#6. “When markets are going up, good news come out and when markets are going down all the bad news comes and people get afraid to invest.”
When the markets starts to go up, most people wait to confirm the uptrend but when they get confirmed and buy, the markets get reversed. This means you bought at highest point or peak. This happen because all the good news excite people to buy. By the time people make confirmations, it’s too late to profit. All this happen because smart money or intelligent people make the market not retailer.
In 2008, market get started to fall in January but the actual case of Leman Brother came out in Sept. This means that the intelligent people knew beforehand that there was going something wrong and try started to sell. Market makers knew 8 months before that there Leman Brothers will collapse. But before that events all the news were very optimistic and markets were bull at that time. And when the actual events come out in public the markets have already fallen. In technical analysis, we see the “Price”. Price is God. The Price know all the things actually happening in the market, because intelligent and smart people make it. Smart money knows what to do.
#7.You don’t buy a continually increasing stock because you expect it to come down, but when it goes down significantly, you don’t buy it even at these lower prices.
The smart money knows exactly what the people are thinking when prices are continuously increasing in price. When a stock increases continually, most people think that when it comes a little bit down then I will buy it, but the prices keep continually going up and you can’t catch the prices. You think that next time I will buy at these prices but the prices never come. If your price comes, because the stock coming down, there are some negative news keep circulating in the market. Now the prices are good but people don’t buy because good price always comes with bad news and people get afraid to buy at that point. This happens because this is the way of working of market. You will not get good prices with good news. The best prices come with very bad news.
#8. You realize that you are doing same mistakes when you lose in market. Most of the people do the same mistake when they lose any trade in the market. This is the ways of market. The market creates same situation and you forget and get trapped in the trap of the market. Again you realize the same mistake but do the same things over and over again. You can these mistakes only when you know the psychology of the market.
#9. Your stoploss hits most of the time. If this is the problem that any stoploss you setup, every time your stoploss get hit and you are out of the market and prices goes up again in your direction. The intelligent market participants know your areas of stoploss so first they hit your stoploss and then make the journey.