I just wanted to quote one of my emails from 5 months ago.

“I think it’s pretty much official, or it is in my eyes, we’re in a bear market. This may come as no surprise for many system traders (like myself) and here’s why…

Having already identified the conditions I’d like a security to exhibit for me to consider trading it, I have programmed this into Meta Stock. Then, using the explorer function, I am able to identify only those securities exhibiting my criteria.

Here’s what I noticed…

Over the past 3-4 months the number of stocks making it through my filtering process has decreased 5 fold. In fact, around 2 months, ago my system wasn’t returning any trading opportunities at all.

So you know what I did?

I followed my system and didn’t open any new trades. Furthermore, almost all of my positions were also stopped out. The result being: I wasn’t in the market when the proverbial ‘shit hit the fan’.

The lesson to be learned here is that when you system tells you to stay out of the market – stay out of the market! Don’t follow the urge to always be trading, remembering sometimes it’s smarter to sit on the sidelines.”

I echoed these thoughts recently when I was extensively quoted recently in the Australian Financial Review – Wednesday 24th Sept 2008 (article below).

Of course, for more savvy traders, these times represent a fantastic opportunity to trade the short side of the market. Remember, trend traders are not concerned if the market moves up or down – they’re simply looking for a trend… and the market is definitely trending at the moment!

Personally, with my current schedule, I haven’t been able to do any short term aggressive trading – it requires too much of my time.

That said, just for fun, I did run a scan for my short system to see what would happen and wouldn’t you know it… my short trading system is currently identifying loads of shorting opportunities.

Am I missing out one these opportunities?

‘yes’ but I know better than to trade a system that doesn’t fit my current time availability. Remember you must design a trading system that suits you!

I’d love to hear how your trading is going – please comment below.

Your business/trading philosopher,

David Jenyns

Ps. I recorded a presentation Stuart was running for the Australian Stock Report and posted it for you to check out here: www.onlinetradingmastermind.com