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The Anti-Change Concept

Written by Ben

Wednesday, 10 October 2007

Most people, especially the naïve, like to buy all the way down. This is because of The Anti-Change Concept. When a stock moves from $1 to $1.50, the stock is deemed too high to buy. It then moves to $3.00, and then back to $1.50. Now at $1.50 it is considered too low to ignore. This is called The Anti-Change Concept.

Professionals like to buy all the way up. They look for the most odds. Amateurs like to buy on the way down. They have no stock market knowledge and wisdom. They lack experience and connections. Worst of all, they have no fear. Is there any wonder then, that they should expect to lose?

Success in whatever field needs your labor. A soccer team needs ball-handling skill, speed, stamina, tactics and a good coach. In the stock market you need knowledge, wisdom, discipline, patience, experience and courage.

So if you are about to go into the stock market without the above traits, better make your bets small; the smaller, the better.

If you want to lose money, here are some ways:

Believe everything you hear, especially tips. Buy in a downtrend. Take small profits. Holding on to a falling stock just to get out even. Average down and keep on averaging down. Buy ‘rubbish’ shares at very high PE. Go for the price rather than the value. Buy when the market is most optimistic. Buy when volume is at unprecedented height. Bet on every race. Be the last to buy and the last to sell.

Good luck guys and happy investing!

Comments

The Anti Change consept

malgen (Registered) 2007-10-10 02:01:34

Dear Ben

Its truly takes an experience person to write it, well said.

benjamintey (Registered) 2007-10-10 05:20:26

Hi Ben,

Mind to elaborate further on the "professional like to buy all the way up"?

I understand that price will only be able to break historical high with the pushing by this professional. But I just don't understand how to make money by buying high? Unless they are able to sell even higher (BHSH), but most of the time it's the other way round ...

ben (Manager) 2007-10-10 07:42:43

Hi Benjamintey,
Professionals referred to here are what some people called smart money or manipulators. Their strategy is to pump and dump. These people are rich and powerful. They have the resources to buy and keep on buying. The price needs to be pushed up before they start their distribution. Sometimes, they may operate in a group, buying and selling to one another and push the price up.
To track them, you must pay attention to your chart. In your chart, it is easy to see where the actions are. Pay special attention to volumes. They signify interest and action.
The best time to buy is at the pull-back from a genuine break-out at low levels.
Break-outs are tricky and many are false dawns. Be prepare to cut loss if your purchases go against your expectation.
It is not easy to read charts efficiently. You need to study them and play with them for a long time before you can understand them.

Myth #4: What goes up must com

tcsian (Registered) 2007-10-10 16:30:26

Would like to share this special section on Myth #4: What goes up must come down; or buy low and sell higher from THE 5 MINUTE INVESTOR ebook, in relation to the anti-change concept article.

Kindly refer to the Technical Analysis section.

Sorry for the inconvenience as I found it to be more appropriate to be there.

Thanks!

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The Anti-Change Concept