The title sounds very outlandish and somewhat unnerving. But in reality it is about one of the most common and basic traits in our nature that in reality make us what we are, and only too often this will dictate how and why we trade the way we do, Often to our own detriment and financial hardship.
They are your own every day emotions. These emotions can be found hard at work every day in the stock market, not only when the trading floor is open but also after hours as well, for they will dictate what happens in tomorrow’s trading and how the market will then behave.
The first one is FEAR. There is a good acronym that is very apt here .False Expectations Appearing Real.
Fear can and does assume many forms. The fear of missing the boat will cause you to abandon your preset price and chase the share price upwards. Therefore you end up paying more than you originally planned for.
It is exactly that same fear that will make you hang onto a falling stock in the hope that its share price will rebound at a later date. Or a sudden large sell off in a stock is sometimes enough to trigger a panic feared sell off, which feeds upon itself causing the share prices to drop across the board, often in other unrelated stocks or sectors.
The fear of the unknown is another classic example. The Oil price rises recently have been typically affected by this. A whiff of a cyclone somewhere in the Caribbean is enough to send oil prices spiralling upwards or the possibility of lower oil stock reserves in the future is another catalyst that can and does affect the oil price.
GREED is another prevalent emotion. For example: - Having made a profit, greed makes you want to hang on for still more. Not being content with a reasonable profit we hang on till sometimes it is too late, often to see the share price recede quickly and we end up with a smaller profit than we already had in the first place.
ANGER is a dangerous emotion usually directed at the stock which is not performing as we would like it too. And we will punish the stock by selling it off. There that showed it! Now I feel better we tell ourselves.
Irrational when you look at it in the right perspective. But we do it every day.
WISHING AND HOPING is always to be found in abundance in the stock market. We are forever looking for that elusive pot of gold at the end of the rainbow.
LUCK. We believe is either good or bad depending on our current ATTITUDE.
Attitude, I will not cover today as volumes could be written on as to how attitudes can also govern your daily trading.
Another good acronym here for LUCK is: - Labouring Under Correct Knowledge.
I firmly believe that you can make some of your own luck by sticking to a preset criteria or trading plan that firmly puts the odds in your favour. Anything else that happens is a bonus.
IMPATIENCE is yet another emotion that effects our trading. We get tired of waiting for the right stock to come along which fits our trading criteria. So we bend the rules a bit rather than miss out.
We fool ourselves that we MUST be trading otherwise we will miss out on the action, rather than being patient and waiting for the right stock to come along, Which they will always do eventually, quite often when you have just tied up your funds elsewhere.
It is also impatience which makes us sell off a stock because it is not behaving the way we expect it to, or the profit level does not meet with our preconceived expectations
Does any of these occurrences sound familiar?
Is there a cure? Yes there is, but it involves detaching from and facing your emotions. This can be one of the hardest things that you will ever have to do.
It is only when you can sit back and honestly look at why and how your trading is being effected by your everyday emotions that can you gain an insight as to how the stock market is working and reacting on a daily basis.
Being aware of your emotions and the role they play is one of the first steps to successfully detaching yourself from the herd.
Secondly, is seeing in yourself the Triggers that set your emotions off that makes you react and trade the way you do.
Most importantly if you cannot be honest with yourself, then who are you kidding?
With this insider knowledge you have gained, trading patterns will begin to emerge in the trading habits of others, the reasons why the Stock market is acting like it does becomes more readily understood and predictable.
This results into a keener insight as to what is happening currently in the market place every day, everywhere.
The end result is that you have become more aware of the reigning emotions running rampant in the market and are more readily equipped to use these same forces to your financial advantage.
But it all takes honesty, work and effort. That I will leave up to you. For it is a personal quest that only you can undertake.
For me it is still an ongoing battle, but the odds are now more in my favor than they were.
The worst part of it all is that by knowing why the Emotions can and still do effect my trading, does tend to strip away a lot of my excuses I used to use when things did not work like I had planned.
Here’s to your profitable, unemotional trading
Strudy is a successful share trader on the Australian Stock Market Visit his weblog
http://www.asxnewbie.com/for more free articles and useful information
Article Source: http://www.articledashboard.com/Article/Psychological-Share-Trading./721838
Sunday, February 15, 2009
Bullet Advisory Indian Stocks-Why More is not Merrier for Markets by narendra nainani
Periodically we listen about stimulus package being declared by some or other Government round the world to create demand and boost the economy. Markets rise in anticipation of package being announced and again starts downward journey. One wonders why the markets are not obliging to the good news and keep coming down. We have to understand the behavior of the market and psychology of Traders.
