Investing


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Bull Market

Firstly the bull is a buyer and the bear is “always” a seller. The bull buys because he wants to make money, (don’t we all?). In a “bull market” novice traders rush into every reasonable opportunity they can afford. These trades are not based on good management or risk control.
Please try not to get caught up in this market hype. If you start to chase prices upwards there is a very good chance you will pay too much for them, only to watch the share price start to recede when the buying panic is over.

A bull market tends to be associated with increasing investor confidence, motivating investors to buy in anticipation of further capital gains. In describing financial market behaviour, the largest group of market participants is often referred to, as a herd. This is especially relevant to participants in bull markets since bulls are herding animals. A bull market is also described as a bull run.

Bear market

The bear is more complicated and can sell for different reasons. This can be just to lock in a profit because he thinks the share price is about to go down. The most fearful of the bears sets the lowest price for the day. This is done by offering to sell his shares at this level.

A bear market tends to be accompanied by widespread pessimism. Investors anticipating further losses are motivated to sell, with negative sentiment feeding on itself in a vicious circle. Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time. By one common definition, a bear market is marked by a price decline of 20% or more in a key stock market index from a recent peak over at least a two-month period. However, no consensual definition of a bear market exists to clearly differentiate a primary market trend from a secondary market trend.

hourglass.jpgMore than any other factor, it is the primary, or underlying, direction of the stock market that will determine the success or failure of a trading position. A stock can have a fabulous story, great fundamentals, a good technical position, strong sponsorship and yet turn into a bad trade if you are going long and the market is headed down. The same is true of an undistinguished stock that just goes up because it is being carried along in a strong up market. Stock Market Timing is a Stock Market direction system that forecasts the future short term direction of the market.

Isn’t it a smart play to cash in your stocks and ride out a down market? You can preserve your capital and jump back in when stocks begin moving up again. As logical as that strategy sounds, it is fraught with peril for most investors. There are several problems with “playing it safe” by cashing out and you may, in fact, create additional risks in doing so.

The first problem is knowing for sure that the market is turning bearish and not just in a temporary bad mood. A prolonged downturn doesn’t announce itself with great clarity. If you are wrong and the market shakes the blues and rebounds, you’ll be stuck on the sidelines buying back in to rising prices. You sold because prices were dropping and now you’re buying back in to rising prices.

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Make the Stock Market crash work for you Losing money never feels good, but keep your cool and you can boost long-term returns.

Last Tuesday The Dow Jones Industrial Average had its biggest one day point drop in around six years on surging volume at the New York Stock Exchange. In this single trading session, all of the market’s gains year-to-date were taken back and actually turned negative. Don’t panic! It takes nerves of steel to shake off a stock drop like the one that came Tuesday – even conservative index-fund investors are more than 3 percent poorer. But the world’s best investors not only shake them off – they thrive on them.

They know sell-offs are common, perfectly normal, and even healthy. When stocks go way up in a hurry, their prices become unrealistically high. Only by falling occasionally (and even sharply) in the short run can stocks continue to rise in the long run – without the agony of today’s drop, the ecstasy of tomorrow’s good returns becomes impossible. If ever there’s been a good time to panic, that had to be it. But as the old saying goes, things are darkest before the dawn. If you’d sold out of stocks at the end of a depression, you would have missed the returns that followed.

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Stock Market The financial media constantly reports about momentum stocks that are achieving tremendous gains during the same day. And even when you can see online investors that make $5000 on a single trade, it is also not unusual to watch beginner stock investors lose a great deal of money because of a series of unwise decisions.We all know that in the stock market is always possible to watch certain stocks go up more than 100% within a few hours to days. This is especially true in the 4th quarter of the year where the buying frenzy starts in Wall Street.

The financial media constantly reports about momentum stocks that are achieving tremendous gains during the same day. And even when you can see online investors that make $5000 on a single trade, it is also not unusual to watch beginner stock investors lose a great deal of money because of a series of unwise decisions.The problem is that if you don’t know how to pick among stocks & how to properly approach them you could end up wasting dollars instead of making your wallet happy. You can’t just trade stocks like if you where gambling.

The first step in becoming a profitable trader is to start learning how to pick and trade stocks. There are many “ultimate” trading systems out there, but you need to test them in order to discover which ones help you the most. That’s part of your homework as a stock trader. Test several strategies and then test them again until you are able to produce consistent winnings.

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