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Good stock continious fall --what should you do?

Tuesday, September 8, 2009 | Labels: , , | |

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Market is place where we think stock are traded, but in those huge number of population of trader emotion of trader are traded with each transaction is complete. This is quite simple if you look at screen and watch forces behind price volatility. This will tell you about emotion of investor, trader. They trade as per their emotion say to them.

 If you ever make any trade on market floor then you can understand it, We set some discipline before market starts. We will throw all discipline in trash as market passes. This happen with most of trader. If you allow yourself to stick to your discipline through whole trading session then you will find on winning shore.

Fear is strong emotion which shakes to professional trader also. As stock push back for correction, we can fill our stomach goes in and all breath come out. This create tension in mind. This is fear. We don't want to take loss then we choose one of the option

1 We are clear position,  go away from more losses
2 We wait for next wave of push up price which make on profit side.  ( Some time with wait trader also average for position)

Now I know you remember your trades which comes was come in  shadow of fear.

Sometime there is wave of fear comes in most of trader, they sell of all there position even in good prospective stock also. This is cause of continuous fall of stock.

In this fear and irrational stock behaviour Bollinger band help you decide to understand then mean of stock.

Condition: Strong uptrend stock in fear movement (continuous fall)
If you want to buy position when stock comes to it bottom (as you feel) , then wait for one pullback. There always seem pullback and again stock comes to near low or below previous low. If this time stock show you and pullback then you can buy stock.

In this time stock will give you amazing jump from this double bottom. This is happen due to fear which are in mind of trader due to continuous fall remain for some time. Even though their is push-back first time,  trader are not adjusted their mind to null. So you can find again fall in stock. In this time if there is pull-back that mean trader are ready to take stock back on average price. They are willing to buy. You can get right movement of buy with your own experience. To watch irrational behavior, I will suggest you learn to use Bollinger band.

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