Category: Money tips Release Date: 2006-02-15
Buy low sell high is the fundamental principle of portfolio investment, however, put this principle into practical operation has been difficult. The concept of the most vulnerable the hardest action exist side by side. Both feel of or be based on the theory, there is high or low price-judgments often wrong. So, when up to buy or sell homeopathic action when it came into being.
Investment in the securities arena, the term "homeopathy" is the most appealing program of action.
Market breadth, however capricious, and a rose on the forward, a down on out, the result is often exhausted in return time and time again it is time and time again lose money trading. Therefore, up to buy or sell only in the Change have sufficient space is valid.
Up to buy or sell should be established in a number of locking conditions and trends on the basis of foresight. Market-timing is essentially a change of trend continued its grasp.
In what sense we are able to grasp the market trend? In other words, what characteristics of the stock market trend? We know the factors that determine stock prices are diverse, and these factors themselves are ever-changing various factors play a role in the ever-changing combination of forms are also, therefore, the inevitable trend of ever-changing stock, complex, and human fingerprints, is almost exactly the same no the two processes. Therefore, any attempt to quantify accurately predict movements in stock prices, or to attempt to boil down to price movements in a fixed pattern repeating cycle of the basic method will inevitably go astray.
However, if we just generally, the approximation, the historical (in a certain period of time) or relative (in respect of certain price patterns) study stock price movements, you can find not only the stock price movements are the rules, but is also often the simplest .
In other words, stock prices completely without rules "Brownian motion" also and the earth on the "vacuum" is a special condition, like a special status. The reason: the rise and fall stock prices that only two kinds of movement (flat plate as an exception), all the factors affecting stock prices rise and fall can be attributed to increased strength and decreased strength of two categories, while the strength of these two forces are not always in equilibrium state, and depends primarily on fewer of them several basic factors that determine the imbalances and changes in the rules of the volatility of the rules, habits, and thus determines the stock market predictability.
Therefore, the stock market has rules to follow but no set rules-based, predictable, but only relative and blurred and the conclusions. This means that investment decisions follow the sale of the times point of view would not be complete, clear, but only under limited conditions, can realize the maximum potential.
From the conceptual understanding of the trend can only be a limited understanding of the characteristics, thus bringing the stock of the situation on the maximum likelihood of the goal, rather than intact, there are beneficial to investors hesitant to exclude the psychological, enhance decision-making convictions, resulting in a more relaxed state of mind support, seized the opportunity to conduct decisive operations.
The most likely possibility because of the principle ruled out the precise timing of the trends and predicted that in the specific operation will be entirely the exact point in time is indicated by the actual trends. Therefore, the timing behavior should be two levels or two stages, the dual behavior: the rational sense of timing with the election. Reason the transaction when the election processes, according to market development of the status quo, using various analytical methods and theories to determine the trend of price movements and trading opportunities, and whether to proceed with the sale of the current decision.
Feeling when the election is made at the time the election under the rational trading decisions in real-time transaction process to capture a low point to buy or sell a higher point. When the election is rational sense of the election when the fine-tuning and specific, and thus feel more than just a mechanical timing of the execution behavior. The sense here than just the price low or high point of certainty, rather than on market sentiment and emotional response to the infection, on the contrary, the latter is the double-timing method is effective to exclude a harmful act.
