We all have our own thoughts on strategy and how to trade stocks, exchange traded funds (ETFs), bonds and other investment tools.  Some work better than others, but, at the end of the day, which one is right?

You guessed it: The one that generates the highest return on investment.  Many believe that watching the markets and predicting movements is a guessing game.  One one hand, it kind of is, states Lance Beggs of Trade2Win.  He says this because traders try to “guess” which way the markets will move without having sufficient information.

On the other hand, great traders spend a lot of time assuming risk in profits, performing skillful analysis, watching trends or other indicators, listening to current news and doing an extensive amount of homework.  But still there are many who believe that trading the markets is merely a guessing and gambling game – particularly Beggs’ nine-year-old daughter, whose comment about “guessing” sparked his introspective journey.

The fact of the matter is that no amount of analysis, homework or knowledge will predict the future.  For this reason, we suggest that all winning strategies have both exit plans and buying plans, watch trendlines and are well diversified.  Additionally, we suggest you keep emotions and your gut feelings from playing a role in your decisions.  Remember, you don’t always have to be playing the market if it isn’t under your terms, sometimes the sidelines are the place to be.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.