[Summary]
Ask the market about the market price is a way of thinking that emphasizes market price movements more than your own predictions.
Merely remembering the meaning of "Ask the Market" is not enough to make actual buying and selling decisions. You need to look at the context in which the words are used.
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.
Putting the meaning of “ask the market” into practice
If you look at the meaning of "ask the market," then first of all, the premise is narrow. 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.
- Do not use the definition of ``ask the market'' as a buy/sell signal.
- Separate the meaning, situations in which it is used, and situations in which it is not used.
- Check only one difference between similar words
- If you cannot explain it, reduce your position.
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 a meaning, 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.