Once in a blue moon, the market rings a bell to let you know that a long-term trend is coming to an end. The sound of the bell is hard to recognize amidst the roar of the markets. Most people do not hear it, and only savvy traders respond to it.
You need a great deal of experience to hear the market bell, and you need a great deal of confidence to act on that signal. You need to be attentive and alert because the market rings the bell very seldom. Your ears and your mind must be open to recognize those signals. This is not a task for beginners. When you hear the sound of the market bell and act on it, it means you are becoming a serious trader.
The first time the market rang its bell in front of me I realized it only after the fact. A major money-making opportunity had slipped away, but it sensitized my ears for the future.
In 1989 I flew to Asia. The upper deck of the Boeing 747 felt clubby and comfortable. The lights went out after dinner and most passengers drifted off to sleep, but I felt keyed up on my first flight across the Pacific. I walked over to the galley and fell into a long friendly conversation with a Japan Airlines steward, a man of about 50. He told me how he grew up in poverty after the war, with little education. It took a great deal of hard work to rise to his position as the chief steward in the business class of the national airline. He was very proud of his accomplishment.
Figure 6.14 Nikkei stock Index
As we continued ...

Get The New Sell and Sell Short: How to Take Profits, Cut Losses, and Benefit from Price Declines, Expanded Second Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.