Stock falls on profit taking?

[deaddog]

It's a term you hear all the time when a stock falls for no apparent reason, or when a stock falls after what many consider to be good news.



It seems strait forward enough. Investors bought lower and are now selling and taking their profits. Good for them; Isn't that what you are supposed to do? According to Will Rogers; "Don't gamble with your money, just buy some good stocks and when they go up, sell them" Take Profit!!!



If we are holding a stock that has started to go down because of profit taking, should we be concerned? Should we be taking profits at this time?



Who is taking profits? Is this the so called smart money that feeds off the retail investor?



What do these guys know that we don't? There seem to be enough of them to drive the price down. It's not just Joe Retailer putting some money in the bank



At what point does a decline stop being profit taking and start being stop losses being exercised? Or turn into one of those stocks you call long term investments.



Is "Profit taking" just investment speak for "the price is falling and I don't have a clue why, but because I'm supposed to know I need a term that is very vague and makes sense to the masses" or is it more like "Hold" and means "don't sell yet we want to buy your stock later at a lower price"?

 

[qlai]

All of the above.

 

[VEGASDESERT]

Is "Profit taking" just investment speak for "the price is falling and I don't have a clue why, but because I'm supposed to know I need a term that is very vague and makes sense to the masses"

Bingo

 

[Raheel Shaikh]

If we are holding a stock that has started to go down because of profit taking, should we be concerned? Should we be taking profits at this time?

/QUOTE]

Depends on where you have set your profit target, partial and cover your capital incase you looking for securing some profits and let the rest run

Who is taking profits? Is this the so called smart money that feeds off the retail investor?



What do these guys know that we don't? There seem to be enough of them to drive the price down. It's not just Joe Retailer putting some money in the bank

Smart money is just a fancy name for a course, just an upsell.
supply and demand moving driving the price

 

[deaddog]

Smart money is just a fancy name for a course, just an upsell.
supply and demand moving driving the price

What do you mean it's a name for a course?

I'm convinced that smart money exists. Someone is profiting from the way the market moves. Who do you think is creating supply and demand?

You have to realize that the stock market is not there for you to make money. It's there for the people who run the market to make money.

Not unlike any other market, be it cars or food or clothing, you might be able to find an opportunity to take advantage of the way things are run, but the market was never intended to make money for the customer.

 

[murray t turtle]

All of the above.

%%
Agree;
mostly. EXCEPT ''stocks fall on profit taking/LOL''; partly true.
BUT stocks fall on panic selling \dumb selling, but that's bad public relations
Take profits yesterday?? NOT much @ all, buying more;
maybe more this week.
IF only money was smart money/LOL, but money has no brain; big banks may make money=sometimes/LOL not so smart...................................................................................... Single stocks need some kind of selling plan or buy 30-100 of them like DOW/qqq

 

[deaddog]

When you stop and think about it stock also go up on profit taking. Every time a stock sells at a new high someone who bought it cheaper is selling at a profit. It's just easier to make up stories that explain why stocks are rising.

 

[longandshort]

Yeah it's a bullshit phrase. Very few people know enough about market microstructure, order flow, and how to analyze information to accurately comment on why a stock price is down. Generally, you can assume volume side mismatch (more sellers than buyers) and when a clear catalyst (usually just lazy analysis) isn't known, the default excuse is "profit taking". In reality, it is more likely positioning in the options market, institutional order management, and short-term reversal factor but you must strip out the effects of a random walk and seasonality before drawing a conclusion.

 

[murray t turtle]

I'm convinced that smart money exists. Someone is profiting from the way the market moves. Who do you think is creating supply and demand?

%%
OK;
+ its a lot more, much more/ than any someone making money.
Meaning what ?? US capital markets are in a long term 200+ year uptrend , 100 +years of that before any FED was created......................................................................
Stocks fall on selling also, expect fake news to mention that ?? LOL.
Some fall on fraud\ ENRON or lousy management, poor business model\DAL...................................... Back to UPTRENDS,

 

[deaddog]

Generally, you can assume volume side mismatch (more sellers than buyers)

That's what moves price, supply and demand. Yet there is a whole industry built around telling a story because investors want to know why?

Imagine a CNBC talking head coming out and saying that the price of this companies stock fell today because no one wanted to buy at yesterdays price and if you wanted to sell you had to offer a lower price to find a buyer.