Stock Market Battle: Fear vs. Greed and What it Means
★ SUMMARY ★
I want to cover the concept of fear as well as greed. These to forces really oppose one another. When the market is in fear, the market is usually tanking and going down. When the market is in a greed state the market is skyrocketing or going up.
So these two forces are always going back and forth. People talk about fear versus greed but really it comes down to the psychological part of the fear and the greed.
Looking at the fear and the greed
I like to look at fear and greed in terms of spectrums. Spectrums are just a nice linear way to look at things. So it can be a simple line and on one side you have fear and on the other side you have greed. If we talk about it in a different way for example love and hate or it could be looked at in terms of black versus white and in the middle you would have gray.
When we have fear and greed in the market you basically have the market being on one side or the other because the market is not in balance. The market is usually shifting towards one end or the other. So it is either going up a few points, down a few points then when it goes too far towards one side it will balance back out to the other side having a seesaw effect.
The problem with this is that when the market is in perfect harmony the market does not move. But you will only see this very rarely. Usually this does not happen. Usually the market will move up or down at least one point. I do not believe that the market has ever opened at one price and closed at that exact same price because for that to happen no trades would have taken place.
Posted at: http://tradersfly.com/2014/06/stock-market-battle-fear-vs-greed-means/
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