Traders are generally of 3 Types:
Markets in the short term depend on 2 things:
The minute to minute price fluctuates based on Demand & Supply.
The thing about trading on expert advise heard on TV is that it can at times CREATE it's own demand. So if a channel has a million viewers, and roughly 30% follow the "calls", then the price will go up because so many people followed the call.
So an "expert recommendation" can actually push the price up or down depending on the call.
Now there has to be a seller of the shares for a buy to take place. So someone is effectively saying that the TV expert is wrong, and doing quiet the opposite. Why would he/she do so?
But remember that good traders get 60% to 65% of their calls right. Simple, but they make more money on the right calls than they lose on the wrong ones.
The basic trading motto that you may want to internalize before you start trading in real life is as follows-
"Let the profits run, cut losses immediately. Be dispassionate about a trade, even if it is adverse. If you have an emotional hangover at the end of the session, you will lose, and lose horribly. The market charges its fees and NO ONE who has made money in the market has not paid it."
These are principles of trading, NOT INVESTING, those are a completely different set of rules!
- Technical Analysts- These types use technical analysis and computer simulations, to arrive at target entries and exits, using tools that they find useful. There are more than 200+ Technicals as they are called and people use what suits their styles. Some use MacD, some rely on Support and Resistance etc.
- News Traders-They keep an eye on news related to companies with their ears to the ground, and taking positions based on it.
- Intuitive Traders- As the name says, these guys rely on intuition to make trades.
Markets in the short term depend on 2 things:
- Demand
- Supply
The minute to minute price fluctuates based on Demand & Supply.
The thing about trading on expert advise heard on TV is that it can at times CREATE it's own demand. So if a channel has a million viewers, and roughly 30% follow the "calls", then the price will go up because so many people followed the call.
So an "expert recommendation" can actually push the price up or down depending on the call.
Now there has to be a seller of the shares for a buy to take place. So someone is effectively saying that the TV expert is wrong, and doing quiet the opposite. Why would he/she do so?
- Made more money from an earlier purchase or sale than the experts target.
- Need cash for something.
- Margin Calls
But remember that good traders get 60% to 65% of their calls right. Simple, but they make more money on the right calls than they lose on the wrong ones.
The basic trading motto that you may want to internalize before you start trading in real life is as follows-
"Let the profits run, cut losses immediately. Be dispassionate about a trade, even if it is adverse. If you have an emotional hangover at the end of the session, you will lose, and lose horribly. The market charges its fees and NO ONE who has made money in the market has not paid it."
These are principles of trading, NOT INVESTING, those are a completely different set of rules!
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