Ask Colin

What is your primary reason to buy and sell?

This may sound trite at first, but it is fundamental to good investing: I buy and sell according to my investment plan. I find buying and selling decisions easy, because I have a clear plan. If I am in doubt at any time, I don't really have to think - I just use the plan to make the decision. If I did not have a plan, I would not really know what I was trying to do. All decisions would have to be made from first principles. Decisions would be very difficult to make, inconsistent and subject to many mind traps.

There are many ways to make money in the markets. Most of them revolve around trading a trend in some timeframe or other. There are other ways to make money, but this is the main one. I have two models of the way markets unfold and my approach is to exploit uptrends in stocks that conform to these models. I buy emerging uptrends and build my position as the trend is confirmed. I also buy into existing uptrends. I sell when the trend signals it is over.

The models I exploit are already explained in detail in articles I have written for Shares magazine, in Shares Charting Guides, in my videotape/DVD seminar and in my book which is being published progressively on my website.

The actual buy and sell signals and how I determine stop-loss levels, protect-profit stops and where I take profits are all detailed in the same sources.