Just 30 years ago the stock market was a shadow of what it is today. There were many fewer shareholders and the daily volume was a fraction of what it is at present. No one thought you would every be able to trade a billion or more shares in one day. Of course that was in the old days when they had tickers and the word digital was something you did with your fingers.
Now we have world markets. There seems to be a stock exchange in almost every country. Did you know there is a stock exchange (of sorts) in Baghdad? I have not heard if they are back in business now that the war is over.
It is kind of amazing that with all these new traders and with all the varied stocks in every part of the globe that market mechanics would have changed. They have not.
As a technical analyst and trader (I was an exchange member and floor trader for 17 years) I still see the same trading patterns I saw 30 years ago. Wouldn't you think with this tremendous expansion that something would be different? It isn't. Why?
The reason is very simple. People don't change. The basics of the market ? fear and greed ? still dominate. Emotions have not differed in thousands of years. As far back as recorded history people have reacted in almost the same way.
The emotions of traders can be plotted and you can see it in the charts that are printed out each day to show the price action of the market. Once an upward trend sets in people begin to buy, putting the market higher attracting more buyers until the greater fool application has run its course.
In the years I have been trading I have seen many new technical indicators. When you think about it almost all of them are based on the emotions of the mass of investors, even such simple indicators as moving averages. As a continuing student of the market I have studied and have used many of them. I don't know any successful investor who does not use them.
A broker or financial planner who does know understand and use these indicators is doomed to failure. If anyone in the financial field every says they don't work you can be sure he is a loser because he has not taken the time to learn his trade. He is worse than a carpenter who does not know how to use a hammer and saw.
A good technician can go to any exchange in the world, not know the language and still make money.
Stock charts are like EKGs that doctors read to see how your heart is doing. Some doctors can understand them and other have not learned.
The basic principles of trading have not changed over the years even though the market is many times larger than it was because people have not changed. Whether you invest on your local exchange or globally everything remains the same.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
http://www.mutualfundmagic.com; 1-888-345-7870
expert residential cleaners Arlington Heights ...How can you dispel an illusion unless you look directly... Read More
I feel that an investment strategy in the stock market... Read More
There are formulas for just about everything, but it has... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
What are you thinking when it comes to your no... Read More
Question: How does it get better when it gets worse?Last... Read More
I mean it when I say that. While plastic silverware... Read More
There is a famous cliff on the ocean in Acapulco... Read More
Most stock traders know that momentum trading can be a... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
Now where have I heard that before? I know. It... Read More
Over the past few months, several investment professionals have brought... Read More
What! Me worry?Many of you remember the cover of MAD... Read More
The Surgeon General of the United States says that smoking... Read More
"There is nothing more frightful than ignorance in action!" Johann... Read More
When it comes to mutual funds, there is a lot... Read More
As the man said, "I've got some good news and... Read More
Who are the successful investors?There are those who follow the... Read More
Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More
Let's hope you did not have any of the Enron... Read More
I cringe every time I hear a novice investor tell... Read More
On November 17 I bought 7 different mutual funds and... Read More
Just about everything you have been told about Social Security... Read More
In a previously written article, we expanded the use of... Read More
First let's see what protectionism is. According to Mr. Webster... Read More
cleaning lady near Bannockburn ...The bulls and bears of the stock market are both... Read More
Dollar cost averaging is one of the most popular ideas... Read More
The big bad bear is stirring again. So far he... Read More
For years I have been saying you must have a... Read More
It is difficult to make money in a bull market,... Read More
From the book 'The Stockopoly Plan' by the author Charles... Read More
Before you buy another car you walk around the lot,... Read More
The gleam and bright lights of Wall Street lure in... Read More
The Bollinger Band theory is designed to depict the volatility... Read More
How many times has this happened to you? You're at... Read More
If it walks like a duck, quacks like a duck... Read More
How can you dispel an illusion unless you look directly... Read More
Outlined below are some of the advantages and disadvantages of... Read More
Humpty Dumpty had a great fall and all the King's... Read More
Checked your 401K lately? Going back to about a year... Read More
I cringe every time I hear a novice investor tell... Read More
As I have said many times before in this column... Read More
Success in small cap & micro cap stock trading like... Read More
"Buy and hold" is one of the most heralded investment... Read More
We need a rabbit!This was a pretty horrible week for... Read More
Every year I go to the Money Show in Orlando,... Read More
Never lose money in the stock market again. Yeah, I... Read More
Ever have one of those sample boxes of candy? Each... Read More
The Winter Games for the Olympics are coming up soon... Read More
You have heard about a particular mutual fund from a... Read More
Stocks & Mutual Fund |