Financial markets are rife with stupid homilies and if we look at the strict definition of the word homily we get – a religious discourse which is intended primarily for spiritual edification rather than doctrinal instruction. That is something designed to make you feel good rather than teach you anything. If you are in trading to feel good then you have chosen the wrong profession.
I have seen this one recently and it seems to be a favourite of brokers as a mechanism to convince people to deal more often than they should.
Bulls make money, bears make money, and pigs get slaughtered.
Below is a chart of DMP on which I have plotted simple 52-week highs what I would like to know from a broker is at which point should I not be greedy. Is it when the stock when from $6 to $12 after generating its first signal, is it when it went from $12 to $24 or from $24 to $48? Or should I bin the stupid bits of homespun wisdom and simply let the system tell me what to do?
My experience has taught me that pigs make all the money and those that are guided by the need to feel good really don’t do that well.