Buy at low, Sell at high - really?
Vimal Venkatachalam ??
30,000 Connections | Think Big, Aim High, Work Hard, Fly Higher.
The idea of "buy at low, sell at high" always gives me a chuckle:)
What does that mean?
This is how it's projected by many technical analysts: "Hey, it's so simple. When the price drops to its lowest, you should buy. Then when the price rises, you sell your position and you make money… easy money.”
But how do I know if I'm buying at the bottom?
"Take a look at the chart... you have great indicators like the RSI, Stochastic, Bollinger Bands... it's easy to spot oversold levels and buy at the bottom or find overbought levels and sell. Do you get it?"
Oh, really?
Let me explain this concept to all of you with a real example:
"Look, this is what I meant. This must be the low, buy now while the price is really cheap."
...but...
...it doesn't workout.
"Hey, no worries, it happens, but now you have a chance to buy even more at an incredibly low price! You can't miss this! Buy when it's cheap!"
...but...
...events unfold differently.
"Alright, it can't possibly get lower than this. I'm 100% sure this is the low, it's time to buy."
...but...
… things go in a different way.
Do you want to see how many times it goes wrong on this chart?
“Buy low, sell high”… it's kind of like saying "earn money easy".
Uh... okay… but how?
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