Re: Some Questings About Market
I guess there are 2 reasons, the first one is during the market hours all the news/new data/info that hits the wires will be digested by the investors and priced into the tape slowly when they understand what the data means, but after the market close the market will not will not open till the next day, all the news about the companies then tries to get priced into the stock at once, (just like opening the dam gates),
the second reason is, there is a saying that the "markets are opened by amateurs and closed by the professionals", if there is a good news the stock jumps up 20% and slowly comes down to come down to 5% gain and if there is bad news about a company the -20% down then corrects to -5%, amateurs wants to buy at any price and sell at any price depending on news ,if there is buying or selling at market open the market may go against that during the day, but when you see heavy selling during the end of a day or heavy buying during the end of the day generally the next day will follow suit, "buy with the professionals and sell to amateurs.......the reason behind gap up/down r well explained by raosrinivas.
fortunately.....gap up/down.. fade trading r very useful .
normally amateurs get shock....as they have no plan to trade with it......instead they must write what to ..if gap up .....this particular value....again another set......if gap up another value......always .....watch by price and flow of market.........whether its diminishing or increasing........this is essence of strategic day trading
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oilman5