Thursday, April 24, 2014

Five obvious reactions:The way people react to sudden spikes.

It's always obvious that people react to changes in the environment. People react to changes around them. In case of stocks market, people react to changes in market index, changes in price, changes in company's position in the market and all other changes. But it's so interesting to see people react to those sudden spikes in the market. These reaction includes various activities but i am only discussing five of them here.

Happy to sell:

This is the most anticipated reaction of all those stock holders who are waiting to sell their stocks. They are eagerly waiting to sell their stocks. If sudden spikes are observed then this is their obvious reaction. The are happy to sell. A highly potential stocks are owned by such type of stocks traders and they show this behavior which provides huge amount of stocks in market.





Sad because stocks are already sold:

This reaction is felt by many traders who had stocks that are sold already before it's price hiked. It's more like a wish for change in the decision they are already made. Now, it's already sold, it's too late to purchase the same stock. To deal with such part, they often wait for the stock's price to fall so that they will purchase it again later. This reaction is normal and those who cannot let go such sad reaction will find it hard to be a stocks trader.



Waiting to rise more:

Some people always want more. It's the reaction that makes them greedy. The hunger for more and more. It's kind of like drug. The more greedy you are, the more greedy you will become. Waiting for stocks price to rise further more sometime may become costlier then expected.



Waiting to fall:

This reaction is shown by those people who failed to anticipate correct selling price and had already sold the stocks they had. Now they want to hold that stocks again, what will they do? Wait for the stock's price to fall.



Buy and sell as fast as you can:

Normally, in order to show this reaction traders purchase huge volume of shares while it's rising. The anticipation is carefully analyzed and if it seems fulfilling then it's seen. Since there is no long term holding time, little increase in price is also seen as a stimulant for selling. This trend of buying while stocks is rising makes a trader more risk taker but at the same time more profit is made in short run.


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