Markets do not like uncertainties. Markets move on sentiments and discount the future happenings. Traders want clarity and visibility. While common man takes package announcement as positive development, traders take it with a pinch of salt. First question they ask themselves why the hell package is needed if everything was fine on the ground. They smell the ground to be slippery sooner or later. This makes traders jittery. They become skeptical and suspicious.
Next comes the new package announcement with the higher amount traders become sleepless. This confirms their belief that all is not well and become skittish. More is not merrier for markets, enough is enough but this is too much, they think and are not able to digest the booster dose. They are not sure what will unfold next and try to jump out of burning train. They know in their hearts that this slowdown is viral in nature and can spread to different sectors of the economy likes epidemic. They have an idea that the economy is like sleeping giant and takes it’s own time to wake up, this is a time consuming process .There is no point living in hope for better tomorrow if you can exit today .They do not take undue risk and stand out from herd crowd who buy in short term bounces and prefer to exit at every rise till clouds are clear. This traders’ mentality spreads amongst investors too with time and falling prices. Markets becomes listless due to lack of buying support and falls on it’s own gravitational force.
Website narendranainani.blogspot.com.
Bullet-India's top most no.1 best stockmarket advice blog,hot stocktips calls by expert technical analyst Narendra Nainani of India.Most preferred paid subscription stocktips calls website of India.Excellent success ratio of more than 90% with superb trading ideas.
M-9898162770
Website narendranainani.blogspot.com.
Article Source: http://www.articledashboard.com/Article/Bullet-Advisory-Indian-Stocks-Why-More-is-not-Merrier-for-Markets/721370
Markets do not like uncertainties. Markets move on sentiments and discount the future happenings. Traders want clarity and visibility. While common man takes package announcement as positive development, traders take it with a pinch of salt. First question they ask themselves why the hell package is needed if everything was fine on the ground. They smell the ground to be slippery sooner or later. This makes traders jittery. They become skeptical and suspicious.
Next comes the new package announcement with the higher amount traders become sleepless. This confirms their belief that all is not well and become skittish. More is not merrier for markets, enough is enough but this is too much, they think and are not able to digest the booster dose. They are not sure what will unfold next and try to jump out of burning train. They know in their hearts that this slowdown is viral in nature and can spread to different sectors of the economy likes epidemic. They have an idea that the economy is like sleeping giant and takes it’s own time to wake up, this is a time consuming process .There is no point living in hope for better tomorrow if you can exit today .They do not take undue risk and stand out from herd crowd who buy in short term bounces and prefer to exit at every rise till clouds are clear. This traders’ mentality spreads amongst investors too with time and falling prices. Markets becomes listless due to lack of buying support and falls on it’s own gravitational force.
Website narendranainani.blogspot.com.
Bullet-India's top most no.1 best stockmarket advice blog,hot stocktips calls by expert technical analyst Narendra Nainani of India.Most preferred paid subscription stocktips calls website of India.Excellent success ratio of more than 90% with superb trading ideas.
M-9898162770
Website narendranainani.blogspot.com.
Article Source: http://www.articledashboard.com/Article/Bullet-Advisory-Indian-Stocks-Why-More-is-not-Merrier-for-Markets/721370
Will The Stock Market Crash In 2009?
2008 was a disastrous year for stock markets from around the world with many seeing falls of over forty percent. The lack of available credit due to the “credit crunch” certainly took its toll as did the seemingly worldwide fall from grace in the banking sector. Unemployment rates are going through the roof and confidence in the economies of some of the major players (countries) is at an all time low, then there is the housing market, please do not get me started on the housing market, the bubble has well and truly burst there. So what about 2009? Will stock markets from around the world continue to fall or even crash again in 2009?
The fall out from the credit crunch is showing no signs of abating, in truth things seem to be getting worse. Despite a number of “recovery measures” and “bail outs” from various governments credit is still in short supply. The banks seem unwilling to lend the cash or are perhaps not in a secure enough position to lend it. Something has to give if things are going to improve.
I personally can not see a great deal of positive earnings data coming through from the major companies this year but can see a large amount of profit warnings in the offing. What would this all mean? Well only one thing I am afraid to say, heavy losses on the stock markets.
Then there is the seemingly ever-present terrorist threat. What if the United States or one of the other major Western countries was to suffer another major terrorist atrocity? Again the result would be further heavy losses for the stock markets.
All of the above does make the best of reading for those of you who are hoping that the stock markets will make some healthy gains this year; I too am hoping that I am wrong as I have some of my own hard earned cash invested within a number of equity based funds.
