How do you buy stocks…

…when the market seems so  volatile and unstable? There is a lot of pessimism in the markets right now and while I see the obvious head and shoulder pattern that is staring everybody in the face right now that is the obvious play right now.  When the market opened up big today I was rather certain that this was the start of a multi-day rally and chose to hold onto my long positions, only to see 75% of those gains disappear by the close. It’s easy to 2nd guess yourself “should I have sold half, or just taken the gains completely?” But what if the market consolidated mid-day and then road into higher ground? Then you would be out of your position and kicking yourself for having sold at the first sign of a gain. You then would be waiting for a pullback that probably wouldn’t have come to buy your stocks back.

It’s thoughts like these that destroy a traders confidence and should be discarded the moment you think them.You will neversell at the top so don’t even bother trying. Even trimming the positions on such a small move wouldn’t have been the smartest strategy in my opinion. My market timing system is very oversold right now and actually moved a tick more in the bullish camp EOD (end of day). I believe today the market was trying to shake the bulls out of their positions.

I’m not going to post a chart now because nothing has really changed and I don’t want to micro-analyze every single move. I chose to hold onto my long positions and at this time and I’m only buying ETF’s because individual stocks are too risky as there are so many factors that could cause an individual stock to collapse (earnings, macro-economic, insider scams). My positions are slightly in the green and it’s an uncomfortable trade. My mental stops are in, but even those are subject to change depending on a number of things. I’ll tweet any changes in my holdings, either after hours tonight or tomorrow intra-day.

I’d rather be here mulling over my decisions in the markets…My friends pic from Hawaii.