Trading Strategy: Recognizing Market Bottoms Through Panic
25 Jul 2024
A trader explains how panic signals market bottoms and what distinguishes tops from bottoms. When fear peaks, that's often when markets are closest to reversing upward.
A trader explains how panic signals market bottoms and what distinguishes tops from bottoms. When fear peaks, that's often when markets are closest to reversing upward.
And I've done a lot of work over the years on panic. Panic only happens in one one area, and it always comes at bottoms. If you don't have panic, you don't have a bottom. So if the market's going down, there's no panic. That market's going to continue down until it does get panic. And panic is basically big downswings with big volume. If you start seeing that, you're seeing panic, and that's an opportunity. And how long panic can last? Usually panic lasts a very short period of time compared to tops. Tops can take weeks, months, you know, sometimes even years. But most times weeks or months. Bottoms happen in a day or two or three. It just totally blows out to the downside.
