An Approach to Taming This Market Beast

In a pursuit where intellect is prized, it's easy to outsmart one's self. We strain ourselves to find that one key piece of information that might make all the difference, while the market behaves like an emotional beast. This temperamental creature has no rationale, its joy knows no bounds, and its fear knows no depths. It takes us along on its impulsive ride.

Until recently, many U.S. traders behaved as if slowing growth and the European crisis were none of our concern, but the charts told a different story. I responded by shorting the banking sector and the S&P 500, and I'm still in those trades. In both cases, I used inverted ETFs (the Direxion Daily Financial Bear 3X (FAZ) and the ProShares Short S&P 500 (SH)), which can be used to establish a bearish stance without the need to actually sell short. These act as a hedge against my long positions, and they are designed to minimize damage if this market truly grows ugly....420 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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