[Summary]
Ask the market about the market price is a way of thinking that emphasizes market price movements more than your own predictions.
If you replace ``Ask the Market, Ask the Market'' with actual examples, it will be easier to see the difference between situations where it can be used and situations where it is difficult to use.
In actual investment, we first start by checking the price, volume, and trend reaction from the material. However, it cannot be overlooked that simply following price movements tends to lead to groundless short-term buying and selling.
In this article, I will explain the concept of asking the market as a procedure to check before buying or selling, rather than as "knowledge". Don't rush to conclusions, read according to your financial amount and time horizon.
First, divide the market price by asking the market price.
When looking at market prices, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. You can ask the market price, but it is not the only material to make a decision. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Ask the market about the market price using a practical example
As an example, when looking at market prices, first make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
Checking the following points will make things a lot easier.
| Axis to check | Find out the market price by asking the market price. |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
Asking the market price is not only a problem when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Listen to the market, but narrow down to one situation where it works well.
- Even if the price movements are similar, if the background is different, they are treated as different things.
- View not only successes but also failures using the same criteria.
- Check if you can reproduce it with your own amount of funds
The important thing here is to just ask the market and not settle on one correct answer. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Please check these five things at least before using "Ask the Market" as a basis for making an actual decision.
- Can you explain in one sentence the purpose of watching the market?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking the market is not to act faster, but to reduce unnecessary mistakes in judgment.
Summary
"Ask the market prices" is a material for organizing your investment decisions. Even if you read it as an example, your judgment will be inaccurate if you treat it as a standalone buy/sell signal.
The points to keep in mind are as follows.
- Listen to the market price and decide the purpose of looking at it first.
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. "Ask the market price" is not a word that forces you to make a hasty decision, but rather should be used as a tool to pause before buying or selling.