In the market, there is a phenomenon that is often discussed by investors: why is the **more** not rising? KCM Trade believes that this issue involves market psychology, trading behavior, and how capital markets work. In order to better explain this phenomenon, KCM Trade today takes a deep look at the principles and logic behind this problem.
Let's be clear, the market is driven by supply and demand. When the power of ** is greater than the power of selling, vice versa. Investors often play a role in the market because their ability to obtain information, professional analysis and financial strength is usually inferior to that of institutional investors, and their operations are easily affected by market sentiment, resulting in a certain degree of synchronization in buying and selling.
Next, let's talk about why it's not easy. An important factor is that investors often lack long-term investment strategies and patience to hold shares, and are more inclined to short-term trading behavior. This means that once the market is volatile, it is likely to choose to sell out of panic or the pursuit of short-term profits, which increases the pressure on the market and thus suppresses the stock price.
*Investors often make investment decisions based on some non-professional information or rumors, and this irrational investment behavior will lead to a disconnect from its fundamentals. When most participants in the market are chasing short-term gains rather than focusing on the long-term value of the company, volatility is more of a speculative nature than an increase in actual value.
Institutional investors, on the other hand, usually have more stringent investment processes and risk controls. They tend to conduct in-depth analysis of their holdings and make investment judgments based on company fundamentals and industry trends. This mode of operation allows institutional investors to better grasp the true value of the company, thereby driving the stock price back to its intrinsic value.
*Due to the small size of funds, it is difficult for investors to have a large impact on the market. Institutional investors, on the other hand, are able to form a certain amount of pricing power in the market due to the concentration of funds. As a result, in a market dominated by institutional investors, it is easier to reflect the true supply and demand relationship and the value of the company.
*Investors' emotional trading tends to amplify their negative effects in extreme situations in the market. For example, when the market is in the market, investors may sell heavily out of panic, exacerbating the trend in the market. And when the market is the best, they will chase higher because of greed, pushing up the top, forming the so-called "chasing up and killing down" phenomenon. This behavior not only harms its own interests, but also increases the volatility and instability of the market.
There are many reasons why the number of investors does not rise, including investors' trading behavior, market psychology, incorrect information, etc. However, this does not mean that investors cannot succeed in the market. By improving their investment literacy, establishing a scientific investment strategy, and managing their emotions, investors can also make steady profits in the market.
Having said that, KCM Trade reminds everyone that the market is a volatile and complex environment. Whether it is a top investor or an institutional investor, you need to continue to learn and adapt to changes in the market in order to succeed in this arena full of opportunities and challenges.