How Stock Market Crashes Happen

How Stock Market Crashes Happen
The stock market is one of the best ways to build wealth and grow your money; however, over its history, there have been stock market crashes. There are situations that cause the "market" to behave in a certain way and this behavior leads to emotions that then cause things to spin that much more out of control. How actually does a stock market crash play out? No matter what the original cause, from that point forward all crashes happen for the same reason.
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[@lilpogchamp4904]

Buffet said: "be fearful when others are being greedy. Be greedy when others are fearful.

[@claytrader]

Indeed

[@rocketbunny0989]

how many stacks u made based on this quote?

[@iggyface89]

What does this quote mean?

[@theodorehaskins3756]

Buffet also said, “to never invest in anything you don't understand,” and I say, “never invest in things that keeps you up at night.” Moreover, we should all remember that the objective of investing in the stock market, is to buy low, and sell high, and that timing the market is something few people are successful at doing. So a better approach in my opinion is to use of dollar cost averaging to get into the market and to get out of the market, and it's a much more efficient way to approach the market and take out the emotional aspects of trying to figure out when to get in or when to get out, in other words, when to buy or when to sell. It also operates as an efficient tax strategy as well, something people tend to forget when they’re investing in the stock market. So I like to think of myself as a value investor, but also a growth investor, as I prefer holding stocks of companies that has the potential of sustain growth and that are undervalued relative to their market cap, and so as a strategy I am a buy and hold investor, because if you don't believe in what you’re doing, and you can't explain what you’re doing, it is likely that you don't know what you're doing. So buying and holding stocks in these companies minimizes your risk in a declining economy, protects your buying power in a future bull market, and so I don't buy individual companies I buy funds that invest in a particular sector of the market, and as long as I am making money I'm not worry about the daily fluctuations within the market, and I am not trying to compare one fund to the other and move funds based on a percentage of a past performance, because we all should know by now that pass performance is not an indicator of future performance and that there’s always risk in anything we do. So if you’re the kind of person where risk well the loss of money is always on your mind, and it drives your decision making, you should probably not be investing in the stock market. So get out, and stay out, as investing in the stock market should be left to those who can handle the risk of a loss of money, and investing in stocks in an effort to make money will always come with risks of a loss, in fact it is the risk of loss is where the opportunities lie, and so think like a business person, not like an employee, and believe in what you’re doing, because if you don't believe in what you’re doing, the question becomes, why are you doing it? So remember, no pain, no gain, it's an age old adage, that is true, as you gotta break some eggs in order to make an omelette, and building character is like building muscle in a gym, it is only through resistance that you build muscle and the same is true with character, and as one late night talk show host put it, I've never been hit by train I saw coming. So know who you are, know you're objective, know why you’re doing what you're doing, and never move your money based on emotion, or some news event, because chances are the smart money has already beat you to the exits, and so most importantly, educate yourself, because education builds confidence, and confidence is the stuff of success. Comphrende!🤷🏽‍♂️

[@beez2483]

classic example of supply and demand.

[@claytrader]

Indeed.

[@1unknown61]

Why can't anyone else explain things as easy as you do? This was a great video and I passed my Business test this week thanks to it. Much appreciated

[@claytrader]

Glad it could help!!!

[@Bazzxux]

You have the best way of explaining things!

[@claytrader]

Thanks. Glad it could help.

[@ashanhimself6350]

This channel should be called "I'm Clay let me Explain" Haha!

[@claytrader]

Good idea!

[@Maniacmitchell]

This was one of the BEST examples. Thank you very much!

[@claytrader]

And thank you for watching!

[@aaronbajlo4663]

Thank you for explaining this you deserved a follow

[@claytrader]

You're welcome!

[@rileysmith9674]

I loved the visual, very helpful

[@claytrader]

glad it helped

[@ahanapal4055]

Thank you for the great explanation!

[@claytrader]

You're very welcome!

[@puupuuu9031]

nice video clay! Good JOB! WOW! Marvelous Amazing Explanation Ever.

