Strategies For Trading Stocks
You and I both know there are no guarantees on how to make money on investing in stocks. From which stocks to buy, through when to buy or sell, the variables. You can only do your homework and believe your investigations are sound. There are three stock market trends that you may not be aware of and they are detailed below.
DEAD CAT BOUNCE: This is the effect seen when a stock price rises after a sustained period of downward movement. Often people start to buy again thinking the turn around has happened and then the stock drops even further.
What does it mean for me in stock trading? It is usually difficult to determine when a slide is going to turn around, so don't bank your house on a reversal. However for short term investors a dead cat bounce may present a selling opportunity.
THE BELLWETHER STOCK: This is a market indicating stock, one that predicts the direction of the market.
Why is this important? These sorts of stocks usually have a history of correctly indicating which way the market is going to go. They on themselves may not be attractive in terms of gains to be made, but will be useful to watch to get a general feel for the market sentiment.
THE JANUARY EFFECT: this is pattern that is often seen at the beginning of the calendar year when markets traditionally rise. Often the rise starts in the last few days of December and strengthens through January. Sometimes this is due to tax implications and psychological influences of the investor.
Why is this important? It has been shown in investigations that the January effect is real. However in recent years it has become more difficult to take advantage of. So it may be useful to watch for, but it is unlikely to be a reliable way to make money. - 23204
DEAD CAT BOUNCE: This is the effect seen when a stock price rises after a sustained period of downward movement. Often people start to buy again thinking the turn around has happened and then the stock drops even further.
What does it mean for me in stock trading? It is usually difficult to determine when a slide is going to turn around, so don't bank your house on a reversal. However for short term investors a dead cat bounce may present a selling opportunity.
THE BELLWETHER STOCK: This is a market indicating stock, one that predicts the direction of the market.
Why is this important? These sorts of stocks usually have a history of correctly indicating which way the market is going to go. They on themselves may not be attractive in terms of gains to be made, but will be useful to watch to get a general feel for the market sentiment.
THE JANUARY EFFECT: this is pattern that is often seen at the beginning of the calendar year when markets traditionally rise. Often the rise starts in the last few days of December and strengthens through January. Sometimes this is due to tax implications and psychological influences of the investor.
Why is this important? It has been shown in investigations that the January effect is real. However in recent years it has become more difficult to take advantage of. So it may be useful to watch for, but it is unlikely to be a reliable way to make money. - 23204
posted by X - Men @ 7:36 AM
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