|
|
|
|
|
|
|
trading patterns of a stock toward the close before participating at this time. I have sometimes found this a good time to enter low-ball offers to buy and see if they get taken, when a stock is selling off during this stage. But I do it only when there is reasonable probability that the price I get it at will set me up to already put me ahead by the next morning. In other words, I never buy at the close if I think the price is going to continue to fall in after-market or next morning trading. |
|
|
|
|
|
|
|
|
Cyclical Events Affecting the Market |
|
|
|
|
|
|
|
|
Besides the broad stages of the trading day, investors also ought to be aware of some of the cyclical events affecting the market. Active traders stay informed of these events because they know that the events can influence the market. They then time their trades with these events in mind. While the more casual online investor is not going to go through the trouble of learning the various events that may affect the market, at least a passing familiarity with them gives you more of a piece of the puzzle. |
|
|
|
|
|
|
|
|
The market is a curious beast in some ways. As a psychologist, I find it fascinating how wild and panic-driven the traders can become when there is a powerful rally or correction occurring. There is a certain primitive, gut-wrenching drama that gets played out in the heat of buying and selling that clearly provides an exciting adrenaline rush for the participants. All you have to do to confirm this is to watch the guys gyrating in the bond market or witness the scene in the commodities pits. |
|
|
|
|
|
|
|
|
Don't think for a minute that those who last in these scenes don't like the action. They thrive on it. But it probably won't last much longer. Instead of guys standing around frantically calling out bids and offers, it will all be done by computers. |
|
|
|
|
|
|
|
|
Knowing that there is a payoff to the frantic action makes it more understandable how some of these guys can last through this process on a daily basis. Most people would no more want to work in the commodities pit than be forced to dig for coal in the pitch-black depths of a Kentucky coal mine. |
|
|
|
|
|
|
|
|
While there is this element of unpredictable and frantic action that takes place when the market is moving, on the other hand, traders seem to love things to be rather predictable. While on the one hand, they love to make big bets with their own and other people's money and thus are by nature risk takers, they also have a conservative streak that wants political and economic events not to disturb their trading world. |
|
|
|
|
|