Last Week's Lesson In Market Volatility

About a week and a half ago, the stock market fell almost 4%. Luckily last Monday, stocks rebounded, but questions remain about why the drop, and what repercussions it may have on the volatility of the stock exchange.

Today the exchange is larger and faster than it ever has been. That’s good for individual investors, because it allows for greater accessibility. Unfortunately, it has also made it more difficult to predict what will happen. That’s why more than two thirds of investors work in private hedge fund environments. These high frequency traders look out for their own investors and not the investors for whom they’re trading. When one firm placed a bet on losses, many other firms began to sell stock to protect themselves. This continued at an extraordinarily high volume, and trading systems became overloaded, taking two minutes to perform trades ordinarily done in seconds. The results were devastating. The markets didn’t fall too hard because companies who have cheap stock sniffing software picked up some of the day’s biggest losers, for a fraction of what they cost in the morning.

This is why uninformed day trading can be risky. If you want to learn day trading, a day trading course is a good way to get started. Learn day trading from the Trademark Academy, where informed professionals can help you make money.