How to Make Money in the Stock Market Fast:An Exciting Theory.

Learn how to make money in the stock market
Learn how to make money in the stock market | Source

How can you make money in the stock market?

Here I am going to reveal an exciting theory on how to make money in the stock market fast and easily. I came to know about this unique theory from a friend of mine who is a seasoned investor in the Indian stock market. By simple application of this hypothesis many people who are investing in the stock market hoping for a quick profit, could make quite a good fortune in a short time.

We all know that investing in the share market is uncertain, especially when you are looking for making money consistently by trading shares on the stock market. However, you can get big returns in a short time if you know how to make money in stocks by following few innovative techniques that help to beat the odds. Let me explain here one such theory for making money on the stock market, which you will find a sure winner.

how to make money in stocks the easy way
how to make money in stocks the easy way | Source

How to make money in stocks in an innovative way--the theory explained

The unique theory about making money in the stock market in a sure and easy way says - run against the flock and make easy and quick money from your stocks. An equity rally always brings cheer to the market. Every correction is watched to see if it persists or if buyers come in quickly. So, how should investors behave in such rallies? Swimming against the tide can sometimes lead to minor wonders and for stock market investors such move may transform into huge profits quickly. That this theory of 'contrary opinion' provides a simple, yet effective direction on how to make money in the stock market easily, would be apparent from the explanation that follows.

Based on the common belief that the crowd is always wrong, it requires doing the exact the opposite of what everybody else is thinking of doing. Although the strategy discussed in this post on how to make money in stocks fast and without much risk, may appear quite simplistic, it often pays off. As any experienced investor will confirm, the stock market has a tendency to react in exactly the opposite manner to which every one expects it to behave. The reason is simple, when the vast majority anticipate something to happen; it invariably reacts in a way that prevents it from taking place. Take a situation where everyone expects the market to boom. In the hope that the market is going to rise, people start purchasing shares as a strategy to make money fast from his stocks. Stock prices will keep on rising as an increasing number of people start believing that the market will boom. Gradually, this expectation is transformed into the majority opinion. By the time this majority opinion is concretised into this belief, all those who wanted to buy shares would have already bought them. This in turn, means that prices have risen to their peak levels. Now comes the crunch. Though crowd expectation is that the market will continue to rise, prices cannot really go up any further as there are no buyers left in the market. This is the stage at which all the positive factors would be discounted by the market. The result, the sellers would start dominating the show from this point. In these circumstances, share prices can only fall. This is where the theory about swimming against the tide can be one of the most intelligent moves which can give rich dividend and you can make money in the stock market easily and with fair amount of certainty. If an investor now takes a contrary view to the general one and starts offloading his holding, he can make a neat profit from his stocks. The investor must, therefore, anticipate the crowd behavior and know exactly when to go his own way to get maximum advantage out of the above theory of making money in stock market fast from his stocks.

In short, the mechanism behind this innovative theory on 'how to make money in the stock market in a sure and easy way’ is, when the crowd expects the stock prices to rise, it will fall and vice versa. For the strategy to work, timing is vital. The process can work effectively only when the majority opinion has joined into a noticeable trend. Until a large number of people have settled down to a particular view of the future, the theory does not work. In fact, before this point is reached, the investor might actually do better by going along with the crowd.

How to apply the theory to make money fast in the stock market

Consider this hypothetical example: One ABC Company is being quoted at $10 and the crowd believes that the price will shortly rise to around $15. Initially, buying pressure in the scrip will shore up the price to around $13. However, there is unlikely to be any rise after this level. Purchases at $13 will be considered unattractive, as the share is expected to reach a peak of only $15 which does not make for high profits. Thus, the price of the scrip is unlikely to cross $13 and reach the expected level of $15. It is the reaction of the crowd, which prevented the expected development from materializing. Then how should an investor in this situation use the above intelligent theory of 'contrary opinion' as a strategy of making money in stock market fast? He should buy the shares at $10 along with the crowd (or before them) and wait for the majority opinion to take a tangible form, in other words, let ABC Company touch the $13 level. At this juncture, when the crowd is expecting the scrip to rise further to $15, the investor should go in the opposite direction, sell, and book profits. Thus this smart move offers him a unique way for making money from his shares easily, while the crowd waits for the scrip to touch $15. Actually, the scrip will never touch the anticipated peak. After stagnating at around $13, it will start going downhill swiftly, as disappointed investors start unloading.

