As we move ourselves towards the successful combination of simplicity and conviction the probabilities skyrocket and the positive mindset grows.
The Stockradar strategy does not focus on the why, but rather the fact that it is (going up).
The stock market is always one step ahead, of what we think is one step ahead. Known facts, realities and perceptions are always getting built into prices and we should be aware of that.
Remember the stock market does have a crystal ball into the future and since 2009 the Nasdaq has made some fancy gains.
Greed and Fear drive the somewhat irrational excesses and this current ‘price over reason’ behaviour is blowing many minds.
Investing is a mind game. How do you control the emotions such as paralysis, fear and doubt that swirl about in our heads?
Our brain is a tireless and emotional ‘worker’ but it is also smart enough to make us aware that we need to be able control those emotions to be a consistent, vigilant, controlled investor and ultimately a profitable one.
Take the bull by the horns have faith in your system and the ride the waves with confidence.
The reality is human psychology drives stock price trends and we often see the power of our imaginations do amazing things, regardless of reality.
The miracle of thought
Our imagination can take us anywhere. The psychology of human behaviour that drives share prices is often a source of wonder. It’s challenging, its intriguing, it’s fascinating and its fun. No, not fundamentals, not news, not rumours but the psychology of how we perceive the myriad of complex variables.
The most interesting aspect of price movement is that which we cannot value. That is the blue sky of imagined possibilities. Don’t be left in the dark wondering why. Take the price at face value and follow it is the best advice I can give you.
The price force we all try to understand,and we are usually dealt a quick lesson on how price behaves when we start trading. You know, the company delivers a great result and the price goes down. My initiation was when the bombs started going off in IRAQ in 1991 when the US invaded, I was well set in the gold market and feeling confident as it climbed steadily on expectations and when shots we’re fired gold plummeted. Ugh! My learning curve, buy the rumour, sell the fact.
You rarely make the same mistake twiceand are quick to understand one aspect of price psychology and that is one of expectations, and if your curious you will want to learn more about the advantage of understanding the price action, what drives it, how it behaves and most importantly, how to profit from it. Read, trade, and learn.
They occur all the time as prices exceed perceived fundamental valuationor in some cases trades well below it. Fundamental valuation is a marker to be exceeded or undershot for reasons of sentiment. Rarely do prices trade at ‘fundamental value’. So, overvaluation is driven by sentiment (as is undervaluation) and as humans go, in the right situation, they will believe anything can happen. We have endless examples of big momentum power moves of stocks and markets, and the reverse is true in some situations like the GFC.
Sentiment is a powerful force.The advantage price analysts have is that they follow human behaviour and are not pegged to the fundamental ‘value’. This frees us up to take advantage of the repeated excesses in markets, human behaviour, and price action. Excesses are opportunities and reflect momentum moves driven by human behaviour. They are valuing the invaluable and no-one can put a price on that.
It’s the crowd behaviour that gets us going and to a certain extent price can become almost irrelevant under these situations. The irrational crowd behaviour ‘scramble’ is a wonder for us all to see but there lies the big opportunity. It can also be dangerous I know as inevitably prices will correct but having a good awareness and when managed appropriately with the right discipline, they are opportunities that can be turned into profits.
These effects are history repeating itself, yes, but that history is driven by human behaviour and we all know we are creatures of habit. The price trend being the most common and oft occurring behaviour we can take advantage of. Price analysis is not about predicting the future it is about observing, identifying and following human behaviour that repeats itself.
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