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Fundamental Analysis

4 Ways to ACTION a trade - WHEN TO FIRE!You know that successful trading is… . . . . Patience. You need to wait for the setup, reason, system, lining etc… But then there is the 2% time where you actually ACTION a trade. We action a trade for three reasons. To enter To adjust To get out But we need to talk about these reasons more… Let’s do it., ACTION #1: Trade lines up – JUST TAKE THE TRADE! When your trading signal lines up with your entry, stop loss, take profit, and system: This is the most obvious time to take action. It tells you “HELLO AN OPPORTUNITY HS ARISEN” It is crucial to act quickly and decisively when this happens, as opportunities in the market can disappear just as quickly as they appear. ACTION #2: Adjust your levels – JUST CHANGE THE TRADE There are two levels you can adjust with your trades. Stop loss and Take profit. When the market is moving in your favour, and you have solid rules to move your stop loss in the favour. This is done to lock in minimum gains. For example. When my trade is 1:1 in the money, I might move my stop loss to just above breakeven. This way I have nothing to lose if it turns against me. Then when the market is shooting in your favour, you might want to adjust the take profit. This is because you can see the market wants to move further or… There is a new setup with a new take profit level in place – which happens often with my analyses. Action #3: Execute the time stop loss – JUST GET OUT When an extended period has taken place i.e. 35 days or 7 weeks. You might want to just get out of the boring trade. You are either : • Chowing (eating away at) unnecessary daily costs holding a non performing trade. • A trade setup seems null and void as a new contrary setup as formed. • Or it’s just a plain old opportunity cost where you can put your money in better places. it may be necessary to exit the trade in order to avoid incurring too much in daily fees or missing out on other better opportunities. Action #4: Exit due to unforeseen circumstances- SERIOUSLY JUST GET OUT! For example when a black swan event occurs: A black swan event is a term used to describe a market collapse (10X the standard deviationof its normal price move) that is unexpected and has a significant impact on the market. In the event of a black swan event, it is essential to exit your trade in order to protect your capital and avoid taking a bigger loss than you expected.
TVC:SA40Education
by Timonrosso
How to Day Trade or Swing Trade S&P500 Futures No IndicatorsHey Traders, So over the years I bout alot of courses about trading the markets. In one course I took I learned about a reversal strategy using candlesticks on daily charts. Although in the past I didn't consider myself a Day Trader I found this strategy to be appealing for it using the Stock Index futures. So now I sometimes do day trade the market if I get the right setup. The good thing about his strategy is that you only need to check the market once a day to see if there is a setup. Then you just place your stop orders and limit orders according to your risk management or you can also use options. Enjoy! Trade Well, Clifford
CME_MINI:ESM2023Education
by TradeTheIndex
10
FUNDAMENTALS-Share Consolidation (Reverse Stock Split) RichemontOn 19 April 2023, Richemont went through a Share Consolidation (Reverse Stock Split). That's why we saw the price move from R300 up to R3,027 (909%). But before you get excited with whether you could have profited big time we need to remember what a Reverse Stock Split is... What is a Reverse Split (Share consolidation)? • The opposite of a stock split where • When the company makes a corporate action to • Reduce the number of its outstanding shares to its shareholders • Which simultaneously increases the share price • The shareholder will still have the same value proportional. What happens to the par value of the share price? A decrease in the number of shares means that the share price will go up! Why would a company do a reverse spit? The company might be under the impression that shareholders think the share price is too low. So, they’ll cut the number of shares and increase the shareholder which will give the impression of the share price higher and more valuable. EXAMPLE: With Richemont – 19 April 2023 SPECIFICS: Share consolidation: Reverse Stock Split 10:1. BEFORE: The share price was R300.00 AFTER: The share price is R3,027 No. SHARES OWNED: 100 AFTER CONSOLIDATION: For every 10 shares you owned before, you now own 1 share. So your 100 shares would be consolidated into 10 shares. OVERALL VALUE: BEFORE: 100 shares X R300 = R30,000 AFTER: 10 shares X R3,027 = R30,270 In this case, the value of the investment has indeed increased after the share consolidation but only marginally.
