how to watch stock market 2016
1.World markets has changed but People don ‘t change
Now we have world markets. There seems to be a stock exchange in almost every country. Did you know there is a stock exchange (of sorts) in Baghdad? I have not heard if they are back in business now that the war is over.
It is kind of amazing that with all these new traders and with all the varied stocks in every part of the globe that market mechanics would have changed. They have not.
As a technical analyst and trader (I was an exchange member and floor trader for 17 years) I still see the same trading patterns I saw 30 years ago. Wouldn’t you think with this tremendous expansion that something would be different? It isn’t. Why?
The reason is very simple. People don’t change. The basics of the market fear and greed still dominate. Emotions have not differed in thousands of years. As far back as recorded history people have reacted in almost the same way.
2.Multi-angle analysis of the stock market
The economists say that because of the interest rate cuts by the Federal Reserve and the huge inflow of cash that the economy will recover in a short time. The bankers opine that all that money that the banks are allowed to loan is not being given to their old customers and they definitely don’t want to make new loans to new and unknown companies. The brokers say you are in for the long haul and don’t worry the market always comes back. The financial planners have a new plan to diversify your holdings by shifting your money around to take advantage of this current market.
They are all right and they are all wrong. You cannot explain the overall economy with a single solution. We have a complex mix with new ingredients coming to our awareness each day.
To get a better look at this stock market you must stand back not only in distance but in time as well.
Now is the time to be wary of whom you listen to before you invest or make any changes in your investments.
3.The control of emotion
When you invest money in anything you cannot afford to have emotional ties to it. You must be willing to sell when the time comes. Most people don’t want to sell for two reasons. They won’t take a loss; however, the main reason is psychological – they don’t want to admit they were wrong. When I was a broker I would watch people trade. Almost none of them were trading to make money although that was what they said. They were trading to find out how much pain they could stand from losing. They were trading for emotional reasons.
Let go of those emotional ties. You will make more money.