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stock are traded in millions of separate transactions in the United States alone. |
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Here's the miracle: Every single one of those trades had a buyer who believed that the price was going to increase, and a seller who believed that the price was going to decrease. Imagine that! At exactly the same time these two people held exactly opposite beliefsand one of them was totally wrong. |
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How can so many millions of people, with exactly opposite beliefs, come together in the market every day? Our markets really are a miracle! |
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Let's start by stating the obvious: stock prices can only do three thingsgo up, go down, or stay flat. See Figure 12.1 to see how these movements are charted. |
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Now we need to understand what causes stock prices to move. |
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Figure 12.1
Stock Price Movement |
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