JSE:CFREducation
by Timonrosso
Diversification using TradingView ToolsHow to diversify your portfolio and trade across different markets and asset classes using Tradingview's data and charts Diversifying your portfolio is one of the most important strategies for reducing risk and increasing returns in the long term. By investing in different markets and asset classes, you can benefit from the different performance cycles and correlations of each asset, and avoid putting all your eggs in one basket. However, diversifying your portfolio can also be challenging, especially if you are not familiar with the different markets and asset classes available. How do you know which assets to choose, how much to allocate to each one, and how to monitor their performance over time? This is where TradingView can help you. TradingView is a powerful platform that provides you with data and charts for thousands of assets across various markets and asset classes, such as stocks, forex, cryptocurrencies, commodities, indices, futures, options, and more. You can use TradingView to research, analyze, and trade these assets with ease and convenience. In this article, we will show you how to diversify your portfolio and trade across different markets and asset classes using TradingView's data and charts. We will cover the following topics: - How to access data and charts for different markets and asset classes on TradingView - How to use TradingView's tools and features to research and analyze different assets - How to use TradingView's indicators and strategies to identify trading opportunities and signals - How to use TradingView's brokers and trading platforms to execute trades on different assets - How to use TradingView's portfolio and watchlist tools to monitor and manage your diversified portfolio By the end of this article, you will have a better understanding of how to diversify your portfolio and trade across different markets and asset classes using TradingView's data and charts. Let's get started! One of the benefits of diversifying your portfolio is that you can take advantage of the different performance cycles and correlations of different markets and asset classes. For example, stocks tend to perform well during periods of economic growth and expansion, while bonds tend to perform well during periods of economic slowdown and contraction. Similarly, commodities tend to perform well during periods of inflation and supply shocks, while cryptocurrencies tend to perform well during periods of innovation and disruption. However, to diversify your portfolio effectively, you need to have access to data and charts for different markets and asset classes. This is where TradingView can help you. TradingView is a platform that provides you with data and charts for thousands of assets across various markets and asset classes, such as stocks, forex, cryptocurrencies, commodities, indices, futures, options, and more. You can use TradingView to research, analyze, and trade these assets with ease and convenience. To access data and charts for different markets and asset classes on TradingView, you can use the search bar at the top of the page. You can type in the name or symbol of the asset you want to view, or you can browse through the categories and subcategories on the left side of the page. For example, if you want to view data and charts for stocks, you can click on the "Stocks" category on the left side of the page, and then choose from the subcategories such as "US Stocks", "UK Stocks", "Canadian Stocks", etc. You can also filter by sectors, industries, market cap, dividends, earnings, etc. Once you select an asset, you will see its data and chart on the main page. You can customize the chart by changing the time frame, adding indicators, drawing tools, annotations, etc. You can also compare the performance of different assets by adding them to the same chart. For example, if you want to compare the performance of gold and bitcoin over the last year, you can add them to the same chart by typing in their symbols in the search bar (XAUUSD for gold and BTCUSD for bitcoin) and clicking on "Compare". You will see their data and charts overlaid on each other. You can also use TradingView's tools and features to research and analyze different assets. For example, you can use TradingView's screener tool to scan for assets that meet your criteria based on various fundamental and technical factors. You can also use TradingView's news feed to stay updated on the latest developments and events that affect different markets and asset classes. You can also use TradingView's social network to interact with other traders and investors who share their ideas and opinions on different assets. TradingView also provides you with indicators and strategies that can help you identify trading opportunities and signals for different assets. Indicators are mathematical calculations that are applied to the price or volume data of an asset to generate signals or patterns that indicate the direction or strength of a trend or a reversal. Strategies are sets of rules that define when to enter and exit a trade based on certain conditions or criteria. TradingView has hundreds of indicators and strategies that you can use or create your own using TradingView's Pine Script language. To use TradingView's indicators and strategies, you can click on the "Indicators" button at the top of the chart. You will see a list of categories such as "Trend", "Momentum", "Volatility", etc. You can choose from the built-in indicators or search for custom indicators created by other users or yourself. You can also click on the "Strategies" button at the top of the chart to see a list of categories such as "Long", "Short", "Scalping", etc. You can choose from the built-in strategies or search for custom strategies created by other users or yourself. Once you select an indicator or a strategy, you will see it applied to your chart. You can adjust its settings by clicking on its name at the top of the chart. You will see its parameters such as inputs, outputs, alerts, etc. You can change these parameters according to your preferences or needs. You will also see its performance report that shows its statistics such as net profit, win rate, drawdown, etc. You can use this report to evaluate its effectiveness and suitability for your trading style and goals. TradingView also allows you to execute trades on different assets using its brokers and trading platforms. Brokers are intermediaries that connect you with the markets and allow you to buy and sell assets for a fee or commission. Trading platforms are software applications that enable you to place orders, manage your positions, monitor your account balance, etc. TradingView has partnered with several brokers and trading platforms that offer access to various markets and asset classes. To start trading on TradingView, you need to connect your broker account or trading platform to your TradingView account. TradingView supports many popular brokers and platforms, such as Oanda, FXCM, Coinbase, Binance, Interactive Brokers, and more. You can find the full list of supported brokers and platforms here: www.tradingview.com To connect your broker account or platform, go to the Trading Panel at the bottom of your chart, click on the Select Broker button, and choose your broker or platform from the list. Then follow the instructions to log in and authorize TradingView to access your account. Once you have connected your broker account or platform, you can start executing trades on different assets directly from your TradingView charts. To open a trade, click on the Buy/Sell button on the Trading Panel, select the asset you want to trade, enter the quantity, price, stop loss, and take profit levels, and click on Confirm. You can also use the One-Click Trading feature to open trades with one click on the chart. To enable One-Click Trading, go to the Settings menu on the top right corner of your chart, click on Trading Settings, and check the One-Click Trading box. Then you can click on the Bid or Ask price on the chart to open a buy or sell trade respectively. To monitor and manage your open trades, you can use the Orders and Positions tabs on the Trading Panel. Here you can see your order history, current positions, profit and loss, margin level, and account balance. You can also modify or close your orders and positions by clicking on the Edit or Close buttons. You can also use the Trade Manager tool to manage your trades more efficiently. The Trade Manager tool allows you to set multiple targets and stop losses for each trade, as well as trailing stops and break-even levels. To access the Trade Manager tool, right-click on your position on the chart and select Trade Manager. To monitor and manage your diversified portfolio across different brokers and platforms, you can use TradingView's portfolio and watchlist tools. The portfolio tool allows you to see your total portfolio value, asset allocation, performance, risk metrics, and more. You can also compare your portfolio with various benchmarks and indices. To access the portfolio tool, go to www.tradingview.com The watchlist tool allows you to create custom lists of assets that you want to track and analyze. You can add any asset that is available on TradingView to your watchlist, such as stocks, forex pairs, cryptocurrencies, commodities, indices, etc. You can also sort, filter, group, and customize your watchlist columns according to your preferences. To access the watchlist tool, go to www.tradingview.com TradingView's brokers and trading platforms integration and portfolio and watchlist tools are powerful features that can help you execute trades on different assets and monitor and manage your diversified portfolio more effectively. We hope this article has given you a clear overview of how to use these features. Happy trading!
