In these turbulent economic times, many investors are wondering if another financial collapse is imminent. In fact, there have been several cases of market crashes and implosion of major financial institutions like Enron, WorldCom, and several others. These events have shaken the confidence of investors worldwide. If you have been waiting for a big drop in stocks or another big crash in the share market, this may be the time to start investing.
Why is this? Is there something else going on? If so, why not now? Is this the perfect time to purchase stocks? If you buy during a market rally, you’ll get a huge profit off of your retail trading. The market will be looking to dump shares and bring prices back up.
Another good question to ask yourself is, “When will the markets reverse again?” This is very important because retail trading has become very volatile over the past few years. The market has been making some wild moves and the potential to make money has always been present, but many investors are fearful of riding these moves until they turn into losses.
Now, you may be saying, “But I thought stocks would go down in a market crash!” It’s true, you’d have a better chance of survival if you sold when the market was at its lowest. However, there have been times when the market has risen very quickly and prices have dropped right back down to where they started. Why does this happen? Why won’t the markets just continue on their upward swing like it has been doing for the past few years?
There are several reasons why this doesn’t happen. One of them is the simple fact that when the market starts to rebound, it can take its direction very quickly. Even if you’re right about a particular stock or group of stocks, the momentum will soon take it out of your profit range. No matter how many great reasons you have for wanting to get in now, chances are you won’t be able to convince anyone else. They may already have made up their mind that they want to get in before another big move happens.
So, what does this mean for you? It means you should hang in and wait for the market to make another big move before you start buying. The chances of a stock becoming even stronger than it is now are much higher than they were just a few weeks ago. You’ll either have to sell now to catch up, or wait for a big move to happen again so you can make money. The latter is obviously the better choice as it will result in a higher profit margin.
Another question you should ask yourself is whether your position is long term or short term. If you’re a long term investor, what will happen if the market crashes and you don’t get a piece of your investment? If it’s short term, will you lose everything you’ve invested? Many retail traders get too comfortable with their strategies and think that they can ride out any market condition forever. That’s just not possible. There will always be a market down, and you need to be able to respond to it.
If you’re holding a position for the long haul, you should always look for another signal that may indicate a market upswing. Don’t rely purely on the daily stock report because those aren’t very reliable. They can get messed up by accounting errors, overpricing, and unannounced changes. They can also signal a change in market sentiment, which can be risky if you’re trying to protect a position. A weekly stock report can show some signals, but they aren’t very reliable.