Psychological Stock market behavior
We discuss all important aspects of stock market
psychological behavior that is connected with our psychology.
Media
We have to consider a media that includes the news media, TV media, Internet, Financial
institution and many more. I have seen many time the stock market reacts negatively with
good news and stock market reacts positive with negative news!!!! Why so?
I found only the reason is psychology. You know suddenly that negative news becomes
positive and positive news becomes negative and stock market starts to react in reverse.
That's only due to the media. The people who are investing with big money, financial
institutions, they are controlling the media. The media specks their language and the
media is a very important factor for mass hypnotism to changes in the stock market,
psychology after all it's a people’s psychology who is working in the stock market.
The financial institutions they upgrade some stock and that start to run upward and
institutions down grade some stock that start’s to fall down. What does it mean? First,
financial institution invest big money in a particular stock and then after they upgrade
that stock and we all start to run behind that stock and we forget to take the right
time to exit and the media gives only the positive news. The institution who upgrade
that stock they have got good chance to book profit and after booking that profit they
down grade, media start negative news and you get struck, lastly you come out with a
big loss. I am not telling you not to buy that stock, but if you buy that stock book
profit before the people and media attack.
Psychological behavior of stock market
Stock market every day moves with some fixed patent, we need to identify that patent and
follow that patent. The stock market moves in five cycle that's contains three major cycle
in the same as market major trend and the two cycles go in opposite to stock market major
trend. Only it's important to find out the stock market major trend.
Important factors to consider
A) Confidence
When you are buying any stock, with great confidence and after buying you suddenly see the
market change its trend and that stock start to come down or move very little and you
start to lose confidence and you book loss. This is the common practice for all small
investors, day traders. Here you need to consider stop loss, before you buy any stock
you need to decide your stop loss. The stock market is very uncertain and if you want
to stay long in this market stop loss is a very important factor.
B) Thought
In the above instance you make that trade due to your thought, but if you are not good
in technical analysis you are just guessing or you are following somebody's tips. That's
the reason you are losing your confidence. I suggest to you before you loose any money
in stock market you always take second opinion of some technical experts. In our premium
services plan you finds how cheap it is in comparison of any loss. Our services boost
your confidence with great profit. We suggest stocks after deep technical analysis as
well as we check fundamentals and also we co-relate with the stock market trend.
C) Action
It's another important factor to book profit or loss. It's very important because if you
lose the chance, you do not take appropriate action then your profitable trade converts
into loss.
Know your weakness
I have seen most of the people comes under one bracket
- Patience
- Emotion and Excitements
- Lack of confidence
- Believe other persons Tips
- Run behind crowd
- Follow the media
- Follow the free stock services
- Didn't decide stop loss before to tread
- Lack of decision
- Over Trade size
- Delay action
- Expect that not possible
Improve your weakness
We have all ready discussed about
confidence,media,
stop loss and action. I suggest you try our premium service and see how your weakness
goes away, because we give you the stock list with stop loss and short tern target and
long term target price. Our other topics we cover in other sections.
Patience
If you lose patience there is a 100 % chance that you entered at the wrong spot. I suggest
to you any time that you feel that you are near to missing a great opportunity, don't do
anything, because this is the physiological turning point. Just stay away and watch for
the right entry point.
Emotion and Excitements
To control your emotions it is very necessary to keep your trade size limited. If you buy
in large quantity and the stock market moves as per it's nature your confidence start to
lose and lastly one emotional stage arrives where you come out and immediately the stock
market changes its trend and that stock moves up and up and up without you and you feel
real bad, like why ? Why? Why I come out? And it’s really made you made. So the important
part is to limit your trade size because you have to stay long in the stock market, you
are not working in stock market for a day/week or month. If your goal is to make big
money in the stock market then you need to stay long. Don't lose any opportunity under
Emotion and Excitements. You can open a money source with good technical analysis and
controlling all weakness.
Other factors we discuss in the next lesson.