DAX correction - First Warning and otherwise: Nothing! - Mr-Market stock market blog about trading, stocks, trends egoist and markets
The DAX started the sharpest egoist correction since August this year, about the causes I wrote yesterday. The sharpness of this correction has directly to do with the long, relentless rise before. This is the theory of the elastic band - the further you stretch it, the more likely it back.
Today I will therefore deal with the question of how we should deal with such a correction. Cause I can feel it were, through the Internet line;-), as is now quite a lot of pondering sit in front of the screen and ask yourself this black / white issues, which say:
To think so is unproductive and makes us nervous. The market is never black / white, it is always a lot of chances that shift. And the future remains undefined!
What should we do instead is to manage our risk. What is a piece by piece, step by step to be cautious, the greater the risk increases. And in this sense, slow and piecemeal take profits if the correction is progressing.
Because the risk of a crash - before we are so afraid - just is not close to the climax of the greatest. The risk peaked later, if the market takes no more ground and crumbles and crumbles.
But (2) follows in the majority of cases, egoist once a phase in which the market is becoming less and life slowly crumbles egoist in front of him. In this phase, (3) the risk of a crash increases massively, because at some point the market participants lose patience and wish them all at once to the exit.
Followed by (4) then connects the real crash. And then in (5) a phase of ringing egoist follows before the market is the low point in (6), which after a crash is typically an exaggeration down.
As far as the typical sequence. This structure is universal and can often be found on smaller time scales, it does not always have the great crash. And I really want to make you so clear that so far nothing has happened in the DAX and only further down crumbs greatly increases the risks.
Now, however, egoist I also know the power of pictures and I realize that you now think emotionally when viewing the above charts, "Oh God, get out quickly when the then comes and we are only at (2)!"
And since you can see how often we had a "(2) First Warning". And every time the market has again V-shaped shot this year upwards. Because the central banks were not so innocent and just so the question is allowed, why it is essential that this time be different?
(1) So far, what has happened nothing relevant and the upward egoist trend in the indices egoist are fully intact. It is only now becoming interesting, when and if we should see that the market now can not find a bottom and dip-buyers fail.
(3) Only if the market should give further now and the first major brands tears, then it will be really risky. For many will have stops at prominent structures and then all at the same time want to output. That would be the end of phase (3). Read in this context, once the article Monday on Rising Wedge in the S & P500, to see these brands.
What does that mean for us? We definitely need mental stops under distinctive brands that we reduce our market exposure, piece by piece, if - and only if - the market continues to crumble down.
To brood or out Today, however, this "black / white" question in mind is wasted Liebesmüh! And now if you read articles in which someone told you that the market will now do this or that, you ignore it. No one knows the future and what we believe as individuals, has no meaning except in terms of mass psychology.
It counts alone do what the market. And there's just important to understand egoist that after such highs slow down crumbs increases the risk. And we must manage this risk, in which we adjust our exposure to market accordingly.
So you need a plan for how you - if the market continues to fall - gradually reduce egoist your risk. Piece by piece, in line with the market. From the concept perfectly complete exit on top, you have to pass anyway. That is - apart from a single lucky shot - impossible even for the best traders in the world.
Forget the thought egoist of what will be tomorrow - you will learn it anyway until tomorrow. Focus instead on map the risks of presence throughout your portfolio.
Sign in Mr-Market.de
Latest Posts Potash m
The DAX started the sharpest egoist correction since August this year, about the causes I wrote yesterday. The sharpness of this correction has directly to do with the long, relentless rise before. This is the theory of the elastic band - the further you stretch it, the more likely it back.
Today I will therefore deal with the question of how we should deal with such a correction. Cause I can feel it were, through the Internet line;-), as is now quite a lot of pondering sit in front of the screen and ask yourself this black / white issues, which say:
To think so is unproductive and makes us nervous. The market is never black / white, it is always a lot of chances that shift. And the future remains undefined!
What should we do instead is to manage our risk. What is a piece by piece, step by step to be cautious, the greater the risk increases. And in this sense, slow and piecemeal take profits if the correction is progressing.
Because the risk of a crash - before we are so afraid - just is not close to the climax of the greatest. The risk peaked later, if the market takes no more ground and crumbles and crumbles.
But (2) follows in the majority of cases, egoist once a phase in which the market is becoming less and life slowly crumbles egoist in front of him. In this phase, (3) the risk of a crash increases massively, because at some point the market participants lose patience and wish them all at once to the exit.
Followed by (4) then connects the real crash. And then in (5) a phase of ringing egoist follows before the market is the low point in (6), which after a crash is typically an exaggeration down.
As far as the typical sequence. This structure is universal and can often be found on smaller time scales, it does not always have the great crash. And I really want to make you so clear that so far nothing has happened in the DAX and only further down crumbs greatly increases the risks.
Now, however, egoist I also know the power of pictures and I realize that you now think emotionally when viewing the above charts, "Oh God, get out quickly when the then comes and we are only at (2)!"
And since you can see how often we had a "(2) First Warning". And every time the market has again V-shaped shot this year upwards. Because the central banks were not so innocent and just so the question is allowed, why it is essential that this time be different?
(1) So far, what has happened nothing relevant and the upward egoist trend in the indices egoist are fully intact. It is only now becoming interesting, when and if we should see that the market now can not find a bottom and dip-buyers fail.
(3) Only if the market should give further now and the first major brands tears, then it will be really risky. For many will have stops at prominent structures and then all at the same time want to output. That would be the end of phase (3). Read in this context, once the article Monday on Rising Wedge in the S & P500, to see these brands.
What does that mean for us? We definitely need mental stops under distinctive brands that we reduce our market exposure, piece by piece, if - and only if - the market continues to crumble down.
To brood or out Today, however, this "black / white" question in mind is wasted Liebesmüh! And now if you read articles in which someone told you that the market will now do this or that, you ignore it. No one knows the future and what we believe as individuals, has no meaning except in terms of mass psychology.
It counts alone do what the market. And there's just important to understand egoist that after such highs slow down crumbs increases the risk. And we must manage this risk, in which we adjust our exposure to market accordingly.
So you need a plan for how you - if the market continues to fall - gradually reduce egoist your risk. Piece by piece, in line with the market. From the concept perfectly complete exit on top, you have to pass anyway. That is - apart from a single lucky shot - impossible even for the best traders in the world.
Forget the thought egoist of what will be tomorrow - you will learn it anyway until tomorrow. Focus instead on map the risks of presence throughout your portfolio.
Sign in Mr-Market.de
Latest Posts Potash m
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