Up Trend & Down Trend

When someone ask me why prices went up for that stock? I usually will answer – more buyers than sellers. I think the answer is not true. The number of trading is always equal. If you want to buy 5 lots of share A, someone must willing to sell the 5 lots of share A to you & vice versa.
I came to a conclusion that prices move up or down is because of changes of the intensity of greed & fear amongst the buyers & sellers.

When the trend is up, the bulls don’t mind to pay a little bit more to get the share. The bulls feel optimistic on the share will rise even higher. The bear think that it is a time to take profit with higher price and get tense in the uptrend; bears that are more fearful & defensive start to sell. The stock prices rally. As long as the bulls have strong feeling & enthusiastic on the stock, the price will keep going up.

When the trend is down, the bear think the stock not going to hold the price, they throw the position on hand with lower prices as long as get out fast to sideline. The bull are fearful and will only agree to buy when the price only at certain discount from the market price. As long as the bears think that the selling out at lower price is the wise move. The downtrend will continue.

Do you agree with me fear is stronger emotion compared to greed?

Successful traders need to obey the below: -


1. Analyze the balance power between bulls and bears as crowd psychology.
2. Practice good money management.
3. Personal discipline to follow trading plan avoid emotional bond with the market high/ low.