Many traders are eager to reach exactly the perfect entry and exit times, ie to “time out” the market.
Surely you have heard the story before:
A friendly investor has managed to buy a stock at (local) lows, hold it for a while and then sell it at highs. He proudly tells you about his coup.
With awe, if not envy, listen to his story. This strategy is called “timing” the capital market.
In order to “time” the market, investors often use technical analysis indicators such as up or down trends, evaluate economic fundamentals or rely on luck.
Many investors are eager to reach exactly the perfect entry and exit times.
Accordingly, the frustration is great if you do not succeed.
And since it rarely succeeds, many market timers are frustrated and withdraw from the stock market.
Not even Warren Buffett succeeds in timing the market
In the history of the stock exchange, no investor has ever managed to buy successfully at low prices and sell at high prices with various stocks over a stock exchange cycle, ie over a stock exchange cycle. ...CONTINUE READING