How do we Know When the Market will Crash
Before the coronavirus pandemic, one question a lot of people ask is “When will the stock market crash?” A lot of people have predicted dates and years. Amazingly, if there wasn’t a pandemic, I am sure there might be no market crash this year. This question might have uncertain answers but the truth about it is this, the Market always have a period of greed which is the bull market, a period of fear which is the time for the bear and a period in between for content when the market is stable.
No one knows when there will be a market crash, in fact, after this pandemic crash, no one can say when there will be another crash in the market as it is uncertain and cannot be predicted. The market has been a history of falls and crashes from black Monday which crashed by 22% in one day, the great depression, and so on. We can’t say there will be a market crash in any day but it is true there a market crash often occur between 8 to 15 years. There was a market crash in 2008 (the housing bubble) and 2020. History shows these things.
News is another big thing that affects the stocks market and can determine when the market will be dropping. If a smart and verified investor make a statement about the market not in good shape, then be sure the market will surely be in bad shape. Also, when geopolitics get involved in stock market in a negative way, then it will surely affect investors trust and will lead to people pulling out funds in fear.
Source
Dates do not often tell when the market will crash in a country all time as dates are not always correct. Another thing that can be used to determine a market crash is the unemployment rate. I heard a lot of people forecasted that there would be a market crash soon as the unemployment rate increased. Do not forget that when people do not have jobs, they remove their money from investment so they can get the basic things and when the people without job is on the high, people start to lose trust in the economy.
Interest rates in government bonds is another thing that determines the price of stocks in the market. When bonds are not having good interest rates, investors move their money to the stock market which causes a bull run but when the interest rates in bonds increases, the stock market drops because investors put their money in bonds.
It isn’t always easy to understand the market but understanding history and things surrounding it is one thing that helps determine if there will be a bull run or a bear market.
Reference
https://michaelsincere.com/7-ways-to-identify-an-imminent-market-crash/
https://investorjunkie.com/investing/5-signs-of-trouble-in-the-stock-market/
@futurekr we cannot predict when the market will crash. But we can always be prepared for the same. As some bad news will be coming we need to prepare.
Some good history understanding may just prepare us for the future.
I consider investment very risky and something no one can really understand completely but going through history of trades could give us an idea on what could happen in future except for the fact that unforseen pandemics may also show up (though*).
I agree with unforseen pandemics just like covid-19, no one was really expecting any major hit like that.
good tips to try to recognize when the market goes down It is a complex issue, but I appreciate your recommendations that are very valuable!
Thank you friend.
Congratulations! Your post has been selected as a daily Steemit truffle! It is listed on rank 20 of all contributions awarded today. You can find the TOP DAILY TRUFFLE PICKS HERE.
I upvoted your contribution because to my mind your post is at least 1 SBD worth and should receive 24 votes. It's now up to the lovely Steemit community to make this come true.
I am
TrufflePig, an Artificial Intelligence Bot that helps minnows and content curators using Machine Learning. If you are curious how I select content, you can find an explanation here!Have a nice day and sincerely yours,
TrufflePigI need a good link on high level trading bots.