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Summing up the Process of Buying Stock
While the clever people are buying stocks during the two first cycles of the market rise, the na?ve people are selling them. The big change occurs when the last stretch arrives. Now the clever ones will need to distribute the previously bought stocks and the na?ve ones will grab these stocks from their hands as fast as they can. The clever ones will continue getting rid of their stocks during the two thirds of the market low and the public will continue to buy them blindly hoping in that the price will turn around. Once the third final of the cycle of the low comes around, it is finally perceived that something is going wrong and they then start to sell their stocks which are once again bought by the cold and calculated clever ones that do forget the development of the cycles. A careful speculator should start to buy right in the first high phase when the high tendency has been confirmed. Then he should allow happenings to take place, start to sell when the movement seems euphoric, and stop selling when the prices have confirmed the expiry of his high cycle. Although this might all seem like a very simple process, it actually isn’t. Without the help of a technical analyst, this attitude is extraordinarily difficult to achieve. Most of the stock market assistants always think in the same direction, and that is why it is difficult to step away from general opinions. It is hard to be optimistic when everybody else is down and to be pessimistic when everybody else is shouting victory. For this reason, the key is in acting in an analytical way and not hold consideration for the stock exchange public opinion.