The $64 thousand question at this week's Forex and Options Expo in Las Vegas was "What's this market going to do?" My answer was always the same, "I really don't know. That's why we're trend followers."

One of the biggest mistakes investors make is to fix a preconceived notion in their head of what the market's going to do. This notion subconsciously interferes with their trading because it causes them to see what's in their head and not what is actually going on. If the market continues to not do what they thought it would, they rationalize the market's behavior and continue to believe it eventually will do what they thought. Many a fortune has been lost in this way.

So how does VectorVest deal with the unknown? First of all, we don't try to predict the market, but we deal with what's happening right now. For example, we analyze the market's direction with our Market Timing System and we report the results of our analysis via the Color Guard. If the Color Guard was bullish and stock prices were trending higher, we would plan to buy stocks long. If the Color Guard was bearish and stock prices were trending lower, we would not plan to buy any stocks other than Contra ETFs. We might plan to sell some stocks short, however, depending upon the severity of the downtrend.

I said "We would plan to buy stocks long or we might plan to sell some stocks short," because we wouldn't actually buy or sell any stocks until we saw what the market was actually doing at the moment we intended to make the trade. In other words, we want to make certain that prices are going in the right direction when we make our trades. Moreover, I never buy a stock that is going down in price and never sell a stock that is going up. I call this "Keeping the wind at my back."

By using the Color Guard as my guide and making certain the market is going in the direction I want, I don't have to worry about what it's going to do two or three months from now...I'm prepared to accept it, as it arrives, One Day at a Time.