I am a Trend Follower

I am bias towards the downside in the near term, more so for the US market.  Hence I am staying in the sidelines, being patient, and looking for shorting opportunities.

I get the question many times "Is the market going up or down?"  Although I am now bias towards the downside, I really do not know the answer.  That is why, now, I am a trend follower.

One of the biggest mistakes that I have made is having a pre-conceived ideas of where the market is going to go.  This inadvertently interfered with my decision making, which caused me to subconciously try to rationalize the market's behavior and continue to believe the market will go my way.

If the current market were to go up, I must be prepared to buy stocks at a higher price, if it goes down further, I might sell stocks short, at a lower price.  In other words, as a trend follower, I must never buy a stock that is going down in price and never sell a stock that is going up in price.  This way of thinking goes against my natural inclination.  However, trend following keeps the wind blowing at my back.  Losses are expected in the short term.  $ is expected in the long term.

Lets not try to predict the market.  Wait for the market to trend higher, before buying stocks.  If the market becomes bearish, the plan will be to hold, or sell short, depending on the severity of the down trend.