BITSTAMP:BTCUSDEducation
by JS_TechTrading
What should we expect in 2023?First I would like to say "Happy New Year" to all my followers and wish you good fortune in 2023. This chart shows yearly candles in the past 40 years for NASDAQ 100, S&P 500, and Dow Jones. In these charts, you can see yearly changes in 2022, 2009,2008, 2001, and 2000. To plan your investment strategies in 2023, you need to answer this question: What stage of an Economic Cycle are we in? To answer this question you need to know what an Economic Cycle is, and what data can help us determine its current stage. An economic cycle is the overall state of the economy as it goes through four stages in a cyclical pattern: - Expansion - Peak - Contraction - Trough Factors that can help determine the current stage of the economic cycle: - GDP - Interest rates - Total employment - Consumer spending What do you think? What stage of an Economic cycle are we in? My answer to this question is: Economic cycle has peaked and we will enter the contraction phase in 2023. Average Contraction Duration, peak to trough between 1854-2022: 17 months. Once again I wish you a happy new year. Best, If you like to read more, here is the link to the article I used as a reference: www.investopedia.com
NASDAQ:NDXEducation
by Moshkelgosha
9
EXPLAINED: A Bearish Fair Value Gap (FVG) - Smart Money ConceptsA Bearish Fair Value Gap is a 3 candle structure with a DOWN impulse candle (2nd) that indicates and creates an imbalance or an inefficiency in the market. WHAT DO THE IMBALANCES TELL US? These imbalances tell us that the buying and selling is not equal. Now the market needs to rebalance (move at least to 50% of the fair value gap to fill) to make up for the imbalance and rebalance. For this to happen we need to see orders filled in the prices of the candle with the FVG. HOW A BEARISH FAIR VALUE GAP IS CONSTRUCTED: 1st Candle Draw a horizontal line from the bottom of the wick. 3rd Candle Draw a horizontal line from the top of the wick 2nd Candle Draw a BOX between the bottom and the top and pull it over to see the FVG range. BETWEEN CANDLE 1 and CANDLE 3: Do NOT show common prices. They do NOT touch where the lower & the upper wicks do NOT overlap. With a Bearish FVG we can expect the market price to move UP. HOW MUCH? I believe a Bearish FVG needs to close at least 50%. So you can drag a Gann Box or a Fib retracement (take out all the other levels except 50%). Wait for the price to close and fill the prices and boom - Your Bearish Fair Value Gap has been filled. SO WHAT? When you see a Bearish Fair Value Gap, you can expect the price to move up. So you can place your stop loss below the downtrend. You can place your entry where it shows upside is imminent to close the gap. You can place your take profit above the 50% of the formation, as you expect the price to close. But also, we use other confirmation signals with the Bearish Fair Value Gap. Let me know if you have any other SMC (Smart Money Concepts) Questions.
TVC:SA40Education
by Timonrosso
What just happened to Richemont? 911%!REMINDER: Compagnie Financière Richemont (CFR) is a Swiss luxury goods company that has a subsidiary in South Africa. The subsidiary's depositary receipts and warrant receipts were previously listed and traded on the Johannesburg Stock Exchange (JSE). However, starting from April 19th, 2023, these financial instruments will be suspended from trading on the JSE and relevant A shares and relevant A warrants will instead be listed on the exchange. Hold your horses! The 912% increase in Compagnie Financière Richemont (CFR) share price likely resulted from the conversion of financial instruments related to the company's South African subsidiary. The company announced a deadline for the conversion of depositary receipts and warrant receipts, which resulted in the suspension of trading on the Johannesburg stock exchange and the listing of relevant shares and warrants on the exchange. This process likely had a positive impact on the company's share price and resulted in the significant increase.
