You will be surprised to know exactly as humans do. Here's a fascinating story with 3 case studies that explains how stock undertakes a multi-bagger journey just like human beings undertake effort to climb a steep mountain. Read the complete story
This post is only for Science of Stock Price Action Premium readers.
One of the question people ask: What is Science of Stock Price Action? How is it different from Technical Analysis? Well to begin with there is nothing Technical nor we do any analysis in Science of Stock Price Action.
The basis of Science of Stock Price Action: Stock Market is traded by human beings and hence human emotions and human behaviour play a big role in the movement of stocks. The best way to play this game is treat the stock like a human being and then read their behaviour.
Science of Stock Price Action is based purely on Observations. I watch stock as if I am watching a human being and look at its behavior from human psychology perspective. Human behaviour is quite predictable and it's same everywhere and it has been same for centuries and will remain the same. Example: When you scream FIRE FIRE...what do you expect people to do. Obviously they will panic and run. It's a natural human behavior. You will rarely find somebody who will run in the direction of fire to validate whether it's true or not.
How can one watch stock behavior?
There is CCTV that works in the market that records all the activity of the stock. The footage of the CCTV gets recorded in Charts. The Chart gives you one basic information: What is market/stock trying to do. Based on what you see, the whole idea is to look for a human behavioral pattern and make a judgment on what can happen.
It's from this perspective, I have written a new chapter: How stocks try to Climb a Steep Mountain? Read the complete story
Science of Stock Price Action Premium
There is a logic that stocks follow when they make big moves. I have tried, to sum up, those concepts in a methodology called Science of Stock Price Action.
If you find my work interesting - I will encourage you to buy the book and access Premium Case Studies. The idea is to demonstrate live how patterns unfold and work. They succeed, they fail but the whole process is real fun. I invite you to be part of it.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers