Market Rhythm

The stock, forex markets all have a certain rhythm. The rhythm of the markets.

Submitted by Trading Critic on Wed, 2006-08-23 14:13.
The stock, forex markets all have a certain rhythm. The rhythm of the markets.

Music is based on rhythm. When you listen to music, the beats become repetitious to some extent which allows you to predict the rhythm in order to dance with the music. The market also has its own rhythm. I'm not saying the market rhythm is 100 percent predictable, but for those experienced in the market - I'm sure you can attest to this. I'm also not claiming that trading is about prediction either (more on that in another blog post). But from my experience, the market has a rhythm.

If you are starting off or in a losing streak I suggest you do this: sit and watch the market fluctuate. Up and down. Watch every uptick and downtick. Do this for a few hours every day. Is there a pattern? Do some stocks or equities have a character or rhythm of their own? For the stock market, it is often said that the amateurs start trading in the mornings while institutional traders buy and sell in the afternoon. Go figure out the consequences of the statement and what kind of pattern that will make. Another benefit from this exercise is that it gets you into "the zone". Hopefully, by watching the ebbs and flows of market prices you may be able to figure out the market rhythm.

After watching your stock charts for a while you may start to feel a little bored. So what should you do to keep interested? Put a little bit of money into the market. Money that you can afford to lose, just enough to keep you interested, but not too much that losing that money would hurt your hip pocket. Trust me, (for the uninitiated) when you have any amount of money on the markets, your heart will jump with every uptick and sink with every downtick. Is this trading fine? No. Another thing about trading is that it is very much like gambling. And gambling can be intoxicating. The point here is that you should set aside your emotions when you trade - if you don't, these distractions will seriously impair your ability to recognise market rhythm.

As you learn more about the fundamentals of trading as well as various technical indicators, your experience with watching market moves will serve you well in moving in time with the market rhythm. Good luck in your share trading, forex trading or whatever market you participate in!

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