Why people fail to make money in bull markets...

[setravis]

The people who make the most money in a major bull market are the ones who don't pay much attention to the daily, weekly, or even monthly price fluctuations. The best course of action for most people is to keep the big picture in mind at all times, observe the short-term volatility with detached amusement, and take advantage of the periodic buying opportunities that occur when those who are influenced by the short-term swings in the market 'puke up' their shares.
We get the impression that a lot of people these days - people who are not professional stock traders - follow the hour-by-hour or even the minute-by-minute price fluctuations of the stocks they own. But by doing so these people are only increasing the probability that they will make a buy/sell decision based on an emotional reaction to a price change, that is, they are increasing the probability of failure.

Trend-following
The 'investing public' is, by nature, a trend follower. By this we mean that it typically does most of its buying after prices have already gone up a lot and ends up doing the bulk of its selling after prices have already fallen by a long way. This is, of course, the opposite of what it should do.

Peter Lynch, one of the most successful mutual fund managers of all time, has said that the majority of people who invested in his fund didn't make money even though the fund's average annual return over many years was excellent. This is because people would often buy into the fund after a period during which large returns had been achieved and then sell after the fund had experienced a brief period of poor performance.

Further to the above, all the talk during the 1990s equity bull market about the public 'buying the dips' was rubbish. Most of the publics money went into the market during those periods when prices were at their least attractive levels, for example, during the first quarter of 2000.

In a bull market, buying the dips is the right approach. It is, however, difficult to do because it involves going against the trend-following urges that are inherent in most of us. Correspondingly, waiting for prices to move substantially higher (when everything appears to be rosy) before buying is an ill-conceived approach that will result in losses, or mediocre gains at best, even in a bull market. During a secular bull market prices will continue to make higher-highs so those who prefer to buy when everything looks rosy might still be fortunate enough to get bailed out by the longer-term trend. But, the greatest gains will be achieved by those investors who have enough understanding of the big picture and enough courage to fade the periodic sharp sell-offs that happen during bull markets.

[AussieTrader]

Yes the removal of emotions from the decision making process is key. I aspire to the emotional control as below 

[setravis]

Support & Resistance.......

Trading Rule - " Pay Yourself As The Market Makes Money Available To You."

Consistently Successful Traders buy as prices approach areas of "Gathering Support" and sell as prices approach areas of "Gathering Resistance".

Knowing where "Gathering Support" and "Gathering Resistance" are located helps you to determine when to buy and when to sell, producing one successful trade after another.