Saturday, June 30, 2018

Freeze Mode....Small Changes

Freeze Mode....

Yes aren't we....I mean in the freeze mode....state of inertia...sitting ideal....of doing nothing and let the situation turn around to once again become favourable to you...our brain has become indecisive to take a judgement whether the midcaps or Smallcaps will fall further or will go up....whether to stay invested or to sell in the current scenario.....it's about the ongoing battle in your mind and a full blown war is  waging in your head which at times tells you to sell and at times tells you to wait that the prices will go up.... It's a common fallacy experienced by all investors and these state of restless makes sure that we don't sell and our portfolio becomes Red and the loses  on our investment  goes  up and eventually the accumulated losses becomes deeper and deeper.....no way you can get out of such situation because your brain is not ready to accept the loss and your brain will still give you false hope that good days will surely come and how the hell can you sell your stocks at a loss...so the waiting game starts and the small changes in prices on the downside keeps on going further downwards and we still maintain our status quo...not realising that something is wrong and things are not what they were just a few months back....so these is the time to take things in your command and introspect the current situation and think out of the box and to analyse the real situation before it is too late.... first happens the small changes and these small changes are not easily readable....and thereafter when the changes happening are very large and when they become prominent and easily readable because of these changes the situation is out of our control and we sit on Hugh losses before we gain our senses about the real situation around us.....
Can you see the changes happening in your life on daily basis.....no you will not see changes happening at all on day to day basis ....but yes changes are happening every moment.... every day but they are so minuscule that we can not see those changes at all and neither can we experience those changes.....but when you compare the changes today with 10 years back the changes are massive....and in almost all the things you will see massive changes.....so what I am saying that we human beings are not very good in understanding and do not have the know how to read small changes happening around us....
So in stock market we don't have the capacity to read the small changes happening in Prices..... whether it is on the downside or on the upside.... and by the time we realize the small changes the prices are way up or way down....they come to our notice only when the jumps are like kangaroos...... and then it is too late....

Actually the operators in a StoCK take advantage of these bias which we have....

If they want to take the price of a StoCK from say 100 to 50..... Will they take the price down in linear manner say in 10 days.....no.....but they need to start selling from 100 uptill 50.... So they sell in zig zag fashion...they don't want to alert other investors to know that they want to sell and are selling....so from 100 they start selling and take it down to 96.... Then again they take it up to 99.... Now say these happens in 15 days....now again from 99 they sell and take the price to 93....then again they take the price to 97....these phase takes 20 days.....now again in  third phase they start selling from 97 and take the price to 90.....now the third phase takes around 25 days..... like wise phase 4 happens...then phase 5 happens and in 8 months time the price from 100 will go to 50 and in all these phases because small changes in prices are happening so you won't be able to sell.... and that is what they want....and finally out of frustration you will sell at 50 and the cycle will reverse and again he will start buying ..again to trap new set of fools....I mean investors.....

No comments:

Post a Comment