Friday, August 13, 2010 9:48:38 AM
I understand the Theories behind Market Psychology and the Tactics employed sooo...
It’s tiny by hedge fund standards, but it is at the cutting edge of behavioral finance, the intellectual offspring of psychology and economics.
Like others focused on behavior, it has long since discarded the idea that investors are rational, and tries instead to judge exactly how irrational they are. The answer is simple to explain, if hard to implement: two standard deviations of moves in its measures of emotion is a strong trading signal. When people are deeply gloomy about a stock, it is time to buy; when they are raving about its brilliance, sell.
Your particular style of trading works for you, but I am supremely indifferent to trading styles. I have the greatest respect for Chartist’s and those who understand the difference between technical and fundamental analysis. Charts are useful with entries and exits, but combined with sentiment, forward-looking events and fundamentals, it helps investors make a more informed decision. When I’m holding an investment long term, it’s not written in stone; material events, negative or positive, can affect my investment and I take the appropriate action. Financial decisions should only be based on one’s Financial ability. Sharing information with those who would like to trade vs. hold or perhaps a mix, is useful to a degree...
However...
All investors buy on anticipation, hope.
Delays are to be “expected.”
Matter of fact, the Market expects delays, profits from it, goes by The Laws of Probability.
Emotions distort our judgment, lower our standards...
To draw people into your pattern-seeking modes, into short-term focus with negativity by sowing doubt and confusion, instilling fear; may cause a few to make bad long term decisions...
BUT...
A savvy investor is aware.
All the bits and pieces are coming together and inevitably...
All this silliness will end.
In here everything is opinion or speculation supported by facts or fabrications...
Do yourself a favor. Resist it.
I wish all good health and happiness.
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