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There are a number of problems with systems for buying and selling positions in your portfolio. And I’ve never seen a system that didn’t fall to pieces in strange economic times, which is every trading day as far as I can tell. Here’s what wrong with trading systems: Trading systems are designed by humans. The system creator determines buy and sell parameters based on built in, often unrecognized, bias. Any system designed by a human has an organic bias – a bias to buy or sell at certain points in share price movement, a bias toward a particular sector or a belief that your system is bias neutral, in which case you’re an automaton and should seek medical help. Trading systems are template-based. The system is the template and stocks are purchased, not necessarily on their merits, but on the need to fill a “slot” in the template. Trading systems employ buy and sell points. The professional, self-directed trader defines the system’s parameters, specifically when to buy and when to sell. Unfortunately, this mechanized trading doesn’t allow for market anomalies, i.e. the quick drive-up and subsequent retrenching of per barrel oil prices. In this case, your system pulled you out early as you watched the price increase another 30% in a matter of a couple of weeks. Systems remove the human element of intuition and, frankly, I’d rather be lucky than good. Trading Systems Encourage Modeling. Modeling is used by professional traders to test various buy and sell strategies, aka, systems. Now, you won’t hear this from companies and on-line services that offer modeling software, but wake up – modeling doesn’t work. Why? Modeling doesn’t work because it’s based on information and metrics that have already occurred. Modeling looks back at old data, and yes, I do believe that past performance is one of the best indicators of future performance, but I use this criterion as only one of many in evaluating a potential buy or sell. Modeling almost always leads to erroneous assumptions and faulty logic. Don’t get me wrong. I play around with modeling software. It’s fun. You can take wild risks without losing any real money. But as a tool for making buy and sell decisions, modeling is a dangerous practice even for the professionals – and we’ve all seen how wrong they can be. Please check in to the Confident Trader Portfolio to see how we’re doing. I think this is a good time to move capital into small growth stocks which have outperformed blue chips all year long as they do nearly every year. Watching our portfolio is nice but don’t you think owning it would be even better? To make sure you’re on the train before it leaves the station all that’s required is a Confident Trader membership (this can be started for less than 20 bucks!) which among other things brings you our monthly Confident Trader stock letter that features in each addition several stocks poised for phenomenal growth. The truth is, if you know how to pick stocks you will always make money regardless of broad market conditions because there are always companies taking off. Think about it. When was the last time you owned a stock that appreciated 200%, or 400%, or 600%, or 800%, or more? As you can see, it happens pretty regularly for Confident Trader members, even in bear markets! Picking the right stocks makes you money. Learning how to do it yourself, while making money, brings you financial independence. Hmmmmmmm, Make money and become financially independent. Or, lose money and spin your wheels as time passes you by. Try it for six months, just six months. You’ll be glad you did. http://www.confidenttrader.com/register.html Happy trading, 
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