JSE:CFREducation
by Timonrosso
1
Fundamentals & Technical AnalysisHow to apply fundamental analysis and macroeconomic trends to complement your technical analysis and trading strategy Fundamental analysis and macroeconomic trends are important tools for traders who want to understand the underlying forces that drive the market. Technical analysis, on the other hand, focuses on the price action and patterns of the market. By combining both approaches, traders can gain a more comprehensive and balanced perspective on the market and improve their trading strategy. Fundamental analysis of the macroeconomic environment involves studying the economic, political, and social factors that affect the supply and demand of an asset. Some of the most relevant fundamental indicators are: - Gross domestic product (GDP): This measures the total value of goods and services produced by a country in a given period. It reflects the economic growth and health of a country. A higher GDP indicates a stronger economy and a higher demand for its currency and assets. - Inflation: This measures the change in the average price level of goods and services over time. It affects the purchasing power of money and the interest rates. A moderate inflation indicates a healthy economy with stable growth. A high inflation indicates an overheated economy with excessive money supply and a lower demand for its currency and assets. - Interest rates: This measures the cost of borrowing money. It affects the profitability of investments and the exchange rates. A higher interest rate indicates a tighter monetary policy and a higher demand for its currency and assets. A lower interest rate indicates a looser monetary policy and a lower demand for its currency and assets. - Trade balance: This measures the difference between a country's exports and imports. It reflects the competitiveness and demand for a country's goods and services in the global market. A positive trade balance indicates a trade surplus and a higher demand for its currency and assets. A negative trade balance indicates a trade deficit and a lower demand for its currency and assets. To complement technical analysis and trading strategy, traders can use fundamental analysis and macroeconomic trends to identify the long-term direction and strength of the market, as well as potential opportunities and risks. For example, suppose a trader wants to trade EUR/USD, which is the exchange rate between the euro and the US dollar. The trader can use technical analysis to identify the support and resistance levels, trend lines, chart patterns, indicators, and signals on different time frames. The trader can also use fundamental analysis to assess the economic conditions and outlook of both the eurozone and the US, as well as their relative interest rates, inflation rates, trade balances, and other factors that affect their currencies. Suppose the trader observes that the eurozone has a higher GDP growth rate, lower inflation rate, positive trade balance, and stable interest rate than the US. The trader can infer that the eurozone has a stronger economy than the US, which implies a higher demand for the euro than the US dollar. The trader can also observe that the EUR/USD is in an uptrend on the daily chart, with higher highs and higher lows, supported by a rising moving average. The trader can conclude that the fundamental analysis confirms the technical analysis, which suggests that EUR/USD is likely to continue to rise in the long term. The trader can then use technical analysis to find an optimal entry point to buy EUR/USD. For example, suppose the trader sees that EUR/USD is retracing from a recent high to test a support level at 1.2000, which coincides with a 50% Fibonacci retracement level and a rising trend line. The trader can also see that there is bullish divergence between the price and an oscillator indicator such as RSI or MACD, which indicates that the downward momentum is weakening. The trader can decide to buy EUR/USD at 1.2000, with a stop loss below 1.1900 and a target at 1.2200. By applying fundamental analysis and macroeconomic trends to complement technical analysis and trading strategy, traders can gain a deeper understanding of the market dynamics and enhance their trading performance. If you are stock trading, you should consider the following fundamental indicators which are all readily available as trends on the TradingView platform: - ROE (Return on Equity): This indicator measures how effective a company is in generating profits for its shareholders. It is calculated by dividing the net income by the shareholders' equity. A high ROE indicates that the company is using its resources efficiently and creating value for its owners. - EPS (Earnings Per Share): This indicator measures how much profit a company makes per share of its common stock. It is calculated by dividing the net income by the number of outstanding shares. A high EPS indicates that the company is profitable and can potentially pay dividends or reinvest in its growth. - DYR (Dividend Yield Ratio): This indicator measures how much dividend a company pays per share of its common stock relative to its earnings. It is calculated by dividing the total dividends by the net income or the dividend per share by the earnings per share. A high DYR indicates that the company is rewarding its shareholders with a steady income stream and has confidence in its future prospects. - FCF (Free Cash Flow): This indicator measures how much cash a company generates from its operations after deducting capital expenditures. It is calculated by subtracting the capital expenditures from the operating cash flow. A high FCF indicates that the company has enough cash to pay its debts, invest in new projects, or return money to its shareholders. - PEG (Projected Earnings Growth): This indicator measures how fast a company's earnings are expected to grow in the future relative to its current price. It is calculated by dividing the price-to-earnings ratio by the annual earnings growth rate. A low PEG indicates that the company is undervalued and has strong growth potential. These fundamental indicators can help traders to identify stocks that are overvalued, undervalued, or fairly priced based on their financial performance and future prospects. They can also help traders to compare different stocks within the same industry or across different industries and sectors.