[@claytrader]

Thanks

[@killmexd7704]

Such an amazing explanation

[@claytrader]

Thanks for watching.

[@sandramann7277]

Thanks for the simplified explanation!!

[@claytrader]

You're welcome!

[@ouji5055]

Thanks for the info.

[@claytrader]

Any time!

[@Z9E4D]

Why do people panic and sell? Why don't they just hold their stock and wait til the market recovers? Its not as if its gonna be crashed forever :/

[@claytrader]

Just basic human emotion. They see the value of their accounts go down and they want it to stop going down.

[@user-mr7vs9pq4g]

Dam, first 40s already explained a lot. Thanks alot.

[@claytrader]

Happy to help!

[@AmmarBinAman]

Wow!! Simplified it to an amazningly fabulous extent!! Love it! Keep making more please!

[@claytrader]

Happy to help!

[@rickblack1452]

When you equated stock market to just a market .. that was the key. I equated it with my buisnes as the seller and the customers as the buyers..and just like that I understand the entire concepts.. thank you

[@claytrader]

Happy to help!

[@lmathews5608]

Good job man thank u

[@claytrader]

Glad it helped

[@shaweleissa1831]

Thank you!

[@claytrader]

You're welcome!

[@old_in_internet_yrs6154]

Thank you, very informative and I just happened to wonder because these highs were seeing now can’t last forever.

[@claytrader]

Glad it was helpful!

[@mirajcreates]

Good content and explanation

[@claytrader]

Thanks!

[@TORRES6784]

Thanks .. very helpful Video.. ✊

[@claytrader]

Glad it was helpful!

[@missbeau2561]

Simply a superb video

[@claytrader]

Thanks for watching

[@DesmondCleaver]

I learned more about our economy and current events watching this video 📹 than any media source the last few years.....

[@claytrader]

Glad it could help!

[@sindhuravishankar9909]

Superb explanation!

[@claytrader]

Glad you think so!

[@anangambarman4606]

thanx nice video!!!

[@claytrader]

You're welcome. Glad you enjoyed.

[@janey4319]

Watching this and waiting for the Canadian housing market to crash so I can afford to move out of my parents house lol

[@claytrader]

A plan of action is Step 1!

[@jaredbezes7806]

Wow very good explanation

[@claytrader]

Cheers

[@thethinkacademy_phd]

Omg bro....how sinply u explained it 🔥🔥. Now i got it when to buy and sell.

[@claytrader]

Glad I could help

[@bench-xpress]

Nice basic market explanation. 👍

[@claytrader]

Glad it was helpful!

[@rajendrarao3057]

Awesome video

[@claytrader]

Thanks.

[@mitalibapat3470]

The best explanation..👌👌

[@claytrader]

Glad you liked it

[@thumpiduram5792]

Nice video sir

[@claytrader]

Thanks

[@DjdflexinDmix]

3:08 has me dead

[@claytrader]

:-)

[@dontcallmeimdead.9556]

This was fun! It was almost like I was in a class, but an interesting one.

[@claytrader]

Glad you enjoyed it!

[@Mylstrydr]

Best explanation. You have a gem of a video that's easily understood by my 4th-grade class!

[@claytrader]

Did you show it to your 4th grade class?

[@Mylstrydr]

@@claytrader Yep, and it's definitely helped them understand the start of the Great Depression. It's also one of the few things that pretty much everyone in class remembered on the test, haha.

[@claytrader]

@@Mylstrydr very cool! Happy to help!

[@cityofjoy8830]

Very nice also applicable for real estate.

[@claytrader]

Indeed

[@mikail8010]

Thank you

[@claytrader]

And thank you for watching

[@savitamaghade3753]

Best explained

[@claytrader]

Glad it helped

[@perfectstring]

Thanks sir

[@claytrader]

Welcome

[@gimli108]

I like the video but Its probably worth explaining why lots of people wanting to sell causes the price to drop?? For every transaction on the stock market there must be a buyer and a seller. When no-one is willing to buy at the current "market price" the sellers are forced to sell their shares at a lower price to a willing buyer. This is what drives the price down 👇 The current "market price" is simply a reflection of what the share last sold for. If you have a bunch of sellers and no one is willing to buy for any price then the share price stays the same because the sellers can't actually offload their shares.