As a conclusion I believe that on average stock markets from around the world will lose twenty percent of their value in 2009.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including:
stuttering therapies
DVD authoring
stuttering
Article Source: http://www.articledashboard.com/Article/Will-The-Stock-Market-Crash-In-2009?/722561
The fall out from the credit crunch is showing no signs of abating, in truth things seem to be getting worse. Despite a number of “recovery measures” and “bail outs” from various governments credit is still in short supply. The banks seem unwilling to lend the cash or are perhaps not in a secure enough position to lend it. Something has to give if things are going to improve.
I personally can not see a great deal of positive earnings data coming through from the major companies this year but can see a large amount of profit warnings in the offing. What would this all mean? Well only one thing I am afraid to say, heavy losses on the stock markets.
Then there is the seemingly ever-present terrorist threat. What if the United States or one of the other major Western countries was to suffer another major terrorist atrocity? Again the result would be further heavy losses for the stock markets.
All of the above does make the best of reading for those of you who are hoping that the stock markets will make some healthy gains this year; I too am hoping that I am wrong as I have some of my own hard earned cash invested within a number of equity based funds.
As a conclusion I believe that on average stock markets from around the world will lose twenty percent of their value in 2009.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including:
stuttering therapies
DVD authoring
stuttering
Article Source: http://www.articledashboard.com/Article/Will-The-Stock-Market-Crash-In-2009?/722561
How To Form a Stock Club by Terry Detty
The investor comes in all shapes and sizes. One method of investing is to form a stock club. The members of the stock club pool a set amount of funds each month or quarter and then as a group decide which stock or fund to place their investment dollars. The members could be people you know from church, school or a chat buddy on the Internet. The stock club is made up of people from all walks of life and income levels.
Generally, the stock club are comprised of people of like means and interests. The number of members in a stock club may be as small as four and as large as 10. The important ingredient in a stock club is that all members have a voice in the decision making process.
Formation:
After your group is formed a method of handling the funds and other administrative duties should be initiated. One method is to have a rotating treasurer or secretary of the group. This stock member will handle the funds contributed by the club.
A good method of starting out on the right foot is to set forth the basic rules of the group in a letter. The rules should include how much money each member will contribute each month or quarter. How the decision on investments are made. How the members of the group will present their investment choices to the group. How is the final decision is made either by a simple majority vote or super majority.
The members can rotate the presentation of their stock picks. Each presentation should include the financial information of the company and the last three years of prices and any other material relevant to the stock.
Basic Decisions on Finance:
The stock club should open a business account with a local bank or on-line bank. The choices of how you want the club account to be named on the account is up to the members. The stock club account should be set up with at least two signatories on the account. If you want all members to have the ability to deposit and access the account that is up to you and your bank.
The next step is to locate an on-line stock brokerage account. Depending on the on-line stock account you may need to open the account in the name of one or more members. If you have a fictitious name selected for the name of your group you may need to register the name with the state or county. Try and keep this aspect simple. You are not a big investment club. Keep the entity simple. If you need assistance ask your favorite banker or lawyer.
The Meetings:
The meetings for the stock club should be organized like any formal meeting. You may all be friends and it does not need to be stiff, but the purpose of the meeting is important. Discuss any old business. Keep notes of the event. Allow each member to present their opinions in an orderly fashion.
Set aside an adequate amount of time for the presentation of a new stock opportunity. Allow all members to ask questions of the presenter and state their opinion. The final vote should be noted. Finally decide on the date of the next meeting.
The Dog Investment:
In the course of things someone may pick a real dog for an investment. The stock club should not worry about a bad choice, but as soon as it is apparent to all members that the stock is not going anywhere, sell. The group can learn from its mistakes, but it is important to move on. Set objectives for the stock club at each meeting. By continuing to set goals and objectives the stock club remains vibrant.
Winding Things Up:
At any given point the stock club may decide to dissolve the group. At this point the process of winding things up may require some formality. Closing accounts, dispersing funds to the members and the like. If a large sum of money is involved the members may decide to ask for the assistance of a tax accountant. The fee should be paid out of the funds accumulated and charged against the account before disbursements are made.
The stock club is an enjoyable way to make long lasting friendships and to make a few dollars in the process. The stock club is a means where the smallest individually can become a viable group.
Terry Detty recommends learning the Short Selling and Penny Stocks ways. It can be rewarding Short Selling .
Article Source: http://www.articledashboard.com/Article/How-To-Form-a-Stock-Club/722616
Generally, the stock club are comprised of people of like means and interests. The number of members in a stock club may be as small as four and as large as 10. The important ingredient in a stock club is that all members have a voice in the decision making process.
Formation:
After your group is formed a method of handling the funds and other administrative duties should be initiated. One method is to have a rotating treasurer or secretary of the group. This stock member will handle the funds contributed by the club.
A good method of starting out on the right foot is to set forth the basic rules of the group in a letter. The rules should include how much money each member will contribute each month or quarter. How the decision on investments are made. How the members of the group will present their investment choices to the group. How is the final decision is made either by a simple majority vote or super majority.