BITSTAMP:BTCUSDEducation
by JS_TechTrading
Learn 4 Classic Trade Confirmations "Look for a confirmation!" "Wait for a confirmation!" When I was learning how to trade and when I was watching and reading different trading educators, these words naturally pissed me off. What the hell are you talking about? What confirmation? It was a full-blown mystery...🤯 Then, once I started to mature in trading and trade full-time, I became an author on TradingView. Posting my forecasts and trading setups, I frequently mentioned the confirmation. And now the newbies that are reading me and learning from me are pissed off...🤬 That is so funny I guess. But the truth is that the confirmation must become a fundamental part of your trading strategy. It is your key to successful trading. What exactly is the confirmation? It depends on many many different things, in this article I will discuss with you the 4 main types of confirmation and give you detailed examples. 1️⃣ - PRICE ACTION CONFIRMATION That is actually what I prefer. Analyzing different markets and searching for decent trading opportunities often times we find some peculiar instruments to watch. Identifying the market trend and key levels we find the potential spots to trade from. But do we just open the trade once the "ZONE" is spotted? I wish it could be that simple... Trading just the zone, without additional clues brings very negative figures. We definitely need something else. Price action & candlestick patterns can be those clues. Accurate reflection of the current local market sentiment makes the patterns a very reliable confirmation. Dodji's, pin bars, double tops/bottoms ... Proven by history, the skill of identification & reading the patterns will pay off quickly. Being in some sense the language of the market, the patterns are the fundamental part of my trading strategy. 2️⃣ - FIBONACCI LEVELS Fibonacci levels are a very popular technical tool. Being applied properly it helps the trader to confirm or, alternatively, disqualify the identified "ZONE". With multiple different methods like confluence trading, fibs are applied in hedge funds and various banking institutions. The main problem with the fibs, however, is complexity and a high degree of subjectivity. Meeting different traders and watching different posts on TradingView I noticed that all traders tend to have their own vision. There is no universal system to apply here, a proper fib.confirmation technique can be built only with long-lasting backtesting and practicing. 3️⃣ - FUNDAMENTAL NEWS The figures in the economic calendar, news, tweets. Actual fundamental news can become your best confirmation tool. However, the main obstacle right here is the promptness, validity and reliability of the data that you get. The information shouldn't be delayed and it must be objectively true. The search for such a source is by itself is a very time-consuming and labor-intensive business not even mentioning its potential costs. And that is not all. Knowing how to make sense of that data, its proper perception, and understanding requires a solid economical and financial background and experience. At the end of the day, becoming an expert in fundamental analysis , the trader can easily sort the trading zones and trade only the ones that are confirmed by a decent fundamental trigger. 4️⃣ - TECHNICAL INDICATORS I believe all the traders apply some indicators. From a simple moving average to some complex composite algorithms, indicators play a very important role in trading. Being 100% objective and providing up-to-date real numbers and figures, they are our allies in a battle against subjectivity. For many traders, the various signals from indicators are considered to be accurate and reliable confirmations. Many algotrading solutions are operating simply relying on such signals and being able to bring consistent profits proves the power of technical indicators. What confirmation type should you rely on?🧐 I guess the main rule right here is that the confirmation must MAKE SENSE to you. You should feel the logic behind that. It must make you confident in your action, even in case of the occasional losses, it must keep you calm and humble. Let me know in a comment section what confirmation do you prefer! 💝Please, support my work with like and comment! Thank you for reading. Let me know, traders, what do you want to learn in the next educational post?
OANDA:XAUUSDEducation
by VasilyTrader
7
The Power of Compound InterestIntroduction Compound interest, often referred to as the eighth wonder of the world, is a financial concept that has the power to transform small investments into large fortunes over time. It is the key to building wealth, securing financial independence, and ensuring a comfortable retirement. In this essay, we will explore the underlying principles of compound interest, its benefits, and real-life examples. Additionally, we will discuss strategies for maximizing the potential of compound interest and managing its impact on debt. The Basics of Compound Interest At its core, compound interest is the interest earned on an initial sum of money (principal) as well as on any interest that has previously been added to the principal. In other words, it is interest on interest. The key factors that determine how much your investment will grow are the principal amount, the interest rate, and the time period. Compound interest allows money to grow exponentially, which means that the longer the investment period, the more significant the growth. Real-Life Examples of Compound Interest Let us consider a simple example to illustrate the power of compound interest. Suppose you invest $1.000 at an annual interest rate of 5%. After the first year, you will have earned 50 USD in interest ($1.000 * 0.05), resulting in a new balance of $1.050. With simple interest, the