[@claytrader]

All explained here claytrader.com/videos/trading-101-what-makes-a-stock-price-change/

[@georgegeoffrick288]

But if there are more sellers than buyers for a stock of a specific company, how does the entire market crash.

[@claytrader]

It doesn't.

[@jdmg35driver1]

Great video - question. So because there are more sellers than buyers, does this mean that the seller won’t sell their stock? Or will there always be someone who buys the stock and a particular price? I hope that makes sense. Thank you for your time

[@claytrader]

In theory, there will be a time where there are no buyers left (or in other words, the object is "worthless"), meaning, the seller will not be able to sell.

[@dontcallmeimdead.9556]

@@claytrader What happens when they are not able to sell? Are they stuck with a worthless object and basically lost all their money?

[@claytrader]

@@dontcallmeimdead.9556 if you can not sell something because no one wants to buy it, then by definition, it is worthless.

[@angelosolitude]

@@claytrader So Buyers will become Sellers when they decide to sell the stock they have, but if no one is buying, then won’t the market just stagnate rather than crash? If there’s a growth in Sellers but a decrease in Buyers, won’t there be no transaction at all?

[@claytrader]

@@angelosolitude the markets will collapse if there are no buyers

[@nilsrichart9074]

Good Video

[@claytrader]

Thanks for the visit

[@madarauch00]

great explanation 🥵

[@claytrader]

Thanks! 😃

[@jjdd4307]

Question: So let's say Apple had a new smartphone but was really defective, would that cause Apples stock price to go down?

[@claytrader]

I would guess down...

[@regulardude2011]

So if stock market crashes and I have some shares. Can I just ride it out and not sell for a loss? And is it a good idea to buy at super low prices during market crash?

[@claytrader]

This should help claytrader.com/videos/unrealized-vs-realized-trading-explained/

[@karroxgaming]

okay so I have a question if there are more sellers... and the price sare going down then why don't buy the shares in low prices now and sell them later when the market gets back into its place?? this will give you profit btw I am new in market so tell me if siad something wrong 😅

[@claytrader]

No guarantee the price will ever go back up.

[@thumpiduram5792]

This video made me understand the crypto space too! Thanks a vot sir r

[@claytrader]

My pleasure!

[@tagsantov338]

ty

[@claytrader]

You're welcome.

[@DanielHoward777]

Stupid question but as a stock holder wouldn’t you just hold onto your stocks, ride out the crash and then sell when the price goes up?

[@claytrader]

No guarantee a price will go back up.

[@burnieclimber]

Wait don't you need buyers to sell when it comes to stocks? So if there are all these people selling where do the stocks go if no one is buying them??

[@claytrader]

zero

[@valtmystic899]

Rona be like y yall looking at me

[@claytrader]

Yup!

[@priyasridhar678]

Thx...

[@claytrader]

And thank you for watching!

[@priyasridhar678]

@@claytrader informative, but if buyers are more the no crash right

[@claytrader]

correct

[@priyasridhar678]

If price of shares go down will more buyers buy or what will inspire more buyers to buy

[@yadhukrishnam]

1 doubt. If there are a whole lot of sellers than buyers, then the value of that particular stocks are getting down. How does this make the whole market to crash?

[@claytrader]

Yes

[@yadhukrishnam]

@@claytrader will you pls explain sir🤔

[@claytrader]

@@yadhukrishnam "getting down" is the definition of a "crash"

[@vibhorkala5144]

But if their soo many sellers, what if there are no buyers at all or very few, how will the price then continue to drop (as nobody is buying)?

[@claytrader]

The less buyers, the faster it drops...

[@vibhorkala5144]

@@claytrader thanks for the reply, but why would sellers go down so low in order to just get rid of the stocks, why take soo much loss?

[@chivalier24]

@@vibhorkala5144 maybe they are afraid that they won't be able to sell it anymore, it becomes worthless and there might come a time that nobody is interested to buy them in the future.