The members can rotate the presentation of their stock picks. Each presentation should include the financial information of the company and the last three years of prices and any other material relevant to the stock.
Basic Decisions on Finance:
The stock club should open a business account with a local bank or on-line bank. The choices of how you want the club account to be named on the account is up to the members. The stock club account should be set up with at least two signatories on the account. If you want all members to have the ability to deposit and access the account that is up to you and your bank.
The next step is to locate an on-line stock brokerage account. Depending on the on-line stock account you may need to open the account in the name of one or more members. If you have a fictitious name selected for the name of your group you may need to register the name with the state or county. Try and keep this aspect simple. You are not a big investment club. Keep the entity simple. If you need assistance ask your favorite banker or lawyer.
The Meetings:
The meetings for the stock club should be organized like any formal meeting. You may all be friends and it does not need to be stiff, but the purpose of the meeting is important. Discuss any old business. Keep notes of the event. Allow each member to present their opinions in an orderly fashion.
Set aside an adequate amount of time for the presentation of a new stock opportunity. Allow all members to ask questions of the presenter and state their opinion. The final vote should be noted. Finally decide on the date of the next meeting.
The Dog Investment:
In the course of things someone may pick a real dog for an investment. The stock club should not worry about a bad choice, but as soon as it is apparent to all members that the stock is not going anywhere, sell. The group can learn from its mistakes, but it is important to move on. Set objectives for the stock club at each meeting. By continuing to set goals and objectives the stock club remains vibrant.
Winding Things Up:
At any given point the stock club may decide to dissolve the group. At this point the process of winding things up may require some formality. Closing accounts, dispersing funds to the members and the like. If a large sum of money is involved the members may decide to ask for the assistance of a tax accountant. The fee should be paid out of the funds accumulated and charged against the account before disbursements are made.
The stock club is an enjoyable way to make long lasting friendships and to make a few dollars in the process. The stock club is a means where the smallest individually can become a viable group.
Terry Detty recommends learning the Short Selling and Penny Stocks ways. It can be rewarding Short Selling .
Article Source: http://www.articledashboard.com/Article/How-To-Form-a-Stock-Club/722616
How Will The Stock Market Perform In 2009? by blueboy
I think that the majority of people would agree that 2008 was not a good year for stock markets from around the world. What with the credit crunch and the resulting bank failures consumer and investor confidence fell to an all time low. The past is the past however, the future is what many people are looking to now even though it is without doubt important to try and learn from past mistakes.
So what will 2009 bring? How will stock markets perform? How long will the credit crunch? When will house prices start to rise again? These are the big questions of the day, questions which are very difficult to answer. For the purposes of this article I will concentrate on the stock market.
To start with I would like to write a little disclaimer! I am not a financial adviser and therefore what you read should not be seen as advice. I am just a regular guy who has a rather strange hobby; I like to study financial markets. I actually do not think that it is that strange, in fact I believe that the people who do not study these markets are the strange ones as it is effectively costing them money.
I am a person who likes to invest in these volatile financial markets, yes I agree it is quite a risky strategy however this is where serious money can be made. I firmly believe in the concept of pound cost averaging and am therefore investing regular premiums into my equity based investments.
As for 2009 I actually believe that on average the stock markets from around the world will lose 20% of their value. I am however hoping that I am wrong but I feel that there is just too much bad news still out there at the moment.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including:
stuttering
DVD authoring
stuttering therapies
Article Source: http://www.articledashboard.com/Article/How-Will-The-Stock-Market-Perform-In-2009?/723907
So what will 2009 bring? How will stock markets perform? How long will the credit crunch? When will house prices start to rise again? These are the big questions of the day, questions which are very difficult to answer. For the purposes of this article I will concentrate on the stock market.
To start with I would like to write a little disclaimer! I am not a financial adviser and therefore what you read should not be seen as advice. I am just a regular guy who has a rather strange hobby; I like to study financial markets. I actually do not think that it is that strange, in fact I believe that the people who do not study these markets are the strange ones as it is effectively costing them money.
I am a person who likes to invest in these volatile financial markets, yes I agree it is quite a risky strategy however this is where serious money can be made. I firmly believe in the concept of pound cost averaging and am therefore investing regular premiums into my equity based investments.
As for 2009 I actually believe that on average the stock markets from around the world will lose 20% of their value. I am however hoping that I am wrong but I feel that there is just too much bad news still out there at the moment.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including:
stuttering
DVD authoring
stuttering therapies
Article Source: http://www.articledashboard.com/Article/How-Will-The-Stock-Market-Perform-In-2009?/723907
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