Conclusion

Now that you know this unique theory about how to make money in the stock market fast and easily without much risk does this mean that the theory is an infallible one? Not really, for, like every strategy, this one has its pitfalls as well. The deepest among these is the possibility of not identifying the majority opinion correctly. What's more, the very simplicity of the theory is itself a danger. For, the investor often takes a different course simply for the sake of being different and that can lead to disaster. There is one important ground rule to pursue this strategy of making money on the stock market - the investor should not wait for the anticipated peak or bottom price levels, because they may never materialize. In the end, it can be reasonably assured that buying in a depressed market and selling in a boom should see most investors realizing gains and cutting down on losses.

To conclude, I need to make it clear that there may be several ways of making quick money from stocks like day trading or by pursuing margin trading, forex trading etc, but getting rich is just not going to happen overnight. It would, therefore, be far more sensible to spend your time and energy in researching and understanding the stock market operation in order to learn the time tested reliable methods for making money and gaining wealth on stock market.

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Comments 17 comments

wandererh profile image

wandererh 6 years ago from Singapore

One way of identifying the top of a stock market boom is when you hear the dentists and the taxi drivers talking about it. At this point, it is highly probable that the "smart money" are already fully invested and just waiting to sell into strength.


radharenu profile image

radharenu 6 years ago from India Author

You have explained the vital factor in the theory i.e 'theTiming', in a nice way by the example! Thanks.


dablufox profile image

dablufox 6 years ago from Australia

Your theory is spot on, the key like you have said is timing. I have found that if you study a company and do in-depth research you can come up with the company's true or intrinsic value. The company's share price will extend higher and lower than this true or intrinsic value.

Think of a ball threaded with an elastic rope, if you jerk the rope the ball will extend up then rebound down, the mid point is the intrinsic value point.

If you can identify the true value of a company then all you have to do is look out for news which might affect the stock and track the price movements, when bad news come along and everyone sells the stock wait until the stock becomes cheap to its intrinsic value, when some good new comes along and the market being the market will overact and overbuy the stock making the stock overpriced you sell.

You will never get the 'exact' bottom or the 'exact' top so aim for 70% of the price movement.

At the start of using this contrarian type strategy you may well make a few mistakes, but the more you use it and learn how to read how the market over reacts to news, its not all that hard to make money.

The main tips are don't get greedy, stay calm and logical, be patient and anticipate the market and plan your trades well in advance.


Brand Bank 5 years ago

Much appreciated, thanks for sharing such a lucrative info along with us !!!


AllSuretyBonds profile image

AllSuretyBonds 5 years ago

Great Hub. Very useful information for someone looking how to make money in the stock market. I agree with you that the investor must anticipate the crowd behavior and know exactly when to go his own way for making money quickly from his stocks.


radharenu profile image

radharenu 5 years ago from India Author

Hi,Bond

Thanks for your comments.I myself have been benefited by the unique theory in the past!


chamilj profile image

chamilj 5 years ago from Sri Lanka

Professional investors will not follow the crowd.They will do their own research before they invest.

Great Hub thanks for sharing!


radharenu profile image

radharenu 5 years ago from India Author

Hi,Chamilj

Thanks for your comments.


prakashkl profile image

prakashkl 5 years ago from India

Hai

You have a described a complex theory into simple one so that even a lay man can understand. I am investor for 10 years. Good hub.


radharenu profile image

radharenu 5 years ago from India Author

Hi,prakashki

Thanks for your comment.


Stock Tips 5 years ago

I can see that you are putting a lot of time and effort into your post.I love every single piece of information you post here.and great tips to make money fast,Will be back often to read more updates!

Stock Tips


Stan 5 years ago

Perhaps a great article for newbies... but for anyone who has ever traded anything, "duh".


radharenu profile image

radharenu 5 years ago from India Author

Hi, Stan

Thank you for your comment.


indian stock market tips 5 years ago

I read your post . it was amazing.Your thought process is wonderful.The way you tell about things is awesome. They are inspiring and helpful.Thanks for sharing your information and views.

indian stock market tips


Gold Silver Tips 5 years ago

I absolutely adore reading your blog posts, the variety of writing is smashing.

This blog as usual was educational.

Thanks for sharing this information.

Gold Silver Tips


monicamelendez profile image

monicamelendez 4 years ago from Salt Lake City

Very interesting theory. I saw this work in a huge way in the housing market my my area. Everyone and their dog was trying to buy a house at one time. Eventually everyone who was going to buy one bought one and at that point, the market crashed big time. There wasn't anyone else who wanted to buy!


radharenu profile image

radharenu 4 years ago from India Author

Hi, Monica

Thank you for stopping by and making comment. You have given a very good practical example to explain the vital factor of the theory i.e 'the Timing'.

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