[@ayoubmilad2123]

How it will return normal (the market)

[@claytrader]

Eventually people run out of shares to sell and then more buyers (at much lower prices) come back in to buy.

[@ayoubmilad2123]

@@claytrader thanks man you r amazing

[@claytrader]

You're welcome. Glad you enjoyed.

[@VishalVerma-vq3je]

But for a seller, there's a buyer too... More sellers and less buyers can't make a market 🤔🤔 can you elaborate please

[@claytrader]

And that's why a crash happens.

[@lastravaganza2385]

but why would the buyers become sellers if the price of stocks are becoming lower?

[@lastravaganza2385]

nevermind i got it

[@claytrader]

Great!

[@matingpamathew1986]

How can buyer come to seller if they had not bought just not clear

[@claytrader]

I'm not sure what you mean.

[@matingpamathew1986]

@@claytrader I mean how buyers become seller ?

[@claytrader]

@@matingpamathew1986 by choosing to sell.

[@emdeqresearch931]

So, how far away are we from the next crash?

[@claytrader]

if you're interested in "talking stocks/trading in general", you are more than welcomed to join my private community - claytrader.com/team/

[@Thailova]

When Wallstreet sales, the market crashes

[@claytrader]

Kind of.

[@yungwaifu]

So someone trying to predict when the stock market will crash, can in itself cause the stock market to crash??? this shit ridiculous we just cant win

[@claytrader]

You can short and make money. claytrader.com/videos/how-do-you-make-money-shorting-a-stock-ill-try-to-explain/

[@ayannahaley8091]

Wait sorry if this question is stupid, but why would buyers be losing money? Oh there are a bunch of sellers and only a few buyers, why would buyers be the ones losing money?

[@claytrader]

Watch this: claytrader.com/videos/how-a-stock-can-lose-you-money/

[@user-jb2tc3go2d]

Why do they not limit sellers?

[@claytrader]

That would be illegal.

[@mikaelsernelin1312]

...and the grass is green .....

[@claytrader]

Is it?

[@lmathews5608]

So eventually who ends up buying those shares? Companies?

[@claytrader]

And people.

[@lieshtmeiser5542]

Case in point: May 2022 The market launched into bearmode, ostensibly because of inflation in the western economies, and so there was a rush to cash and there was a system wide crash. Its easy to see on the so called 'market depth', the buy side vaporizes, the sellers sell at mkt, and they crash the price. From a stock trading point of view it is the dumbest thing anyone could do. Past the first day or so of the market, when things are slipping, its pointless selling because the sellers are just locking in unnecessary losses to go to cash, to buy what exactly? 2022 aint 1929.... Theres retirement funds, theres sovereign funds, theres hedge funds, etc. So theres always gonna be new money pouring in...so its pointless to oversell. By all means sell if locking in profits, but generally it is pure fear, bolting because the guy next to you bolts, but not knowing why.

[@claytrader]

Yup

[@tomdobyns2062]

Yep... Holding companies buy their own stock back and forth to cause the price to go up. Then they sell it off at the higher price to make money. This seems to happen when interest is low, and is a function of uncontrolled banking. It is also called a "stock buy back", but it's actually market manipulation. Holding companies also show preferential buying and selling of goods and product to companies that they hold. Glass Stigel was passed after the 1929 depression to separate investment and commercial banking, which was effective until it was cancelled in 2008, or about 6 months before the crash. Now, we have the same problem brewing as 1929. It was replaced by the Dodd-Frank Act which is far less effective than Glass-Steigel was. Major holding companies own banks, and use them to manipulate the stock market. China is involved up to their ears, with the CCP acting as a major holding company. All the majors involved with them will lose their drawers as companies are nationalized.. Good. China will also control US businesses. And, we voted for democrats. And, allowed them to act just along party lines.

