Despite the unforeseen global market as a result of the recent crisis in Japan, Australian share traders are anticipated to carry out better in the next six months. Close to 60% of these traders are positive about their improvement- no fears, doubts and uncertainty.

Based on the David Land, CMC Markets’ Head of Analysis and Education, “Optimism of traders is clearly influenced by the overall movements of the market, which is why we have seen an increase in the herd mentality in recent months. I think that the situation in Japan, although impossible to predict, should serve as a reminder to traders that trades should be based on their strategy and not their perception of what the rest of the market is doing.” Land also highlighted that the stock traders should never base their options in trading on the direction of where they think the emotion of the market is headed to.

When compared with July 2010, share traders intend to be a little more proactive in the next month or two. During the past year, about 33% of traders intended to be passive about their investments, especially now that figure dropped to 18%. This report was based on the survey made for share traders’ behavior.

Mr. David Land also said, “From previous surveys, it has become apparent that the further the market runs in either positive or negative territory then the more positive or negative sentiment becomes. However, this does little for traders’ ability to effectively time their entry and exit into and from their trades. The underlying lesson must be that traders need to have a concrete plan in place and not rely purely on their perception of market sentiment.”

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Filed under: General Stock Investment Information

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