i used to stare in disbelief too when things spiked up 40% at...

i used to stare in disbelief too when things spiked up 40% at the open. but then i realised that more times than not, the price just kept going up day after day.

people anchor to the previous closing price and think 40% is a lot. but when market depth is stacked so hard (ive seen 1000+ buyers to 35 sellers before!) then u might as well get on board. chances are those 35 sellers will get greedy and pull their offers and the 900 or so blind newbie investors will ignore alex's instructions and pay over his recommended price and the supply demand gets distorted even more. no point mentally anchoring to the old price and hoping it gets back near there because it rarely does!

the thing is, its this surge of blind buyers that get the momentum going on a generally good and undervalued story so these days i just jump in regardless, knowing full well im paying 40% over previous days close, purely because more times than not, it doesn't stop there..

40% on the original price is often not much compared to the constant 10% rises at higher prices as the subscribers keep buying, alerting other traders etc. and with such strong buyer support waiting on alex's every instruction (with a medium term timeframe), the price doesn't correct for a while.

i've also noticed price doesn't plummet when these editors issue a sell signal. see more times than not, they wait til a stop loss is hit and the position is underwater before recommending a sell and i think lots of subscribers have a hard time selling at a loss. perhaps they don't deal with the emotional side well and 'hope' for a price recovery.. on of the classic newbie mistakes of not cutting losses. and of course they make this mistake. many are newbies...thats why they subscribe in the first place!!

i use the subscribers to my advantage. don't fight the early rush of the herd. just know when to jump ship (the hardest bit)

ps - i don't mean to talk with any authority or experience. i haven't been in the game very long at all. these are just my observations on market psychology (a big interest of mine)