Calm before Storm, Get Ready!

Do you have the experience that everyday is a good day? If your answer is no, that means it will be the same that no everyday is a bad day. There is no forever sunny and no forever rainy.

Recently market is quiet like dead water. This doesn’t happen for a long time. Everybody is looking each other and waiting. For those have share on hand, they are waiting the opportunity to sell. Those who have cash and they want to buy, waiting opportunity to buy. Third category of investor is they don’t know either buy or sell. They want to wait and see.

If there good news coming out, market will start to go up. It will trigger buyer willing to buy at the higher price. Same for the bad news will trigger the seller sell in the lower price. What will trigger the market?

When volume start coming back, that mean people know their direction. These people are the pioneer of the market. If you are the follower, let see what the possibilities is.

Market suddenly goes up, you go to chase buy at the high price. You think market will go up. If market goes up follow true, you will earn less than the pioneer or you may not get to buy because lot of buyer and seller gone. If market goes turn and go down, you are actually buying the stock from the previous batch of people. You lose more than others.

Market suddenly goes down, you scare and you sell the share which previously wants to sell higher price. There is no buyer and lot of seller. You may not success to sell and just watching the price go down. If let say you success to sell, that mean there is value of the share on your hand actually. The price may just dip for a while and recover. That mean you sell at the lowest price. You lost more money than others.

If you collect the good share during the market quiet, the chances to loss will be lower. The margin of loss also lowers than other people. The good company share may drop, but the difference will be not much. It will go back to the value after sell off.

Always be ready before the storm comes. Lull before the storm.