Often many novice traders are anxious to take a trade. Therefore, when the market is up strongly the novice usually looks to buy a stock that is weak on the day. The opposite should be done. On the flip side we see many novice traders looking to short(sell) strong stocks on a weak day. Again, the opposite should be done.
When the lion in the jungle is stalking his prey he does not go after the healthy adult zebra. The lion goes after the wounded zebra or the baby. He is looking to increase his odds of a meal when he is hunting. The same mentality needs to be understood for a trader or investor. As a trader if the market is weak on the day a trader should look to stocks that are weak already. The same rules would be reversed for a strong market. Never short a strong stock because if the market reverses that stock is more likely to catch a very strong bid and vice versa for a weak market.
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