Investing In Stocks - Three Market Trends You May Not Be Aware Of
It's a no brainer that there is money to be made investing in stocks. But then it is just as likely you can lose money. The key is to pick stocks that will perform as you want. There are three terms that you may not have heard of and why they are important to you.
DEAD CAT BOUNCE: This is when a stock price increases after a long and sustained downward movement, but the effect is only temporary and the stock reverts to its down ward trend. In many cases the increased price causes investors to buy again and then lose when the price drops again.
Why this is important for stock trading: No one can really predict when a market or stock recovery will happen. It can however provide an opportunity for investors to buy or sell quickly to take advantage of the temporary price increase.
A BELLWETHER STOCK: This is a stock (or security) that usually signals the direction the market will take.
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 the effect that sees the beginning of a new year heralding higher stock prices in January. It has been attributed to tax factors and to investor sentiment. People often unconsciously expect prices to rise in a new year.
Why is this important to me? While research shows the effect to be real, it is hard to turn these gains into profits. The chances have become less and less. However it is important to be aware of this phenomenon so that if an opportunity presents itself, you may be lucky to be able to take advantage of it. - 23305
DEAD CAT BOUNCE: This is when a stock price increases after a long and sustained downward movement, but the effect is only temporary and the stock reverts to its down ward trend. In many cases the increased price causes investors to buy again and then lose when the price drops again.
Why this is important for stock trading: No one can really predict when a market or stock recovery will happen. It can however provide an opportunity for investors to buy or sell quickly to take advantage of the temporary price increase.
A BELLWETHER STOCK: This is a stock (or security) that usually signals the direction the market will take.
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 the effect that sees the beginning of a new year heralding higher stock prices in January. It has been attributed to tax factors and to investor sentiment. People often unconsciously expect prices to rise in a new year.
Why is this important to me? While research shows the effect to be real, it is hard to turn these gains into profits. The chances have become less and less. However it is important to be aware of this phenomenon so that if an opportunity presents itself, you may be lucky to be able to take advantage of it. - 23305
posted by Mr. Forex at
6:30 AM
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