Its an age old story in the stock, commodity, and forex trading world - the big trade that got away. As much as these tales might be a bit "fishy," more time is spent by analysts and traders trying to find the market catalysts behind big moves up or down in the markets than doing anything else. Not only that, but these big moves are highly emotional. You don't ever see the commentators on CNBC panting and short of breath because the Dow was up 30 points yesterday (although maybe these days they would be).
No, instead you see them ranting and raving about the big days when the markets are moving hundreds of points and fortunes may very well be made or lost. Big days are so important in the stock markets, that you could take the 50 biggest moving days and put them together, and they would equal the entire stock market rise since 1950! Getting on the right side of these moves is the elusive holy grail for traders, and try as they may, many never end up finding it.
Why is this? Well the problem that many traders and analysts never face up to is that the majority of their information, and hence judgement, is from hindsight. If they try to look at all of the information in press releases or company statistics, all they will see is news that has already been disseminated by the market. The real trick to get on the right side of a stock market catalyst is follow advice your mother probably gave you: to simply be at the right place at the right time. This is not an easy task, but there are software programs out there that have advanced capabilities of comparing stock movements to previous periods in which major stock market catalysts have occurred. The traders who have learned to make huge profits off these events retrained themselves to stop predicting, and instead, adopt probabilistic thinking. Imagine how much money you could make if you were just on the right side of a few of these major moves in the market!
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