[umfan92]

Well I noticed that the market has good days and bad days. I also noticed that on the bad days, all the stocks on my watchlist go down, every single one of them. And on the good days, every single one of those stocks goes up. Why does this happen? What does it mean? Also what are indications of this behavior? Thanks everyone.

[MadMarketScientist]

Hi,

It appears there is strong correlation between the stocks in your watchlist. Are they all in the same sector (i.e. all tech stocks) or in related industries? (commodities, energy)

See these threads explaining the correlation (beta) of a stock: http://www.traderslaboratory.com/for...eta-stock.html

Good luck
MMS

[Tams]

Originally Posted by umfan92 »

Well I noticed that the market has good days and bad days. I also noticed that on the bad days, all the stocks on my watchlist go down, every single one of them. And on the good days, every single one of those stocks goes up. Why does this happen? What does it mean? Also what are indications of this behavior? Thanks everyone.

you have just discovered the holy grail.

and I am not kidding you,

most people spent over 10 years in the market and still have not observed this phenomenon.

You see, you don't need to be smart,
you don't need to go to the best business school,
you don't need the fastest computer,
you don't need any esoteric analysis,
you don't need any insider tips,
all you needed is to get on the train,
and ride the wave.
When the market is going up, every idiot is a genius.
just close your eyes and buy...
it doesn't matter if the stock is ABC or XYZ,
when the market is going up, every Tom Dick and Harry will go up too.

Good luck
and enjoy the ride.

[SIUYA]

Originally Posted by Tams »

when the market is going up, every Tom Dick and Harry will go up too.

Good luck
and enjoy the ride.

you just need to get out of the car before Tom, Dick and Harry drive off a cliff.
So what if you get out a little too early and have to walk a few miles its better than getting killed - in the market.

Alternatively change your watchlist

Unfortunately when it comes to stocks, Tams advice can actually be pretty much spot on.....take a simple strategy, apply it to a basket of stocks - often they will all move together and you have diversified your individual instrument risk and yet still ideally get the most out of your strategy.

[umfan92]

This is all so confusing. I'm trying to learn but I honestly don't have a clue where to start. I read many articles and I just recently got a couple books, but I still don't think I'm doing it right.

[Pony]

I don't think of it as much as a phenomenon. I was watching this stock for a while, and I was 100% sure that it was going down, (I was swing trading, not day trading), so I went short. I woke up and updated my stock list on my phone. All my stocks were up (even the ones I was long in, so I didn't really loose anything that day.) Then I wanted to find out why, so I typed this in google, "Why did stocks go up today" and it said economy is doing better than economists predicted (in not so many words). All stocks are connected. The internet bubble is pretty famous. Were those stocks worth that much? Not most of them, maybe not any of them, but people felt good and that makes them buy. When people see the majors like Dow, etc. go up, they feel good and buy other stocks they've been watching. At least that's my theory.

[MadMarketScientist]

Originally Posted by umfan92 »

This is all so confusing. I'm trying to learn but I honestly don't have a clue where to start. I read many articles and I just recently got a couple books, but I still don't think I'm doing it right.

Yes the learning to trade the markets can be confusing. I would recommend sitting down, WITHOUT a computer, and just write down what you want to achieve. And then break it down into small tasks that can be done in a day or two. Information overload is a serious problem in this day and age of the internet and I am convinced it can sometimes be a time-suck! See this thread ... http://www.traderslaboratory.com/for...ation+overload

MMS

[SIUYA]

Also when it comes to learning - for the time being put away what the daily papers tell you....they will only serve to confuse more. Once you have formed enough of your own ideas, then the headlines might be worth reading again.