What is the difference between a stock market "crash" and a regular fall in a stock?
Friend,
To understand a stock market crash and a regular fall, we must first understand the ideal move of the market. Ideal move means how much a stock normally rises or falls on a daily basis.
I have been in the market for about 9 years, good and bad. Full time is about 6 years. During this time, I realized that most stocks generally show a daily rise or fall of 1-2-3 percent.
In such a situation, we can address a rise or fall more than this as a crash or rally instead of a normal rally.
On the other hand, if we talk about the index, excluding the gap, it regularly shows a rise or fall of 0.80-0.90 percent most of the time.
In such a situation, if there is a rise or fall of more than 1.50 percent, then we can call it a rally or crash. Just keep in mind that this percentage is excluding the gap.
If we look at the market theory system, then according to the exchange, whenever a stock shows a rise or fall of 20 percent on a daily basis, it is considered a very good movement and trading is stopped after that.
I hope you got the proper answer.
Thank you
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