Why you should take a break from Trading

If you haven’t heard already, the financial markets are all reaching their ATH and investors are making the largest ROI they ever have. Despite this, most investors are declaring that they are going to be taking breaks from trading after taking profits from their long positions. Why is this the case?

Why Have Share Prices reached ATH?

Firstly, we need to understand why the markets have grown so much and this mostly has to do with the coronavirus pandemic because as we saw at the beginning of the coronavirus pandemic, most securities values dropped substantially leading(S&P 500’s value dropped -30.18%) and this meant that as the economy started to get running again, many investors who bought long positions when the S&P was at its reversal were making large ROI. This attraction to the uptrends created by the revived economy attracted many day to day people onto public exchanges leading to larger volumes of trading and with the higher number of concurrent traders this lead to an increase in the price and is explained through the law of demand.

With the higher number of traders, this has meant that many securities are reaching their ATH…