We usually assume that the price will not go up immediately after buying stocks and that the price will not go down after we sell. This is a strange and generally misconception.
The fact is that in an upward trend, of course, when all those who might have been persuaded to buy, and there are no more buyers than sellers, the only way is to move the stock market down. But if you’re one of those people who looks at things from a logical point of view, you won’t be thrilled when your stock price goes down.
Rather, looking back, it was concluded that the price of these stocks could not rise forever, while its value remained unchanged. At this point, you think that lowering prices is probably a temporary process. But from now on, this downward trend is increasing day by day. After this process has been going on for a week or ten days, you will repeat the same logical argument you made when the prices went up.
Now think about it, this downward trend is likely to continue indefinitely, but the day you start selling it will be the end of a record time! Because you’re not the only one who ended up selling out of fear, you were an example of a normal person, and everyone else like you was selling. Now that there are no more stocks for sale, prices can no longer go down and the market will return.
Psychologists know that almost all humans are affected to some degree on a daily basis. Around the world, people don’t have the feeling they have on Monday (the first day of the week in Western markets) on Wednesday or Saturday, and that even affects their view of buying and selling securities. Given this fact, can’t Monday be the day when the majority of people logically buy stocks? They have already been engaged in worship and have a spiritual peace that has created a kind of happiness and a positive mental framework in them.
In addition, since Monday is the first day of a new work week, everyone is starting this day full of hope. If you buy on Monday as the week accelerates, your stock is ready to join the price growth rate. What else would be more natural for most people on this day than buying stocks? But if you’re a little smarter than the majority, then you’re asking yourself, isn’t it smart to sell your stock on Monday just when others are buying and offering to buy at higher prices?
Despite all that has been said, the bitter truth is that Monday is the worst day of the week to sell and the best day to buy stocks. In an emerging market, you are likely to find good prices to buy on Monday. A statistical study examining a three-year period showed that the average price list for the Dow Jones stock rose just $ 40 on Monday.
In other words, the average increase for a stock list on a large number of Mondays was 96 cents. Also, lower prices often start on Mondays and end in a crisis in the following days. The worst days of the Great Depression of 1929 took place on Tuesday, October, and Wednesday, November.
Of course, there are other reasons. It’s like it’s usually Sunday when a stockbroker is at home and his wife can spend more time with him. As a result, when he sees that he is desperately looking at the news page of the stock market and trying to gain a sense from the heart of these numbers, he shouts without preamble: “Please stop working on the stock tomorrow and so on. “Don’t worry about that."
Or, he says, a letter was received from our son at college saying that more money should be sent to them. Meanwhile, the trader’s wife warns him that he needs a fur coat or that the home heater needs to be replaced. On Monday, our traders think about how they can meet all of these requirements on their way home from the office.
The answer is, “Sell some stock."
Let’s look at another common example. When you think it’s time to sell some of your stocks, it’s logical that you should sell stocks that have risen sharply and kept stocks that haven’t progressed yet.
It doesn’t take much to argue that stocks that have risen the most are more likely to be risky, but stocks that have remained unchanged are less likely to fall. So if you sell the ones that are up and running and keep the other stocks, when those that are stagnant also increase in price, this decision will be profitable for you overall.
The only problem is that such an argument, while logical, often goes wrong. The reason for the increase in the price of some stocks is probably the industrial growth and development that this company represents. As a result, the stock is likely to rise more than others. Also, stocks that remain unchanged usually suffer from a fundamental weakness. But when you have to sell stocks to make a profit, you naturally want to sell your most profitable stocks and keep stocks low.
So you say to yourself, “I’m going to sell the ones that are more profitable to me than the money I’ve paid them, and I’m keeping the rest so that they can show their returns." Because you are accustomed to achieving reasonable results, you are selling stocks that are most profitable for you, and you are looking for those that are more likely to fall in value than their price.
Eventually, you’ll find that you’ve kept a handful of worthless stocks, and the stocks you’ve sold have grown. The inexperienced shareholder, who has 100 shares of the stock at $ 15 per share, thinks logically. “Well, even if the stock price goes down to zero, I’ll lose a maximum of $ 1,500."
But if the person had 10 shares worth $ 150 per share instead of a hundred shares for $ 15, he would be in a safer position. A stock that costs $ 15 is much more likely to depreciate to $ 10 overnight. But the $ 150 stake in stock market volatility is much lower, according to statistical studies.
Aside from the fact that more expensive stocks are more valuable (which would not otherwise be expensive), these stocks are bought by people who do not have much wealth; That is, those who are easily intimidated and sell their shares quickly in the face of psychological stress. According to another logical conclusion, the probability of a decline in the price of a booming stock is less than a booming boom.
An investor naturally wants to keep a company that benefits him a lot, doesn’t he? But perhaps during the booming market over the last few years, you’ve noticed that during the downturn, the stock that performed best was the same low-bond stock.
The only people who will never sell their shares without their will and under the influence of fear are the same major shareholders who are able to keep their shares in order to benefit from them in the future and do not pay attention to its immediate return. They prefer low profits when the income tax rate is still high.
Based on the above, we conclude that acting on the basis of logical rules in the stock market is in some cases very risky. So maybe it’s best to follow the advice of those who know more about you. Your agent can be one of those people, because he’s been trading stocks all along, and that’s actually his profession.
Published and authored by FalconProfit.com