Get to Know Tom Bowley
Get to Know Tom Bowley
It's important to put things in perspective. My background as a CPA really
shapes who I am in the stock market. While in public accounting, I handled the
Accounting and Auditing area of a large regional CPA firm in the Washington DC
Metropolitan area. I was responsible for several large audit clients in the
manufacturing, service and banking areas. I understand the fundamentals of
companies and how they drive valuations. Auditing banks was particularly useful
in my current position as Chief Market Strategist because it enabled me to
understand certain intermarket relationships like the tight positive correlation
between the performance of banks and the performance of the S&P 500.
I often tell folks that "I never met a spreadsheet that I didn't like," and it's
really quite true. I'm a numbers geek. I take nothing for granted when it comes
to the stock market. If something doesn't make sense to me, I ignore it.
I take that same basic approach to teaching. I don't expect anyone to "take my
word for it". I explain everything in detail. You can then make an educated
decision on whether to use that information or ignore it. I think the best
example of this is with regard to the Bowley Trend. I've studied historical
trends in the S&P 500 over the past six decades and have discovered what I
believe are extremely valuable and reliable trends that can help us make money
in the future. History does, in my opinion, repeat itself in the stock market.
But whether you decide to use this information is your call.
mostly a self-taught technician. I've done it the old-fashioned way - by losing
money and LEARNING from my mistakes! One of my goals is to teach fellow traders
and investors many of the things I've learned over the years, helping them avoid
those same mistakes and helping them save money. I've been very fortunate to
have the privilege to
write for StockCharts.com since 2006, helping to educate readers from around
the globe. One of the featured contributors in the biweekly StockCharts
ChartWatchers newsletter is world-renowned author John Murphy. Much of John's
writings, especially as they relate to intermarket analysis, has really helped
to mold me and how I view the stock market. I view writing alongside John and
the other technically-savvy contributors at StockCharts.com to be an honor.
Trading the Invested Central Way
There are a few critical components to successfully trading the stock market.
They are as follows:
Harness Your Emotions
First and foremost, you MUST have the proper mindset. Trading is an imperfect
science. You will be wrong on many occasions so being able to admit mistakes
quickly ("don't be wrong for long") is one of the traits of a seasoned trading
veteran. You must approach every single trade with a plan. Know why you're
taking a position. Know what your target is. Know what your line in the sand is
if the trade works against you and GET OUT if your stop is violated.
Manage Your Risk
This involves a couple things. First, decide how much of your portfolio you are
willing to lose on a trade. Then, based on your entry point and your stop level,
you can figure out your position size. But risk also involves evaluating the
overall market to determine its sustainability, either up or down. I believe
it's important to trade WITH the trend, increasing your opportunities for
success. Using intermarket indications, trends can be evaluated for their
likelihood of continuance or "sustainability".
Patience and Discipline
This one cannot be overstated. There are thousands of stocks on our major
indices. By evaluating the overall market and using structured scanning
techniques, it's very easy to find trading candidates that fit your risk
profile. Allow stocks to come to you. Avoid chasing stocks. By exercising
patience, you will not only avoid unnecessary and expensive losses, you will
also develop a very important habit of buying stocks at levels where you can
minimize risk. I cannot overstate how important it is to minimize losses on
losing trades. Sometimes, the best decision to sell results in a loss -- a small
Understand the role of the Market Maker
It amazes me how many folks risk thousands of dollars of capital and have no
idea what a market maker does. These are the "middle men" that match buyers and
sellers and capture the spread as profit. Many years ago, these spreads were
quite large and accounted for much of a market makers profit. However, on most
stocks today, the spread is one penny. Higher volumes help to offset the
narrower spreads, but market makers now rely on TRADING profits more than ever.
They compete against you and me with one very distinct advantage. They see order
Goldman Sachs (who owns a market making unit) CEO Lloyd Blankfein said in early
2010 that their market making unit made over $100 million dollars on 35 of 63
trading days in its most recent quarter. He went on to say that they made at
least $25 million on EVERY trading day that quarter. Let me simplify our goal at
Invested Central by stating the obvious -- WE WANT TO TRADE ALONGSIDE MARKET
MAKERS BECAUSE THEY MAKE MONEY IN ALL MARKETS.
I can teach you how money can be made trading stocks. I can teach you how to
find high reward to risk trades. I can show you how to improve your current
trading results. But the rest is up to you. You have to show the willingness to
learn, to exercise discipline and to keep your emotions in check.
service is designed to educate first and foremost. It will help you develop
the skills necessary to succeed. You'll experience that education the very first
time you come into our noon chat -- I guarantee it!
One of my favorite features of our service is the quarterly Diamond stock picks
that I select. CLICK HERE to read more on this exclusive feature at Invested
I want to offer you a
FREE 15-Day Trial
to our Diamond service to help you with all of the above. I believe you'll
become a smarter trader. Join the thousands of other traders from around the
globe that have become better stock market traders.
I look forward to seeing you!
Chief Market Strategist
Read a sample of Tom's latest daily market analysis
Check out the performance of Tom's Diamond Picks