What is mean by Crowd behavior in Stock market
Technical trading is all about finding out where is crowd headed and following the momentum. The incessant struggle between the bulls and the bears is what drives market rallies and precipitates market declines.
Mania is a situation in which buyer’s buys stocks with emotional impulse, without regards to its intrinsic value or even whether they shall be able to sell it again later at a higher price. In panic situation exactly opposite happens. In panic peoples can’t sell the thing fast enough and willing to accept any price to get any money back at all. Experts love to use the word crash to drive the fear of God into the masses. What if you changed the angle of observance and took the view that stock market crashes represented once in a lifetime buying opportunities. In economic cycle, mania and panic comes few times but in traders profession it comes daily in his life. market cycles are visible in price movements that rise, fall
Each stock, commodity or currency has its own crowd and moving accordingly, if a smart trader figure out what pushes the buttons of the crowd then it gets payoffs.