The Secret To ASX Share Trading: Strike When The Iron Is Hot
Many people want to know the secret to ASX share trading, the one magic method that will make them their million dollars so they can go live on an island in peace and luxury.
Well I hate to burst the bubble on this, but one: a million dollars ain’t what it used to be.Â Current academic research has shown that a person will NEED a million dollars in cash and to own their own home to simply retire on a modest income by today’s standards.Â And two: there are hundreds of different ways to trade ASX shares and they ALL work.Â It’s just a matter of finding a method that works for you.
Having said that, there is one underlying principle that when used correctly can increase your yearly returns by up to 20% or more.Â It is very simple to do, and doesn’t need any special programming or software.Â Just a simple price chart is all you need, and you can find that for free on Google or Yahoo!
When ASX Shares Move, They Move Together
There is an underlying flow to the stock market, and this is true on the ASX (Australian Stock Exchange), the S&P 500, the Nikkei, FTSE, or any other exchange around the world.Â Shares have a tendency to move in a similar flow.Â When money is flowing into the market, the market rises.Â When money is flowing out of the market, the market falls.Â And even though there may be companies doing well, reporting solid earnings and moving ahead in their industry, it doesn’t mean a thing if there is no big money around to buy the stock.
There are a lot of underlying factors that can affect when money flows in and out of a market.Â Often Government policies can affect certain industries with benefits or additional tax.Â There might be a recession looming, or higher interest rates meaning people are saving more.Â All of these can relate to economic principles that affect the flow of money.
A simple way to determine the flow of money is to simply look at the price chart of your local index.Â On the ASX, the All Ordinaries is a very popular index of the most ASX Shares.Â Determining when this index is heading up or down can give you a clue as to the flow of money into that market.
The ASX Shares Secret: Strike When The Iron Is Hot
So if we know that ASX shares tend to move together, it is a pretty simple assumption of what to do next, isn’t it?Â The phrase Striking When The Iron Is Hot refers to acting at the right moment, when the conditions are right.Â And our conditions for buying ASX Shares might be when there is money flowing into the market, when the overall market or index is heading upwards.
Not only does this “striking while the iron is hot” significantly put the odds of probability on our side, it can also help us result in less losses when trading our regular trading plan.
One Last Secret To Trading ASX Shares
Finding an upward market is one thing, but just remember there are different sectors and then many different ASX shares within that market.Â However looking at these thingsÂ is not for now, we will have to leave thatÂ for another lesson.
How Will You Tell The Market Is Going Up?Â How Else Can You Put Probability On Your Side?
What are your thoughts?Â Leave your comments, questions and experiences in the comments section below.
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