Learning to profit from the stock ticker

The stock ticker divulges plenty of information. It reveals the latest trading activity of a stock. The stock ticker includes the number of shares traded so far, the latest stock price and whether the stock is heading higher or lower. Within the stock market, there are plenty of dynamics going on. It could be due to market forces or company specific factors. Either way, major price movements as revealed in the stock tickers means opportunities for the stock trader.

The smart trader knows that there are several forces influencing the equity markets and specific companies. One of the most important factors the trader should follow is investor sentiment. Stock prices can overshoot, whether up or down depending on the mood of market participants. For the investor that has done their research and has a game plan, they can profit from the volatility in stock prices. The best way to make money in the markets is to be on the other side of the trade as crowds rush to put through their stock orders.

During times of excessive greed, everybody rushes in to buy stocks, not wanting to be left out of the attractive returns. Stocks in this situation get overpriced. The smart investor is selling into these markets or even shorting the most expensive stocks. Once the buying has been exhausted, the markets will begin to drop. When the stock markets are subject to fear, just about all stocks are being sold off. Investors just want to get out of the markets regardless of the company’s outlook. This provides plenty of opportunities for the astute investor to snap up shares at very attractive valuations.