As we enter the New Year short term traders will be well served by a well thought out plan of action. First, one can play the news, so to speak. That is, work to anticipate the news and stock moves of the day. Then use your trading system to make a profit from the action in the market. The second choice is to anticipate which sections of the market will prosper during the coming years. Again the short term trader will use his or her system to take a short term profit from market moves. However, with more profitable sectors, moves will hopefully be predictable thus allowing the short term trader who does his/her homework to execute more winning trades.
Where the Action Will Be and Where the Profit Will Be
There is a lot of chaos in the world of the short term trader these days. The short term trader who is able to anticipate the moves of the market will win. As governmental agencies promise another infusion of capital into another failed section of the economy, the market will jump up and down. The short term trader who sticks to a system and does not succumb to doubt and fear will stand a chance of making a profit.
In this article we suggest a modified approach to trading in the forthcoming year. Look to see what the macroeconomic picture will be. Where will money be spent and what will people continue to buy even in bad economic times?
Both long term investors and short term traders will be well served to look at three areas. These are US infrastructure improvements, pharmaceutical research, and basic consumer goods.
Typical recession investment advice is to flee to banks and basic consumer goods. Banks are off that list for this recession. However, everyone needs toothpaste, toilet paper, and razor blades. The short term trader will be well served to think in terms of the long term investor. The strong sectors during this recession may be less chaotic and that means, perhaps, also be more predictable. If one sticks to a system and limits trading to sectors where there is more stability, then the potential for repeated measurable profit may increase.
Short Term Trading Associated with United States Infrastructure
The new administration has promised to pour money into roads, bridges, and other US infrastructure in order to maintain competitiveness and especially to create jobs. This mega-project will provide the short term trader with multiple opportunities to cash in on the success of companies like Caterpillar or the United States steel and cement industries.
Short Term Trading in Pharmaceutical Research
The Obama administration has promised to take the restrictions off of stem cell research. Look for a reinvigoration of genetic research and more opportunities for the short term trader in this arena. From diabetes cures to joint cures without replacements to treatments for Alzheimer?s disease, stem cells may be the answer. Whether someone finds an answer or not, the area will likely be hot and a great opportunity for the short term trader.
The Short Term Trader and Basic Consumer Goods
Companies such as Proctor and Gamble tend to do well in most economic times. People always need and buy basic consumer necessities. As this sort of company exploits all of the niches of its markets, the short term trader may find repeated opportunity for profit on the up-side. Whether the short term trader deals in infrastructure, pharmaceuticals, or basic consumer items, the market fluctuations promise to be a bit more predictable and therefore porfitable.
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