''Lesson in FOMO''

​​​Why is MicroStrategy's share price surging?

​MicroStrategy's stock surged 15% on Wednesday to $495.98, continuing its meteoric rise as the company capitalises on its strategic investments and market positioning. The company has seen its shares skyrocket nearly 700% this year, significantly outperforming its peers and broader market indices.

​This rally follows a series of high-profile moves to enhance its financial standing and expand its asset base, boosting its market capitalisation to $109.3 billion and securing its place as the 88th largest US public company.

​Executive Chairman Michael Saylor credits the company’s bold strategies and innovative focus for revitalising its operations, transforming it into a market leader with substantial growth momentum.

​Understanding the risks of parabolic price moves.

​The recent parabolic move in MicroStrategy's stock price presents both opportunities and significant risks for traders and investors.

​Historical data suggests that such rapid price increases often lead to increased volatility, as evidenced by the Average True Range indicator jumping from 1500 to 3500.

​Investors considering opening an online trading account should carefully evaluate their risk tolerance, given the stock's current momentum.

​A potential pullback to the November 13 high would represent a 26% decline from current levels, highlighting the importance of proper position sizing.

​Technical analysis of MicroStrategy's share price.

​The stock's technical indicators show extremely overbought conditions, though momentum remains strongly bullish.

Trading volumes have surged alongside the price increase, suggesting strong institutional participation in the rally.

​Resistance levels have been consistently broken to the upside, with previous resistance points becoming new support areas.

​However, the distance from major moving averages suggests the potential for mean reversion in the medium term.

Risk management strategies for volatile stocks.

​Implementing strict stop losses becomes crucial when trading highly volatile stocks like MicroStrategy.

​Consider using smaller position sizes than usual to account for the increased price swings and higher Average True Range.

​Options trading could provide alternative strategies for managing risk while maintaining exposure to the stock.

​Diversification across multiple sectors can help offset the concentration risk of holding volatile technology stocks.