There are two kinds of share being traded the most at the moment. They are the banks and mining shares. Though that old favourite Vodaphone is still high on the list.

These facts suggest to me that people still play the favourites game. They get locked onto shares, which they have always traded, and they do it, no matter what the prevailing circumstances.

I would not trade bank shares at the moment. Not in the short term – buying one day, selling the next. They are simply not moving up fast enough. Yet they are falling quite heavily at any slight shake in confidence.

This means that drops of 7-10 per cent are quite common among banks, while rises come in lowlier figures. So why are people still buying and selling bank shares more than most other stocks? I think its habit.

Now professional traders – the big shakers- are not governed by habit. I would hope not, anyway. Habit is a killer in the share game. Buying a certain stock because youre used to trading in that stock is not a good reason to buy it.

There is a famous share book called the Zulu Principal. This advocated buying and selling shares you knew well, because you already hold the knowledge of these particular shares and so should make the correct buy and sell decisions at the right time.

Well, theres nothing wrong with that strategy. But using knowledge and buying your old favourites is not the same thing. Use your knowledge of the share not to buy the share, sometimes. Dont get logged into an old mind-set.

The story is always changing in Crazyland, and you must keep your eye on the ball. Old favourites which did well for you once, may have a completely different management, or may be now producing something people no longer want. Dont get stuck in a trading rut. Keep up to date. Rock on.