In the final analysis it doesn't matter who is right, but 'what is right'.

No matter which sector, and no matter the current stage of a particular market sector, there will always be bulls and there will always be bears.

Because so many traders and investors are guided by their emotions, the short and medium term trends in any sector will, to a large extent, be determined by the percentage of bullish advisors, versus bearish analysts. The challenge that lies before us is to reduce the 'noise' that emanates from the markets. This 'noise' includes: the 'talking heads' on TV., the many articles that are written pro or con a particular stock sector, it even includes the 'stock tip' from your next door neighbor.

The starting point is to develop a trading system. There are numerous systems out there, and the best one is the one that works for you.

To start a system from scratch, it is advisable to take a little trading wisdom from this person and add a little contribution from someone else. Write these rules down, begin to obey them, and read them daily until they are bolted down within your mind.

A similar method is to copy someone else's system, and gradually modify it to suit your personality.

After every trade you should ask yourself:

• Why did I get into this trade?
• Did I follow my rules?
• Am I happy with this trade?
• If not, what must I do differently next time?

The starting point for any investment is to look for a sector that has been dormant, and is coming to life, or one that has come to life and is expected to stay lively long enough for you to be able to profit from. Then look for a stock within this sector that represents value. There must be assets that justify the current stock price. Look for management that can increase the value of these assets. Good management will be reflected in the percentage of shares that are owned by insiders. Build up a file of analysts who have recommended stocks in the past that have prospered.

The goal must be to filter all of your trades through your system, so that you can eliminate your emotions, and trade purely on your skills.

Successful investors combine fundamental analysis with technical analysis. It is important to learn how to read a stock chart. Is this stock moving up, down, or sideways? Are the Moving Averages rising or falling? Is the Relative Strength Index supporting the move, or is it giving off a non-confirming signal?

Print out a chart, take a ruler and draw in the support line and resistance line, to help you determine where to get in and where to take a profit.

The following chart (courtesy www.stockcharts.com), shows where to place these trend-lines. The result is often a 'channel'. Many stocks and commodities can be fitted into such channels, and these are useful in helping to determine entry and exit points.

Technical analysis helps you to buy just above the support line, and take full or partial profits near the resistance line. Support lines are also helpful in determining where to place a protective sell stop. They can also be used to determine the rate of ascent of any stock, by dividing the price at the end of the month by the price at the beginning. In the above example, price at the end of June was 0.68, and at the beginning of June it was 0.60, thus price is currently moving up by about 13% per month, (0.68/0.60 = 1.13 or +13%).

To find the website of any stock, I recommend www.google.com and type in the name of the company. (The website for Abcourt Mines, featured in the above chart is www.abcourt.com )

Many traders and investors make use of the 200 day moving average, (red line on the above chart). They will buy at, or just below, the 200DMA and sell when price gets too far above the 200DMA. There is no need to wonder why people use the '200', the important thing is to make use of 'what works'. Some stocks correct as soon as they are 10% above the 200D, others make wide swings of 100% or more. Each stock has its own 'heartbeat', and it behooves us to get in synch with this heartbeat, in order to maximize our profits.

From experience I have found that the best way to trade stocks is on-line. It provides direct access to the markets, thus by-passing the broker and the commission rates are the lowest possible.

Plan your trades during the period when the markets are closed. This also helps to shut out the 'noise'. If you are a morning person, plan your moves early, if you are a night owl, do it in the evening.

When you have planned your moves, you have the option of placing your order before the market opens, or during market hours. I use both options. For slow moving stocks I will use 'good till cancelled' buy orders placed at the low end of the trading range, or sell orders at the spot where I would like to be taken out.

I try to avoid 'piling on' to existing quotes that show up on my trading screen. If I am interested in buying 500 shares of XYZ at the current bid price, and the number of lots that are wanted at the bid price, as shown on the screen, exceeds the number of lots offered for sale, I will either place my bid just below the current bid price, and adjust it later, or I will jump just ahead of the bid, by the smallest increment allowed. I use the same method when selling. If I see that there are 100 lots of XYZ for sale at 9.00, and 50 lots are bid at 8.85 it does not make sense to 'pile on' at 9.00. I realize that brokers can see at least 10 bids on either side of the trade, but individual traders can be scared off by lopsided buy-sell situations, and I am interested in buying at the lowest price possible and selling at the highest price obtainable.

In the event that the reader is not familiar with some of the terminology used in articles and in mining reports, I have prepared an E-mail entitled; "Explaining the Terminology". This message is available upon request, at no charge.

To sharpen your trading skills I highly recommend registering at www.marketocracy.com and opening a 'cyber account'. There is no charge, and the experience is well worth the time spent there.

Finally, here are some trading rules that are part of my own trading system, and may be helpful as you build your own system of rules.

• Determine the main trend, and trade within this trend.
• The best method for buying stocks is to divide your capital for a particular stock into portions. Buy, and then add on later, if you were right.
• Buy only stocks that have been recommended by people you trust. People who have a proven track record.
• A stock with a rising 200DMA has a greater chance of rising than a stock with a descending 200DMA.
• Look for stocks that are going through a distribution phase, with prices that are moving sideways in a narrow range, volume is down, …watch for a pickup in volume during an upside breakout.
• Use protective sell stops on long positions, buy stops on short positions. Make use of trend lines and area's of congestion, to position your stops. This method allows you to determine the amount of risk you are accepting with each trade. As a rule of thumb, never risk more than 33% of your capital in any given stock. This way your retain 66% with which to recover, in the event that you lose the 33%. Ideally a stop should be about 20% below your point of entry, but this will vary from trader to trader.
• Lose the trade, but don't lose the lesson. You can learn a lot more from your bad trades than from your good trades.
• Learn to stay with your winning trade. To quote the successful Jesse Livermore: "It was never my thinking that made the big money for me, it was always the sitting".
• Avoid 'bottom picking' and 'top picking'. Leave the first 20%, as well as the last 20% to others, and settle for the 60% in the middle.
• Don't chase a stock. There is always another train coming down the track.

There are many other good rules, but the above will be a good start to a successful trading/investing system.

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DISCLAIMER:
Please do your own due diligence. I am NOT responsible for your trading decisions.