INTRODUCTION
Having been trading stocks and options in the capital markets professionally over the years, I have seen many ups and downs.
I have seen paupers become millionaires overnight
And
I have seen millionaires become paupers overnight
One story told to me by my mentor is still etched in my mind:
Once, there were two Wall Street stock market multi-millionaires. Both were extremely successful and decided to share their insights with others by selling their stock market forecasts in newsletters. Each charged US$10,000 for their opinions. One trader was so curious to know their views that he spent all of his $20,000 savings to buy both their opinions. His friends were naturally excited about what the two masters had to say about the stock markets direction. When they asked their friend, he was fuming mad. Confused, they asked their friend about his anger. He said, One said BULLISH and the other said BEARISH!
The point of this illustration is that it was the trader who was wrong. In todays stock and option market, people can have different opinions of future market direction and still profit. The differences lay in the stock...