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(continuing from ques )higher than the controlled price. does that controlled price become a price ceiling or is it simply a price floor that is not in effect?

2006-10-15 07:28:17 · 2 answers · asked by alley 2 in Business & Finance Other - Business & Finance

2 answers

I think you are confused because you haven't defined your terms. And I'm not sure what you mean by "controlled price." At least, you have confused me. Is the controlled price the price floor?

In all free markets, price is determined by Supply and Demand.

Demand equates to Support in price.
Supply equates to Resistance in price.

Until you define what "controlled price" is, I can't help you with that.

But I answered a similar question not long ago about "Buying the Dips," which is simply buying at Support. Here was that answer:

Go to Yahoo Finance and click on a chart of the Dow.

The Dow made a Double Bottom on 6/13 and 7/14. As a trader, I buy all Double Bottoms, and sell all Double Tops. That is one way of looking at "Buying the Dips" or selling the rallies at Support or Resistance. There are two sides to every market, not just the upside.

What nobody else mentioned here, is that you only "Buy the Dips" in an Uptrend. Many people just don't get it, and think that just because a stock goes down, it's a better value. Not true. It can usually go lower first, until it finds significant Support.

If Yahoo.com was a great buy at $130/sh, it must really be a good deal at $60, right? So anyone that bought that Dip lost over half their money, because Yahoo is trading at $25 today.

Same thing with Exxon. All the great brokerage houses were recommending to buy Exxon, from $45 all the way down to $10. And the SEC approved each quarterly filing.

So no, "Buying the Dips" doesn't work in just any situation, as other people here would have you believe. They may think they know what they're talking about, but they're not traders. "Buying the Dips" is a "trading" activity, not an "investing" activity.

Back to the Dow chart. If you connect the lows, beginning on 7/14 to present, you can visualize an Uptrend Line. You can also think of the Uptrend Line as a Support Line. Each time the Dow pulled back (declined) to the Uptrend Line (a dip), would be the time to buy. In fact, each time the Dow touched the Uptrend Line are the lowest risk trades on the chart, aside from the Double Bottom, because a Protective Stop can be placed just on the other side of Support, just a few points away. So Support can be viewed as a stable and fixed number, like with the Double Bottom, or it can be a moving number, like with the Uptrend Line. The all-time high in the Dow at 11,721 has been a fixed Resistance number for six years.

Placing a Stop at the time of entry of the trade, means you've made an objective evaluation ahead of time, and defined your risk, rather than waiting to see what happens and trading on emotion, which is almost always unwise.

------------------------ end of "Buy the Dips" ------------------

Okay, now at each point where the Dow approached the Uptrend Line, or made that Double Bottom, your risk is specifically defineable by your Stop placement. Since you want your Protective Stop to be on the other side of Support, and price is sitting right on Support, then you can place the Stop very close. These points of price touching the Support line are the narrowest point for Stop placement, and the narrowest risk.

This "risk" is exactly defined in points and Dollars, and not just some "theory."

2006-10-15 10:21:58 · answer #1 · answered by dredude52 6 · 0 0

whilst chinese language government. restoration the substitute value of a million$=8 RMB, it quite is the two a floor value or a celing value. it quite is fastened actual value. notwithstanding, the money changers ought to upload a small value for effecting transaction of money substitute.yet it quite is often disregarded. So the actual industry substitute value is fastened (the two ceiling and floor). yet this actual value in accordance to you will not replicate the equilibrium substitute value it quite is $a million= 6RMB. thus the RMB is formally undervalued. this suggests on the actual substitute value it quite is dearer for the nearby chinese language to import US products than it could have been under equilibrium. It additionally ability that the U. S. famous it greater much less costly to import chinese language products whilst in comparison with the equilibrium subject. under such circumstances the U. S. can tend to purchase greater from China and the chinese language will purchase much less from the U. S.. thus in comparison with the equilibrium subject the provision of greenbacks to fund purchase of chinese language products would be larger, while the call for for money via chinese language to purchase US products would be decrease. thus, there will be non-provide up extra furnish of greenbacks against the RMB except the surplus money are used via the chinese language government. to take a place in economic materials/ treasury expenses interior the U. S.. interior the absence of such correction and regardless of that, the unofficial / black industry will continually assume the fee of dollar in phrases RMB to fall. yet this would possibly not bring about substitute interior the actual substitute value fastened via the chinese language government. thus, there being no unfastened industry for forex in Cjina, the deviation from industry equilibrium won't result interior the operation of dynamic industry forces to enable the substitute value pass lower back to an equilibrium. the challenge in awareness which you face is given which you haven't any longer seen markets the place the administrative, fixes the fee working. it quite is a rationing syste,. yet all rationing device ends up in black industry operations. This must be occurring in China additionally: money being bought and acquired illegally. however the chinese language government. dictates each little thing in that us of a and controls each little thing. So the black industry is sought to be controlled. yet via conserving the RMB undervalued, the chinese language are compelled to sell ghinese products at a decrease value. it quite is a loss to chinese language economic device.

2016-10-19 10:50:25 · answer #2 · answered by Anonymous · 0 0

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