earnings would stop here, but with compound interest, the process continues. In the second year, you will earn 5% interest on the full $1.050, which means you will earn $52.50 in interest, for a new balance of $1.102,50. This cycle repeats itself, with the balance and interest growing each year. Over the course of 30 years, a $1.000 investment at 5% annual interest compounded annually would grow to $4.321,94. The exponential growth over time demonstrates the incredible power of compound interest. The frequency of compounding can also significantly impact the growth of an investment. Many investments compound interest daily, monthly, or quarterly. The more frequent the compounding period, the faster the investment will grow. For example, a $1.000 investment at 5% annual interest compounded quarterly over 30 years would grow to $4.486,98, demonstrating the benefits of more frequent compounding. Maximizing Compound Interest Potential There are several strategies for maximizing the potential of compound interest. Firstly, start investing as early as possible, as the exponential growth of compound interest accelerates over time. Even small, regular investments can lead to substantial gains over time. For instance, investing $100 per month at a 7% annual interest rate compounded monthly from age 25 to 65 would result in a balance of $262.481, even though the total contributions would only amount to $48.000. Next, invest consistently and seek out investments with higher interest rates, which can significantly boost the growth of your investments. Finally, opt for more frequent compounding periods to accelerate your investment growth. By adhering to these strategies, you can make the most of compound interest and build substantial wealth over time. Compound Interest and Debt Management While compound interest can work wonders for wealth-building, it can also have negative consequences when it comes to debt. Credit cards, loans, and other forms of debt often compound interest, causing debt to grow rapidly if not managed properly. It is crucial to stay vigilant and make regular payments to prevent the negative effects of compound interest on debt. Conclusion In conclusion, compound interest is a powerful financial concept that can significantly impact your financial future. By understanding its principles, harnessing its benefits, and applying effective strategies, you can maximize your financial potential and secure a prosperous future. The key to success with compound interest lies in starting early, investing consistently, and being patient. Remember that small, consistent actions today can lead to enormous results in the future. It is crucial to research available investment options, assess your risk tolerance, and choose financial vehicles that align with your goals. By making informed decisions and leveraging the power of compound interest, you can make your money work for you and achieve financial success. As a final note, it is essential to consider the impact of compound interest on debt management. Proper planning and disciplined payment schedules can help you mitigate the negative effects of compound interest on your financial well-being. By staying diligent and actively managing your finances, you can ensure a healthy balance between your investments and debts, paving the way for a bright and secure financial future. Whether you are a seasoned investor or just beginning your financial journey, understanding the incredible potential of compound interest is invaluable. Embrace this financial marvel and harness its power to achieve your financial goals and secure a prosperous future for yourself and your loved ones.
Editors' picks
OANDA:XAUUSDEducation
by financialflagship
16
Why you should NOT view LOSSES as LOSSESI want you to stop thinking of trading losses as losses. It’s having an effect on you emotionally and is stopping your full potential of growth. Financial trading, like any other business or aspect of life, involves costs. That’s just life. In business, there are costs associated with equipment, rent, salaries, taxes, and legal fees. In our personal lives, there are costs associated with household expenses like rent, groceries, insurance, medical fees, taxes, and repairs. Similarly, in trading, there are costs associated with normal losses, daily interest charges, and drawdowns. It’s crucial to remember that losses are an inevitable part of trading and should be viewed as a necessary cost of doing business. Just as a business owner must invest money in equipment, rent, and salaries to run their business, traders must also be prepared to invest money in losses in order to be successful in the long run. If you try to avoid taking a trade, because you are worried about the loses, you will miss out on the greater rewards for when profitable trading opportunities come your way. When you see trading losses as costs… You will be able to take a more objective and strategic approach to the trading decisions that you make going forward. This can help you to minimize losses and maximize profits over time. So there are few things you need to do to mange your costs (losses) emotionally and physically. Action #1: Set realistic stop losses Place your stop loss with every trade and never risk more than 2% of your portfolio per trade. Action #2: Understand the concept of Risk to Reward better. The risk-reward ratio is the ratio of the potential profit of a trade to the potential loss. By understanding the risk-reward ratio, traders can make more informed trading decisions and can better manage their risk. Action #3: Don’t feel your losses If you feel 2% is too much to risk, risk less! Get to the point with your life where a loss isn’t that much as with where the reward isn’t worth celebrating. Overtime, you’ll slowly grow your account and your mind too.
