Possibilities of making money on the stock market are everywhere, especially when you have a bit of experience and intuition knowing where to look and how to find the shares with potential for a dead cat bounce.
Riding to the top means identifying the big-profit buys, penny stocks and steady-growth stocks which are all used to define stocks in a capital market course. Sadly, stock markets and moneymakers follow a high-risk to the high-reward course and the dead cat bounce is one such opportunity provided you learn and know the technique behind it. Do you want to profit from a dead cat bounce? Then read on.
Catch the dead cat bounce:
Let’s define the dead cat bounce for you. When a stock suffers a large fall in price and this is sustained for a fairly long period and followed by the typical 3 false small jumps before it begins to rise in price it is called a dead cat bounce. The period could be a month; week, day or longer and also the possibility of prices not soaring to pricing levels set by you have both to be accepted as part of the game plan.
Define limitations:
Just some common sense advice on stock markets is that one needs to set limitations and also have a safety net. Obviously smaller stocks will have their own limits and larger stocks will need more space and larger limits. Remember you are setting the bottom levels of the dip in dead cat bounces and your ceiling limits should be just above the worst bottom-out point of the share price effectively meaning your per-share price should never dip below your limitations so you can make profits when it rises.
You also need to look out for the volatility rate of your stocks. This means you set ceilings for larger and faster bounces too. Ideally, you should buy-in at the first pit price of your potential dead cat stock. If the prices rise after this dip it is poor judgment. But if it follows the dead cat technique then you are a genius and can make money on the bounce. In tandem, one can exploit options like tripling or doubling the profits of the floor level or setting targeted sell-points for your stock.
Budget and buy:
If you have identified the bounce on the capital market course brace yourself for the money and check out if there is a minimum for the floating shares. Then buy if your observation shows dead cat bounce potential.
Quit at the ceiling price:
Getting out of a bounce means riding the wave till your price climbs back to your ceiling limit set and then either selling at a slightly better price or continuing to ride till the waves get too rough. Part of the judgment process is knowing when to quit. If you are an avid follower of the capital market course and choose to sell you would have made yourself a profit by smartly doubling the profits. But if the prices rise further you have potentially lost profits that could have been made. If you do not sell then you are potentially taking the risk to ride out another wave that could dip the prices below your ceiling limit and potentially cause you losses. You will land up in trouble for not selling and holding then.
Follow the dead cat bounce options:
Use your judgment when making your calls and don’t forget to check out the research on your investment. Use the current stock market news, real-world information on the management of the company, check for partnerships where the partners are doing swell.
Profits from a dead cat bounce:
Practice, research, and simulations on the trade market can get you prepared to make some great profits from the dead cat bounce. Once you learn well the dead cat bounce market is potentially excellent for small traders and for steady but smaller profits. Watch your step and timing as buying too early will see a dip in prices below your ceiling and buying too late can also lose your profits that you could have made. Well, it is all about risk-taking being associated with high rewards in a dead cat bounce situation.
Conclusion:
Opportunities abound even in a dead cat bounce on share markets. It is all about timing and risk-taking. You could always simulate the experience with shares that have such potential and learn from their shared values later. When ready with your simulated experience then hit the markets on the dead cat bounce. If you have the yearning to dabble in the share markets then the capital market course is a must for you. Try the Imarticus Learning Institute where your skills will be honed and you emerge career-ready.
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