Monday, 11 April 2011


When the share price goes up, it means that there are more buyers than sellers?
When the share price goes down, it means that there are more sellers than buyers?

The two statements above sound logical correct.

But it is not necessary true.

There are always an equal number of buyers and sellers. The number of stocks bought and sell in market is alway equal. If not, who buy the xx lots which you had just sold? And don't forgot, the person bought at the price which you sold.

"When the trend is up, bulls feel optismistic and do not mind paying a little extra. They buy high because they expect prices to rise even higher. Bears feel tense in an uptrend, and they agree to sell only at a higher price. When greedy and optimistic bulls meet fearful and defensive bears, the market rallies. The stronger their feelings, the sharper the rally. The rally ends only when many bulls lose their enthusiasm." Alexander Elder


la papillion said...

Hi OT,

I had this in my newbie's faq guide:

I thought a little numerical example would illustrate what exactly is meant by enthusiasm of the buyer and desperation of the sellers.

Hope you find my book recommendations good? haha

OT83 said...

Hi LP,

Thanks for the link above and the book.

The five star book is good. I read the first chapter of it found that it quite similar to the other books I had read so far but it was more like a summary of many books.

However, I decided to skip this book and go to Alexandra Elder first as more TA is much weaker than FA but I will come back to this book after I finished the trading for a living.


la papillion said...

Hi OT,

Ok, as you wish :) After trading for a living, do try sell and short sell by elder too. It's not so much about short selling, as the title suggested. It's an even more advanced book on proper management than trading for a living. I always thought trading for a living is more like a beginner's introduction to all the indicators.

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