TVC:SA40Education
by Timonrosso
Market Sentiment and Trend Prediction System. Predictive Model. The codes listed below (free&easy;), detailed steps to follow for developing the event prediction system: 1. **Collecting Data**: we will need to gather data from various sources. We can use Python-based web scraping libraries like Beautiful Soup and Scrapy to extract data from news websites and social media platforms (scraping exports data from websites, it is safe and legal, but better contact website admins and ask for authorization) 2. **Cleaning and Preprocessing Data**: After collecting the data, we need to clean and preprocess it. We can use Python libraries like Pandas and NumPy to remove duplicates, missing values, and irrelevant information. 3. **Natural Language Processing**: Once the data is cleaned, we can use natural language processing (NLP) techniques to extract insights from the text data. For example, we can use the NLTK library to perform tokenization, stemming, and lemmatization on the text data. 4. **Model Building**: We can use machine learning algorithms like Random Forest, Gradient Boosted Trees, or Support Vector Machines (SVMs) to build predictive models. These models can help us predict the occurrence of an event or the sentiment associated with a specific topic. 5. **Dashboard and Visualization**: Finally, we can create an intuitive dashboard using tools like Tableau or Power BI to display the analyzed data in real-time. We can use interactive visualizations like bar graphs, pie charts, and heat maps to provide users with a clear understanding of the events and their impacts. 6. **Testing and Deployment**: Once the system is developed, we need to test it thoroughly to ensure that it is delivering the expected results. We can use various testing frameworks like pytest, unittest, or nosetests to automate the testing process. Once testing is completed, we can deploy the system to the production environment. 7. **Regular Maintenance and Updates**: We also need to ensure that the system is continuously monitored. The codes : Termux (the app is in playstore, github etc, to excute python files, or commands,for every step, some general commands and libraries that you might find useful: 1. Collecting Data: - To install Scrapy, run `pip install scrapy`. - To install Beautiful Soup, run `pip install beautifulsoup4`. - To scrape data from a webpage using Scrapy, run `scrapy crawl `. - To scrape data from a webpage using Beautiful Soup, use Python's built-in `urllib` or `requests` module to fetch the webpage's HTML. Then, use Beautiful Soup to parse the HTML and extract the relevant data. 2. Cleaning and Preprocessing Data: - To install Pandas, run `pip install pandas`. - To install NumPy, run `pip install numpy`. - To remove duplicates, use Pandas' `drop_duplicates()` function. - To remove missing values, use Pandas' `dropna()` function. - To filter out irrelevant data, use Pandas' indexing functions like `loc` and `iloc`. 3. Natural Language Processing: - To install NLTK, run `pip install nltk`. - To perform tokenization, run `nltk.tokenize.word_tokenize(text)`. - To perform stemming, run `nltk.stem.PorterStemmer().stem(word)`. - To perform lemmatization, run `nltk.stem.WordNetLemmatizer().lemmatize(word)`. 4. Model Building: - To install scikit-learn, run `pip install scikit-learn`. - To instantiate a Random Forest classifier, run `from sklearn.ensemble import RandomForestClassifier; clf = RandomForestClassifier()`. - To fit the model to the data, run `clf.fit(X_train, y_train)`, where `X_train` is the input data and `y_train` is the output labels. - To use the model to make predictions, run `clf.predict(X_test)`. 5. Dashboard and Visualization: - To install Tableau, follow the instructions on their website. - To install Power BI, follow the instructions on their website. - To create a bar graph in Python, use the `matplotlib` library: `import matplotlib.pyplot as plt; plt.bar(x, y); plt.show()`. - To create a pie chart in Python, use `plt.pie(values, labels=labels); plt.show()`. - To create a heat map in Python, use `sns.heatmap(data, cmap='coolwarm'); plt.show()` (assuming you have installed the Seaborn library). These are general commands and libraries that you can use as a starting point. If you need me to explain how to use termux, let me know.
Education
by Moroccolover
3
DEVELOPING A CONFIDENT TRADING MINDSET✳️ One of the key ingredients to successful trading is confidence, but many people lack it. Why? I'll be talking about this in this post. Having a plan is the fundamental cornerstone of confidence. Fear and hesitation are caused when you are unsure about what to do. I'm surprised by how many traders just work without a defined strategy. Your trading plan should be written down as the first phase. It should be as simple as, "If A occurs, I will do B; if B does not occur, I will do C." You must eliminate every assumption. This is the strength of pre-established rules, and after they have been tested and proven, they will support your future confidence and discipline. ✳️ Backtesting and optimization of the system You won't have any confidence moving forward if you haven't tested your plan, established its historical viability, and optimized it to the best of your ability using the data. This is because you need to know what you're doing and what to anticipate. Your confidence will be built on the basis of a strategy's study, testing, and optimization steps. By missing this step, you are demonstrating a lack of dedication to your trading business and, thus, are not treating it like a business. Starting with the company comparison. Would you launch a company and sell a random product before spending the time and effort to demonstrate its viability? Obviously not. And it needs to be similar to trading. If you don't test, you simply don't want it badly enough, and I encourage you to stop right away. There is no fast way to success; you must be prepared to put in the time to test, develop, and comprehend all of the system's elements. ✳️ The source of confidence is the outcome Results provide extra confidence, so you must see your strategy in action before you can follow it. As a result, you must be able to stick to your method until you have a large enough sample size to notice the benefits. You must proceed gently and progressively raise your exposure as your method establishes itself. This is one way to build confidence, but how will you get there if you give up after a couple of losses, particularly big losses, all because you got into live trading too much early on? So, this is an important one thing: you must let the strategy show you that it works. As the method works, gradually increase the exposure. You want to start live trading with the smallest amount affordable. My advice is to increase up in increments of 0.05% 0.10% 0.25% 0.5% 0.7% every time the technique produces X- Amount, for example, 10%, and so on until you find the risk that you are most comfortable with trading. Remember that the ultimate amount should be one that you can afford to lose no matter how much you lost. You should be able to get a good night's sleep. Confidence is gained gradually through testing and allowing the system to give proof, as well as gradually increasing exposure to your acceptable risk limit. Taking the right risk that will not cause you feelings of anxiety is critical to maintaining your confidence. If you lose 50% of the amount you have in a single losing trade, you're unlikely to be very confident, and if you're diving into trading with full risk, it's an indication of a lack of emotional control and an attempt to speed up the process. You must ask yourself why. And how badly do you want to be a trader? Because failing to complete the homework indicates a lack of dedication. ✳️ Evidence gives you confidence in trading Starting into trading with no past performance or live data is one of the main reasons most people lack confidence. However, if you go in with a well-researched and tested plan, you will have something to refer to in your live trade. Are you experiencing a drawdown? So, what does my data indicate? Oh, that's completely typical. Okay, keep going. Instead of rejecting the plan or altering the system, as 95% of people do. Instead, you are now confidently pushing forward because you have the data and statistics to back you up. Once you have the statistics, you will have confidence, and when you are going through a difficult period, such as a drawdown, you will only have to ask yourself these two questions. ▶️ Am I sticking to the trading plan? ▶️ Am I controlling my risk? If you can respond yes to both questions, you are safe. Continue your trading journey.
