Daily buyer-seller battles. For stock markets to work, buyers and sellers agree and disagree! Some must believe selling a share is best while others think believe buying is better. To make something happen, they do agree on one thing, price! That makes markets work. This lesson explains how 3 guides deliver essential stock market information. Links at the end guide you to related lessons if you want to learn more.
Buyers and sellers agree and disagree
The stock market needs both buyers and sellers as well as both agreement and disagreement. To make the market work well we also need significant numbers of buyers and sellers willing to trade significant numbers of shares.
Both sides of a transaction must agree on price. Buyer and seller must each be ready, willing and able to close the deal. And they also must disagree! One has to think buying is the best idea, the other disagrees and thinks selling is the best idea.
The basic “that’s what makes a market” refrain heard in marketplaces means we can’t all agree. For a deal or transaction to happen, someone must want the opposite when we want when we buy or sell.
I hate it when that happens!
No one likes to buy a stock only to see it fall in value. Reports of analysts and politicians expressing doubts about the market or an industry can trigger selling. I look at the evidence, not just opinions. When not convinced the doubts are well founded, I stay in and do not sell.
However, if a stock and the market takes a large downward movement, selling is the only sensible thing to do. When convinced the market is not changing to a down trend, I stay.
Still an individual company can have problems or perform poorly even in a strong industry or market. That happened to me when all signals I use remained positive on the housing market and indicated the U.S. economy continues improving.
That means we have to have our research work done on the individual company as well as the industry and market. Then we also have to accept, we may get it wrong. When we do realize we picked the wrong team – sell!
There are thousands of examples of the market working to give both buyers and sellers what they want even while they disagree on the best thing to do.
In concept an open market exists when all players are equally informed and free to transact business as they wish. In practice imaginative humans quickly corrupt the system by developing ways to tilt the table in their favor. Security laws, regulations and bureaucrats address such issues.
The bureaucratic overseers have a thankless but vital job. Something like a police officer. We want them there to help when needed but we certainly don’t want their attention on us!
Protect yourself
Protecting yourself from fraud and corruption is an essential part of building your financial security. You must do all that you can to become aware and to protect yourself and your investments. You simply can not depend on the financial industry regulators to protect you.
Financial recovery from fraud remains infinitesimally small.
In general regulators and enforcers train and learn as administrators but they are not particularly streetwise. Business and stock market corruption is notoriously hard to prove and thus convictions are rare.
Should you have the misfortune of being victimized, recovery is all but impossible. Unfortunately even financial industry insiders too often get away with bad behavior. Few clients are ever fully compensated.
The very best way to protect yourself is to become an educated and informed investor. I will do my best to help you with that.
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Use White Top Investor lessons to learn investing. By doing that you can grow into a knowledgeable, comfortable and confident investor. To learn how, you can learn investing one small step at a time at your own pace. Do that and become the master of your financial security and independence. White top Investor never sells or shares our email list. Learn more.
Monitor Markets to Protect Wealth:
Introduction to Monitor Markets to Protect Wealth Lesson 1
4 Indicators muffle noise Lesson 2
4 Market direction drivers Lesson 3
Daily buyer-seller battles Lesson 4
3 Risk or opportunity signals Lesson 5
Look forward with data Lesson 6
5 Star market compass Lesson 7
Check market direction trends Lesson 8
Headline news market risks Lesson 9
Next lesson 5: 3 Risk or opportunity signals
Have a prosperous investor day!
Bryan
White Top Investor
[email protected] WhiteTopInvestor.com
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