absolutely disciplined and don’t ever abandon a successful method because you think this time things are different.¹

He continues with explaining why he thinks technical analysis is the most appropriate method to use while investing:

You must learn that the market is a discounting mechanism, and that stocks sell on future and not current fundamentals. I therefore use a technical approach that deciphers the market’s interpretation of all of the currently known news as well as future expectations. Don’t be thrown off by the fancy name. All that technical analysis really consists of is the study of price and volume relationships to gain an insight into future trends.²

He then states the principles any trader should follow:

1. Never buy or sell a stock without checking the chart.
2. Never buy a stock when good news comes out, especially if the chart shows a significant advance prior to the news release.
3. Never buy a stock because it appears cheap after getting smashed. When it sells off further, you’ll find out that cheap can become far cheaper!
4. Never buy a stock in a downtrend on the chart (…)
5. Never hold a stock that is in a downtrend no matter how low the price/earnings ratio. Many weeks later and several points lower, you’ll find out why the stock was going down.
6. Always be consistent. If you find that you’re sometimes buying, sometimes selling in practically identical situations, then there is something terribly wrong with your discipline.³

After such an introduction he moves on to explain in detail his technique of beating the market.

Although I read numerous books on trading before, Weinstein’s Secrets resonated with me the most. One of the reasons might be that I read the book after having much more experience in trading. On the other hand Weinstein’s technique is so meticulously laid out that it’s really easy to comprehend. Especially when compared to real world examples – not only presented by Weinstein in the book – but by looking on the real-life charts yourself.

Highly recommended!

Tomek Gola / TradeYourPlan