BUY AND HOLD IS DEAD - Sr ROSLI HUSSIN

Michael Nystrom Review of "The Complete TurtleTrader"
March 21, 2008

An excerpt from Michael Nystrom's review of "The Complete TurtleTrader":

"Buy and hold is dead! The extreme market volatility over the last decade should make this abundantly clear to even casual market watchers, but it is something that good traders have known all along: You trade securities, you don't marry them. Buying a stock is not a commitment "until death do you part." A friend once told me the story of a man he knew who worked at Worldcom during the go-go 90's and had his entire 401(k) invested in the company stock. He was waiting for his account to hit $2 million, and then he was going to cash out. It was almost there - $1.8m, $1.9m - something like that when the stock began its terminal decline. Instead of selling, he held on until the bitter end, until all was lost. Moral of the story: The market is the utlimate authority. It does not listen to you, nor care about your dreams & desires, so you had best learn to listen to it. Stories like the above are not uncommon - just ask the employees of Bear Stearns. These days buy and hold may as well be called buy and hope, which is definitely not a sound strategy. And while there are a near infinite variety of potentially successful trading strategies (as the book Market Wizards shows), some of the most successful strategies have been mechanical trend following systems. You've no doubt heard a bit about Richard Dennis, the trend trading pioneer who discussed his mid-1980's Turtles experiment in Market Wizards. Now, thanks to Michael Covel, we are lucky enough to have access to the whole story. Continue...