Chasing the Market

Chasing the market refers to entering a position when the trend has long been established, buying a stock that has increased a lot over a relatively short period of time(or shorting a stock that has declined a lot over a relatively short period of time), hoping to capitalize on momentum. However, chasing the market is quite dangerous, especially for novice investors, as they are usually late to the game and more often then not, incur losses from attempting to chase the market.

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