I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!


Click to email CW8888 or Email ID : jacobng1@gmail.com



Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Friday 6 November 2009

Who Moves My Market? - Part 5

http://createwealth8888.blogspot.com/2009/11/who-moves-my-market-part-4.html

Price and Volume Action -The Importance of Volume


Why do we buy and sell?


There are only two reasons to buy:

1. Price will stop falling
2. Short covering


There are four reasons to sell:

1. Profit taking
2. Force selling
3. Cut losses
4. Short selling


Price of the stock is telling us what is happening to the stock, but volume tells us how it is happening. Volume reflects the sentiment of buyers and sellers and it then drives the price up or down.


A price rises on heavy volume means buyers exhaust the sellers and buyers are pushing the price higher as they fear of missing out. Likewise, a price declines on heavy volume means sellers exhaust the buyers and the sellers are pushing the price lower as they fear of further losses or fear of losing profit.

Why heavy selling or heavy buying? That is our job to think over it and decide whether we want to join in the action or not?

Another important reason is that technical analysis on charts on low volume stock may be unreliable and so don't try to analyse too much and mislead yourself.

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