Google+ Consumer Psyche: Stock Market Explained


Friday, June 13, 2008

Stock Market Explained

“Wall Street never changes. The pockets change, the stocks change, but Wall Street never changes because human nature never changes.” All of them made initial trading losses and these early reversals led them to make an intensive study of the markets, formulate rules of trading and then discipline themselves to stick to the rules and not get swayed by market gossip.

At the same time, all of them realized the dangers of over-confidence and that it was no use fighting the market. They understood that traders were bound to make mistakes and they put in place rules such as stop-losses that would force them to sell if they made the wrong calls. What’s more, several of them emphasized the importance of analyzing and writing down the reasons why the trade turned out wrong, so that they learned from their mistakes.

------- Jesse Livermore

1 comment:

Rahul said...

hii tiger,

the greater streatch of the market is explained by the Efficient Market Hypothesis, but there are funds such as soverreign funds that follow no rules. the fact that the market has speculators, makes it tradable and helps in the price discovery mechanism.

keep blogging