[@claytrader]

Thanks for the thoughts

[@rahulpaul12]

I watched the whole video and understand how market crash is happen but i don't know what happen when the market crashes plzz explain me what happen when the market crash

[@claytrader]

This happens claytrader.com/videos/how-a-stock-can-lose-you-money/

[@ahanapal4055]

Poor Bob

[@claytrader]

Indeed!

[@imliwall1132]

I'm John..let me hear

[@claytrader]

Hi John

[@Sp-wd8rw]

Just waiting for the next crash that’ll be happening soon😪

[@claytrader]

We'll see what happens....

[@heinzbucksandcastle2053]

You forgot to comment on programmed trading, redemptions, futures, etc etc

[@claytrader]

No, I didn't forget.

[@lilpogchamp4904]

What causes more sellers than buyers

[@claytrader]

Fear

[@alwayspeace898]

When ppl don’t wanna buy they think it’s gonna go down or ppl have no money.

[@akmalhakim9797]

Do stocks and cryptos crash the same thing??

[@claytrader]

Yes

[@Xahu.]

Lot of this happening rn I'm buying the shit out of these dips bruh

[@claytrader]

These "dips" are nothing.

[@Xahu.]

@@claytraderdamn so I should've waited..

[@claytrader]

@@Xahu. do what you think is best

[@vishhal8297]

would like to hear "bob the builder" in your voice

[@claytrader]

Roger that.

[@keyboardtaskforcephi-3689]

Alright I'm gonna the crash the market in a RPG game. stack the stuff. Wait a while.

[@claytrader]

Go for it!

[@firstlast189]

Yeah but. What about Bob?

[@claytrader]

Good movie.

[@MinazukiKajishiro]

So how's BOB, anyone heard of him yet?

[@claytrader]

Good question...

[@mohammedsadiq4623]

Are we screwed!?

[@claytrader]

Depends on who you ask lol

[@kamalthakur1341]

Good but could hv been shorter

[@claytrader]

Thanks for the feedback.

[@eseovheegborge7510]

Sellers are more than buyers! Really? 6 minutes to say so? Tell us why everyone decides to sell. What thresholds are broken? What indicators are there? When is it imminent? What did the big short guy see that made him sell off prior to 2008 crash. Common now! Your audience are more educated than elementary

[@claytrader]

Calm down. You'll enjoy life more.

[@ggaryng]

Can buy Facebook Meta now? 🤪

[@claytrader]

Sure

[@sharifrahim4837]

This explaination is for 6 years old! 1 tomato + 1 tomato = 2 tomato xD haha wtf man, i thought i would learn something new like Fed buys stock and sell stocks at 4.268 fib level along raising interest rate so dollar gets little value and deflation occurs and its basically reprogram of the market to go new all time high with fed again printing alots of money! anyways, it was nice video for newbies

[@claytrader]

Mission accomplished then. This is for beginners, not brilliant individuals such as yourself.

[@sharifrahim4837]

@@claytrader make for advance level aswell

[@priyabkp3328]

After scam 1992!

[@claytrader]

Scam?

[@023kiranb4]

@@claytrader it is a Indian web series. Why I'm here because I don't know the meaning of share market crash in that series. Whenever you have a free time just watch that series and you will get to know the famous harshad mehta

[@claytrader]

@@023kiranb4 thanks for sharing

[@markflores9055]

BS

[@claytrader]

Huh?

[@tarawhite4419]

The billionaires cause this

[@claytrader]

Nope.

[@tradefeedz3560]

WRONG! The number of buyers and sellers is always equal in every market. Only the price changes (bid vs ask). Please stop misleading people. Crash is caused by lower asks

[@claytrader]

You are 100% wrong. Yes, every "transaction" has a buyer and a seller, but as far as a "market" is concerned, there is not an exact amount.

[@tradefeedz3560]

@@claytrader if anything it is the number of shares being sold or bought may be higher or lower but the number of buyers vs seller will stay the same

[@claytrader]

How is something worthless? It's worthless because you have people who want to sell it, but there are no buyers. That's a market where there are SELLERS but literally ZERO BUYERS. There is a massive difference between a "transaction" and a "market". You should probably learn the difference before you go accusing someone of "misleading".