Trading Psychology 101

[PEMBROKE1]

Hi_price_and_voulume,

Thank you

I read "THE POST"

Your first four statements all seem to me that you are "ASSUMING" to a degree.

Is below basically what you mean when you say, "CHASING THE MARKET."?

Chasing the market refers to entering or exiting an investment with the intention of profiting from an occurring development or trend. It’s synonymous with herd instinct and typically involves buying in at a high price or selling at a low price after a sell-off1.

In other words, when investors or traders chase the market, they’re trying to capitalize on trends that have already been pursued by other investors. However, this strategy is often used in a negative context, as it implies coming into a position too late to fully benefit.

Efficient market theory suggests that financial markets are highly efficient, with new factors influencing prices integrated into valuations in real-time. If markets are truly efficient, chasing the market becomes futile. While some trading strategies, like momentum trading, can succeed in chasing trends, it’s generally more advantageous for retail investors to take a long-term investing approach rather than chasing short-term gains1.

Remember, chasing the market can be like trying to catch a speeding train—it’s often better to focus on long-term goals rather than chasing fleeting trends.