Just to be clear, there is nothing wrong with trying to figure out the why. It is more to do with: first identify a share that is a good long-term investment, then develop a strategy whereby whether it goes up or down, you still come out ahead.
Hence I am happy when a share goes up (it is a selling opportunity) and when it goes down (it is a buying opportunity). I just avoid issues such as 'do you think it has hit the bottom' or 'do you think it has peaked?'
A friend once coined the phrase 'red noise' which is a loose metaphor related to Brownian motion. The theory is that no matter the random movement of a share price (white noise) there remains a restoring 'force' which causes the share to also target toward the 'fair price'. In the case of blue-chip shares 'fair price is generally well-known by the application of accepted formulae. In the case of speculative shares the fair price is unknown. Therefore for blue-chip shares volatility trading opportunities are limited (and best applied when there is a crash). Volatility trading is far more appropriate for shares such as DRO - where people have a wide divergence of what is the fair-value. Anyone who has been following DRO would realise that for some people a 'fair price' is about $1.20 whereas for others the $2.50+ price is also 'fair'.
I am not specifically advocating this strategy - other than to say I have done well out of DRO by using it. But clearly if anyone can predict the bottoms and the peaks then they will have huge advantage. I just think this is not possible.
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- DroneShield Ltd. (DRO:ASX; DRSHF:OTC): Is It Time to Buy Again?
DroneShield Ltd. (DRO:ASX; DRSHF:OTC): Is It Time to Buy Again?, page-17
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Last
$1.40 |
Change
-0.090(6.04%) |
Mkt cap ! $1.067B |
Open | High | Low | Value | Volume |
$1.51 | $1.51 | $1.36 | $35.85M | 25.56M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
16 | 139470 | $1.40 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$1.41 | 14 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
11 | 27470 | 1.400 |
1 | 1101 | 1.395 |
4 | 38584 | 1.390 |
4 | 20414 | 1.385 |
9 | 17542 | 1.380 |
Price($) | Vol. | No. |
---|---|---|
1.410 | 14 | 1 |
1.420 | 114259 | 4 |
1.425 | 43587 | 3 |
1.430 | 24000 | 3 |
1.435 | 25215 | 5 |
Last trade - 16.10pm 26/07/2024 (20 minute delay) ? |
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DRO (ASX) Chart |