http://klsetrend.blogspot.com/2011/11/volume-irrationality.html


VOLUME = IRRATIONALITY

When you see volume bars, when you hear people tells you volume, when you read about volume commentary, remind yourself that VOLUME = IRRATIONALITY.

When the volume start to increase and explode, it is IRRATIONAL EXUBERANCE. You can decide to join the MAD and DRUNK crowd or you can wait for rationality to return.

Human has extremely short memory and all time contradict or defy logic. To compound and aggravate the madness, you have blogs, newsletter paid or free site promoting "volume goes with trend" mantra.

Quite sometime ago I have written how irrational people especially half past six novice and amateur Technical analyst will continue to hymn and chant this mantra. The more famous and well-known self proclaimed guru is not exempted from being disqualified from the crowd. In fact they yearn and want to be part of the crowd. Sense of association and belonging.

According to books When price rises with higher volume, it is sustainable trend. Now how does higher price relates to affordability. ZERO! Your purchasing power drops!!!! Why does more people join the fray as the affordability drops? I don't know but the only one word that explains is IRRATIONAL. Now you understand why I mock the supporters of Trend is supported by Volume. They are misguided people who parrots each other.

On the same token when price starts to drop, the volume increases. Majority of the people seems to enjoy selling lower. Why wait for price to drop and start selling? Why not start selling before price drop lower? Utterly, IRRATIONAL.

Have you trying playing turkey crow? Next time if you have a chance try it on turkeys. Go near them and crow like a turkey. The next thing you know is the whole group of turkey will crow like you!!! This is what I use to do as a kid each time I go back to my hometown during school holidays. The turkeys will crow when they hear the sound irrespective it is human or turkey originated.

How does that related to the "gurus"? They are all like turkeys!!!!

CROW LIKE TURKEYS AND DO LIKE MONKEYS.

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One of my e-tratles mentioned this blog and I took a peep. He is good and I do like his blog quite instantly. Good things are meant to be shared!!

Now, how this post attracted me most? Because congrats ... KLSE registered the HIGHEST volume with RM3.3b turnover. Incredible, right? Now you know why we say market is irrational?

Time to sleep and counting sheeps.

Night.

TEH