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