I don't set trends. I just find out what they are and exploit them. --Dick Clark.
One of the easiest mistakes market players can make is to keep anticipating the one-day crash. I suspect more money has been lost worrying about a crash than has actually been lost in them.
It is particularly important to keep in mind that big breakdowns almost never occur as the market is hitting new highs. Big downside moves and crashes tend to occur in markets that are already struggling. Markets that are uptrending and hitting highs will hesitate and struggle at times, but they don't just suddenly reverse and go straight down. They stay sticky to the upside for a while.
The lesson is not to rush out and load up on shorts. Don't fight the trend, especially when the market is just starting to break out. The market has a strong tendency to hold up in large part due to underlying support supplied by underinvested bulls that missed some of the move and want to add long exposure.
One of the easiest mistakes market players can make is to keep anticipating the one-day crash. I suspect more money has been lost worrying about a crash than has actually been lost in them.
It is particularly important to keep in mind that big breakdowns almost never occur as the market is hitting new highs. Big downside moves and crashes tend to occur in markets that are already struggling. Markets that are uptrending and hitting highs will hesitate and struggle at times, but they don't just suddenly reverse and go straight down. They stay sticky to the upside for a while.
The lesson is not to rush out and load up on shorts. Don't fight the trend, especially when the market is just starting to break out. The market has a strong tendency to hold up in large part due to underlying support supplied by underinvested bulls that missed some of the move and want to add long exposure.
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