What would you expect DOW jones index range?

Question

Dow is now 11600...What do you think rest of year its range?? below 11000, 10000, or above 12000

Answer 1

Raj, to be honest: Predicting the Dow for the end of the year is like throwing a dart.

Most traders would be happy if they could predict the Dow movement for a couple of minutes or a couple of hours.

I assume you're asking this question because you need this information for your investment decisions.

Keep it simple:

1.) Buy when the market is going up and sell when the market is going down. I know that this sounds very simple, but many investors do not follow this simple advice. They fall for concepts like "Dollar Cost Averaging" where you actually BUY a stock even though it is falling! You only make money if you own a stock and it is going up. When it is going sideways, or maybe even going down, get out and invest in another stock. Every day there are stocks that go up!

2.) Know when to exit. Most traders stay too long in the market. Either they fail to take profits or they let their losses run too far. Both mistakes can be disastrous. You should know when to exit a trade even before you enter it. As soon as you are in a trade, place a stop loss order and a profit taking order. Good traders use a stop loss, great traders use a profit target!

3.) Trade the right stock, and the right stock is the one that is going up. Easier said that done, right? Use simple filters and determine stocks that bounced back from an absolute or relative bottom. Do not try to pick bottoms or tops - it's next to impossible. But if you look for stocks that went down or sideways and are now moving up, then you have a chance to catch a small move. Don't be greedy: You can make 25% per year by making 5% on five different stocks. And believe me: It's easier to make 5% on a stock than 25%.

How do you eat an elephant? - One bite at a time!

First learn to identify the direction of a stock, THEN learn when to exit a stock and THEN try to come up with a good filter to find the right stock. Don't try to do everything at once.

Trading is not easy, but it can be simple. Don't make it more complicated than it is. Plan your education, and take one step at a time. Learn something new every day, and you will be amazed how much you can learn in month.

Good luck!