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Technical analysis is the method used by traders and investors to analyze an asset and try to predict its future movements based on historical price data, volume, and other technical indicators. It’s the most common analysis method, especially for the short and medium term, and it’s used in stocks, forex, crypto, and other financial markets.
In a short time frame, it is possible to achieve a result equal to or greater than 1% daily return, but in the long term, the stop losses deteriorate the final result, which in all probability does not come close to the final 0.1% daily return we talked about. The most profitable active funds, in fact, often collect a few percentage points more than the reference market.
Among the various strategies that are popular in the markets, “smart beta” investment strategies have been making their way among investors in recent years. These fall between passive management and active management strategies, embracing all market operators who want to scratch a few more percentage points from the market, but without having to open and close trades manually.
Risk tolerance is the degree of risk an investor is willing to bear, given the volatility of an investment’s value. Higher risk tolerance is often synonymous with investing in crypto, stocks, equity funds, and ETFs, while lower risk tolerance is often associated with buying bonds, bond funds, and income funds.
“I told you so!” they will say, “that was logical!” they will continue, rising to masters of market analysis as if they had predicted the impossible. In reality, the bear market is not a catastrophe that someone has to prophesy, nor a rare event, but it is a phase in which the market reduces the excesses that formed in the previous bull run and realigns itself with macroeconomic conditions.
Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. This means that interest is earned on both the original amount and on the interest that has been added to it, leading to exponential growth over time.
“The first rule of an investment is never lose money. And the second rule of an investment is never forget the first rule. And that’s all the rules there are.” Pretty obvious, right? This is an iconic phrase pronounced by Warren Buffett, a now elderly gentleman who revolutionised the world of finance and investments thanks to his passion for fundamental analysis.