yes im new and writing this question to the best of my understanding. if you feel like i should ask a better question then please correct me oh what i should ask about. what is the main trigger for new traders riding the trend down to the bottom and then exiting all at once right before it turns or is it their panik selling that turns the trend back up? it was mentioned in few books and videos but never was broken down in depth everyone kinda just says. nobs sell at worst time just because they re noobs.. but no technical details about what drives the whole process i belive i understand why they ride the trend down but im still trying to process why and how it happens that alot of them feel the urge to sell at the same time. i remember someone mentioned "maximum pain" but what does that mean. if they all entered at different times so the number and percentage losses are different for each player but their decision to sell happens almost at once.that would mean that the area of maximum pain is dictated by the actual trend regardless of where they entered and how much they lost? is it certain amount of time passing or lack of green bars or the speed of downtrend ? i want to know more psychology and mechanics of this specific action. i want to understand that better. please dont engage in unrelated discussions if you dont know you dont have to answer or derail this post with nonsense just move on to another thread and derail that one...
Here is how you find out what the “maximum pain” is: Step 1: Take all your life savings and put them into your trading account. Step 2: Use the maximum leverage you can to buy stocks, commodities or currencies (it doesn’t matter which). Step 3: Say abracadabra, and then like a magic, very soon you’ll start understanding what the “maximum pain” is. It works like a charm, never fails, although some people need to repeat the process number of time before the lesson sinks in.
%% LOL; dont try that @ home............................................................. 1] Mainly cause by ignorance . - [-666-]And ignorance in sellin ' all thier position @ once,trades to big for tradres bankroll; also could be caused by all selling thier position @ one + wisley taking a profit LOL -[-666.666-]-And learners; Larry ''Mint'' Hite was long + short differnt months in pork belies; losing on both sides had to sell + prayed to God ''he would not owe money on that losing trade LOL
I did that already. once. It doesnt help a new trader doing things without context or understanding. I was just one of many noobs selling at the bottom. Doesnt mean i understand why or understand the technical details about the process
%% SURE it does ; simple math means if you sell in 2 section impossible to sell @ ''the bottom'', daily charts. Trying to trade noise or penny stocks \any stupid thing is possible TRY reading a lot, lot more + doing some investing/ By the way ''did that once'' means very little or nothing..................................
It's just decision which is comfortable: after decent downside move you become confident that bearish trend has started and it's time to sell. This lag dictates why you are late to the party. Being profitable always implies you have to be slightly contrarian, i.e. be ahead of the crowd
Price action is created by the interaction of individuals in the marketplace. Bottoms are often characterized by capitulation, which by definition occurs when some material portion of asset-holders collectively decide to puke out of their positions - based on newsflow, recent action and other factors. Human psychology is similar from person to person, leading to the phenomenon where many such weak hands reach their uncle points at approximately the same time. Note that the reverse is also true i.e. weak hands will capitulate into a strongly trending asset at approximately the same time, usually after a large move has occurred and fairly close to the turning point. See for example the ARKK NAV over time, most of the money piled in right at the top. This means that when the tide turns, everyone starts seeing red at the same time and to approximately the same extent.
%% Trading noise means its so easy to be late or early to party; NOT much of a party LOL 777] Or be late + folloW +trail trends /works well \mostly
But what causes people who entered at different times to sell all at once? or is it because the new traders cant read the chart and cant tell whether its a downtrend or pullback? what is realistic as a professional and profitable trader. I honestly dont even know what is a realistic expectation as a pro when it comes to reading charts.