"The hot sectors for this decade (and probably the next) are oil, oil services, metals, China, Latin America and commodities.
These are the sectors sucking in and spitting out the big cash. Fortunes are being made in these sectors on both the long and short side." Floyd: I can believe "hot sectors" for the next month, but cannot predict in any way longer term what a "hot sector is"
So instead of playing all 46 sectors, I've narrowed down my focus to just five equity sectors plus commodities. In each of these sectors, I've become extremely familiar with the trading patterns of the winners and losers in each group.
Now That You're Focused, it's Time to NARROW That Focus
Floyd: This is straight out of Richard D. Wyckoff, the famed trader of the 1920's that my Dad trained under.These were times for no ETF's or mutual funds, but the theory is the same:
"Become an expert at NO more than a total of 50 stocks, and never hold more than a few positions. Do NOT study other stocks, do not read about them, do not care about them. Chart, study, and learn from a "position sheet" you create of the 50 stocks you are going to study, and become an expert in this.As an example, I have bought and sold Apple (AAPL) since it went public, have traded options and the stock itself, and would anticipate I have traded this position alone over 500 times during that time period. I KNOW Apple, and I am an expert by years of studying just this, and my other core position stocks".
To narrow my focus even further, I chose just one ETF from each group and have become an expert in how each representative ETF trades. Within my five favorite ETFs in the equity sector, I've further narrowed my focus to two to three stocks in each group. So from a global list of 12,000 stocks, I have now gone down to a very manageable list of five ETFs and 10 to 15 of their component stocks.
The moves in these stocks and ETFs are amazing. I mean, it's really incredible -- just in the China sector alone, we've seen 100% moves in some of the ETFs!
So, it pays to specialize -- in fact, it pays very well. Because just as quickly as the markets take them up, they tear them down.
When you start specializing by sector, you gain massive clarity and focus. This clarity provides tremendous confidence as you catch these securities on the way up and short them on the way down.
So, my message this week is to narrow your focus. Get clear about where you want to "spend" your mental focus and energy. Refine your approach to just a few sectors and a few big, liquid, volatile stocks in each of those sectors and begin to get a feel for how they trade. Do the same for the ETFs that cover those sectors as well.
Start to simplify your investment and trading choices.
Floyd: He's very right here and Premium Subscribers to our www.bluechiptoptions.com service receive the core of the Wyckoff study that is the core of how I trade stocks and options, "without noise", and always being an expert in the same subjects.
Quoted from: Teeka Tiwari
http://tycoonreport.tycoonresearch.com/articles/778021757/easy-ways-to-boost-your-profits-part
