Goofy Man,
Here goes the reasons for correction...
a) Some corrections are cyclical like the present one for reasons outlined before it started....(usually happens twice a year)
b) While some corrections are global in nature... and can get prolonged
c) ...and another type of correction could be because of our market having risen too fast & in very very short time.....
d) Yet another type of correction would be because of macro economics
e) while there are those that can be induced through instability of the government
f) Few sectors that go into correction are interest sensitives because of RBI policy change...on Interest and could be a shocker for some sectors... if the percentage move is more than market consensus
There are perhaps few more but can broadly categorized into one of the above
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Cyclical ones are perhaps.... better and can be anticipated with reasonable accuracy.
While rest of the others can come quite as a surprise...through a single bad event while our market is in session....or after market hours....viz. un-scheduled RBI announcing higher interest after market hours...& etc.
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If we are Long....& depending on the Margin of Safety built into a position or portfolio....giving up of some gains is inevitable...incase of negligible margin of safety.... incurring some loss is just as inevitable.
Key to what is required is what separates a Successful Trader from one not so Successful.... is a fairly good assessment of the quantum of downside & If it can be accompanied by a fairly good Time frame..nothing like it... Sone Pe Suhaga..
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Whyyy...do I have this feeling you will pick something from the above for another one line query that will require 1000 line reply....
I don't mind the 1000 line reply...it will just have to wait...
Happy & Safer Trading
SavantGarde
Here goes the reasons for correction...
a) Some corrections are cyclical like the present one for reasons outlined before it started....(usually happens twice a year)
b) While some corrections are global in nature... and can get prolonged
c) ...and another type of correction could be because of our market having risen too fast & in very very short time.....
d) Yet another type of correction would be because of macro economics
e) while there are those that can be induced through instability of the government
f) Few sectors that go into correction are interest sensitives because of RBI policy change...on Interest and could be a shocker for some sectors... if the percentage move is more than market consensus
There are perhaps few more but can broadly categorized into one of the above
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Cyclical ones are perhaps.... better and can be anticipated with reasonable accuracy.
While rest of the others can come quite as a surprise...through a single bad event while our market is in session....or after market hours....viz. un-scheduled RBI announcing higher interest after market hours...& etc.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If we are Long....& depending on the Margin of Safety built into a position or portfolio....giving up of some gains is inevitable...incase of negligible margin of safety.... incurring some loss is just as inevitable.
Key to what is required is what separates a Successful Trader from one not so Successful.... is a fairly good assessment of the quantum of downside & If it can be accompanied by a fairly good Time frame..nothing like it... Sone Pe Suhaga..
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Whyyy...do I have this feeling you will pick something from the above for another one line query that will require 1000 line reply....
I don't mind the 1000 line reply...it will just have to wait...
Happy & Safer Trading
SavantGarde
Thanks, Mr. SG
Relax! Quell the fear of seeing the ghost of my 1 query=your 1000 line!
Let me think aloud so as to assimilate what you said from a) - f).
That all these 'may be or sure' factors basically create uncertainity in the market. And uncertainity is the harbinger of fear - i.e. fear of unknown. Thereby, disturbing the balance of Demand and Supply of stocks getting traded. Supply side suddenly wants to dump the stocks cheaper, as it was bought on Baba Aadam prices. The Demand side freezes up in equal proportion, and refuses those cheaper scrips. Supply side, already jittery, offers further discounts. Demand side gets more skeptical...and the downward spiral begins.
And so on...and so forth... Did I get it right?
