How do you make decisions regarding your trade? According to Dr. Alexander Elder in his book “Trading for a living”, a successful trader must think independently. He needs to be strong enough to analyze the market alone and carry out his trading decisions. Sounds simple huh… Maybe not for everyone. Most people are sucked into the crowd and start to behave alike. The crowd behaves in a predictable manner because their actions at many times are repetitive and primitive. So, if you are able to think independently and make wise decisions, you will be able to take money away from crowd members.
However, there is one very important and crucial point to remember. Although I said that we should be independent in our decision making and we should not go against the crowd. As I have mentioned in my previous posts, the price of stocks are determined by their supply and demand. These two factors are directly determined by the crowd. If the crowd suddenly increases their demand for a particular stock, the supply will be short and the price will rise. The demand may be unjustified or may seem ridiculous to you, but you should not be going against it. The crowd may be stupid, but they are the most powerful force that will determine your gain or loss. They are the one that will determine the trend, so you can either tag along, or you stand aside.. Do not attempt to go against it. For example, you do not buy on a downtrend and you try not to sell in the middle of an uptrend. The more you are able to manipulate the behaviour of the crowd, the more successful you will be in the stock market.
So be independent without going against the crowd.
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2 comments:
Ride with trend, the crowd is right most of the time and only wrong ocassionaly.Monitor it closely go against the trend only when the conditions favour u.
Their Standard reply - "You buy, sell or hold at your own risk absolutely."
Then the say "Never blame others for your own action."
I still caution everyone
BEWARE _ BE CAREFUL _ YOU MAY THINK THE INFORMATION HERE IS INFORMATIVE AND CAN MAKE YOU MONEY _ DON'T.
MANY SUCH BLOGS HAVE MADE PEOPLE POORER>
MAXFORCE - AND BURSAMASTER - THE SAME. READ THEIR CALLS IN BURSAMASTER's BLOG.
THEY CALL FOR A BUY AFTER THEY HAVE BOUGHT SO THAT YOU CAN HELP TO PUSH UP THE PRICE FOR THEM> THEY HARDLY EVER TELL YOU WHEN TO SELL UNLESS THEY WANT YOU TO SELL BACK TO THEM AT LOW PRICES > DO YOU KNOW WHY? BECAUSE WHILE YOU ARE BUYING THEY ARE SELLING> AFTER THAT WHEN PRICE COMES DOWN< THEY SAID MARKET CORRECTION-HEALTHY OR "OPERATOR" COLLECTING AND THE PUSH WILL COME SOON>
TYPICAL TRICKS.
SO BE CAREFUL BE WARY OF MAXFORCE
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