Source: Profile Traders
| A few years back, I used to conduct stock market workshops once in a while. In one such workshop, an elderly gentleman (60 years+) asked – ‘Why this stock market is so unpredictable? Is there any formula or secret to predicting the behavior accurately?‘ I took a break from my explanation and asked him a question. Me – ‘I will explain sir, but before that, could you please answer a few questions?‘ Him – ‘Yes sir, please ask.’ Me – ‘Could you please tell me what you had for the dinner yesterday night?‘ Him – ‘Yes, chapati, capsicum curry, rice, and curd sambar.’ Me – ‘ok, could you please tell me who prepared it? Him – ‘My wife prepared it sir.’ Me – ‘ok, any idea why she prepared capsicum curry? she should have prepared any other vegetable curry?’ Him – ‘No idea sir, my wife prepared it.’ Me – ‘hmm, any idea why she prepared curd sambar only? again she should have prepared any other sambar?’ Him – ‘No idea sir, I need to ask my wife.’ Me – ‘hmm ok, may I know since how many years you have been married? Him – ‘30 years sir’ Me – ‘Sir, you have known your wife for more than 30 years, but still, you could not predict why she prepared capsicum curry and curd sambar. Whereas the millions of people participate in the market, and their combined action results in the price fluctuations, and you want to find a secret formula to predict its behavior. How is this possible sir?’ It made a lot of sense to him (and to all the workshop participants). |
| It’s always tricky to accurately predict the movements of stocks, as they are influenced by various factors- from the company’s performance to overall economic conditions. In addition, stock markets can be swayed by the actions of large financial institutions (known as “institutional investors” or “FIIs”), and these institutions may have different perspectives on a particular stock or market. Finally, stock markets can also be impacted by sudden changes in the economy- for example, a recession could lead to a decrease in overall investment and consumer confidence, which would cause stock prices to drop. So instead of knowing the reasons behind the stock market fluctuations, it is better to pick one profitable trading strategy and take trades based on that system with proper money management rules. At least this can help you to make some money from the stock market. |