Stocks that fall sharply must move up sharply

Many investor are more comfortable purchasing a stock when it going down rather than it is moving up. If a stock make its lifetime high at $1000 and then fell back to $500, the somehow many amateur investors assume that it should move back to the previous height of $1000. The reality is completely different. If you carefully moor the traded volume of the stock, you will realize that in 2010, many new investors took fresh positions, primarily because of the hope that it will regain its glory. The name applies to other real estate stocks. Throughout 2010, many investors took a fresh position in infrastructure and real estate stocks just because of their previous glory. Do not get lured by the stock price that movement has nothing to do with the past price.

The sharp fall in stock in the first sign of trouble. If a fundamentally strong stock goes through a 10% to 20% correction, it may not be a cause of concern. However, a price correction of more than 60%, indicates a red signal. Unless you have enough conviction, do not invest in my stock that suffered more than 60% price correction from their recent peak.

Stock that fall sharply must move up sharply, this single dangerous misconception has been continuously causing severe losses to retrial investors for a long time.