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What is a BEST trade?

This is from this book I am currently reading " Market Wizards: Interviews With Top Traders " U can find this book here.

It talks about what's the component for a best trade.

1) Fundamentals
2) Technicals
3) Market Tone.

All this 3 must be present. Firstly, the fundamentals should suggest there is a imbalance between supply and demand, which could result in a major move. Secondly, technicals which is the chart must suggest that the market is moving in the direction the fundamentals are suggesting. Thirdly, when news comes out, the market must react in a way that reflects the right psychological tone. For example a bull market should shrug off bad news and react vigorously to good news.

Lets look at the above 3 conditions and examine our current market situation.

1) Fundamentals suggest that world economy are not going to be as doing as well as past 2 years for sure. Tightening of credit conditions means that less money is going to be following around. Much less flowing into equities...

2) Obviously chart and prices are at 52-week and all time lows....

3) Stocks gap up maybe 1-4% on good news and gaps down like 10-20% on bad news.

Conclusion? Its a bear market......This wasn't too hard to figure out yea?

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