What is Bottom Fishing in the Stock Market?
★ SUMMARY ★
Hey It’s Sasha Evdakov and welcome to Tradersfly where I share with you some ideas about investing the stock market and also trading.
Now in this week’s episode what I’d like to do is share with you the concept of Bottom Fishing. First off what is bottom fishing? Should you do it? Is it important to do it? Does it matter if you do it? when is the right time to do it? So it’s all these questions are kind of running through your mind that’s what I’m going to try and guide you on in today’s video lesson.
First off what is bottom fishing? Bottom fishing is the act of trying to find the bottom of a stock and this is typically done with stocks that used to be at a higher price so let’s say a stock was at $100 and now it’s down at $10 if you’re trying to bottom the fish stock you’re trying to catch the bottom of it in order for purchasing it so that way it can continue moving higher or to the upside. Meaning in the end you’re trying to get a really good deal on the stock or get a lowest price or get a really good bargain on that stock.
Typically Bottom Fishing is a really bad idea unless you really understand what you’re doing and what’s going on and this is because novice investors or a novice traders people who are just starting out try to bottom fish and catch that low point of a stock and that stock just continues to head lower or never get out of that lower levels so just typically stays there is for years and years at a time.
Now I think right now we’re coming into an interesting time in the stock market having a selloff over the last couple of weeks and also showing some weakness over the last few months. You know it starts to become attractive especially on certain stock that used to be at a very high price and now that they’re much lower they start to get attractive especially if they’ve been selling off for multiple years but the problem with stocks that have been selling off for multiple years and if you’re trying to catch that bottom hoping that they’ll go back up to the upside is that there’s going to be a lot of overhead supplies there’s going to be a lot of people weigh up at higher prices just hoping and praying to get out at a higher price.
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