Education
by DeGRAM
5
Top Mentors in Finance and BusinessMentors play a critical role in guiding individuals and businesses towards achieving their goals. Whether it's in finance, business strategy, market analysis, or cryptocurrency, the insights and experiences of successful mentors can be invaluable assets in navigating through complex situations and making informed decisions. In this article, we will explore some of the most popular mentors in these fields and highlight their contributions to their respective industries. From Warren Buffett to Andreas Antonopoulos, these mentors have made significant impacts and continue to inspire and educate aspiring individuals and businesses around the world. Finance Mentors: 1. Warren Buffett - Widely recognized as one of the most successful investors of all time, Warren Buffett is the chairman and CEO of Berkshire Hathaway. He has a long-term investment approach and has made successful investments in companies such as Coca-Cola, American Express, and IBM. 2. Ray Dalio - Founder of Bridgewater Associates, one of the world's largest hedge funds, Ray Dalio is a successful investor and philanthropist. He is also known for his unique investment principles, such as "radical transparency" and "radical honesty." 3. Jim Rogers - A well-known investor and author, Jim Rogers has written several books on finance and investing, including "Investment Biker" and "Adventure Capitalist." He is also the co-founder of the Quantum Fund with George Soros. 4. Nassim Taleb - A former trader, Nassim Taleb is the author of the best-selling book "The Black Swan," which explores the impact of unpredictable events in financial markets. He is also a proponent of the idea of "anti-fragility," which suggests that systems should be designed to benefit from shocks and volatility. 5. Paul Tudor Jones - Founder of Tudor Investment Corporation, a hedge fund with a long and successful track record, Paul Tudor Jones is a prominent investor and philanthropist. He is also known for his philanthropic work through the Robin Hood Foundation. Business Strategy Mentors: 1. Michael Porter - A leading authority on business strategy, Michael Porter is a Harvard Business School professor and author of several books on competitive strategy, including "Competitive Advantage" and "The Five Forces." Clayton Christensen - A Harvard Business School professor and author of several books on innovation and disruptive technologies, Clayton Christensen passed away in 2020 but remains a highly respected mentor in the field of business strategy. 2. Gary Hamel - A management expert who has written extensively on innovation and strategy, Gary Hamel is a founding member of the Management Innovation eXchange and the author of several influential books, including "Leading the Revolution." 3. W. Chan Kim - Co-author of the best-selling book "Blue Ocean Strategy," W. Chan Kim advocates for creating new market spaces rather than competing in existing ones. He is also a professor of strategy and international management at INSEAD. 4. Anita Elberse - A Harvard Business School professor who specializes in the entertainment and media industries, Anita Elberse is the author of the book "Blockbusters," which explores the strategies used by successful entertainment companies. Market Analysis Mentors: 1. Peter Lynch - A former fund manager who is known for his investment strategies and his ability to identify undervalued companies, Peter Lynch is the author of the best-selling book "One Up on Wall Street" and "Beating the Street." 2. John Murphy - A technical analyst who has written several books on the subject, John Murphy is known for his work on intermarket analysis and is the author of "Technical Analysis of the Financial Markets." 3. Martin Pring - Another technical analyst who has written extensively on market indicators and technical analysis, Martin Pring is the author of several books, including "Technical Analysis Explained" and "The Complete Guide to Technical Analysis." 4. Ralph Acampora - A chartered market technician who is known for his work on chart analysis and market cycles, Ralph Acampora is a frequent guest on financial news networks and the author of "The Technical Analysis Course." 5. Ed Seykota - A former trader and one of the pioneers of computerized trading systems, Ed Seykota is known for his work on trend-following and Cryptocurrency Mentors: 1. Andreas Antonopoulos - A prominent cryptocurrency educator, Andreas Antonopoulos is the author of several books, including "Mastering Bitcoin" and "The Internet of Money." He is also the host of the "Let's Talk Bitcoin" podcast and has given numerous talks on the subject. 2. Vitalik Buterin - The founder of Ethereum, Vitalik Buterin is a prominent figure in the cryptocurrency world. He has been involved in the development of several blockchain-based projects and is known for his work on smart contracts. 3. Charlie Lee - The founder of Litecoin and a former Google engineer, Charlie Lee is a prominent figure in the cryptocurrency community. He is also a vocal advocate for the adoption of cryptocurrencies as a means of payment. 4. Cameron and Tyler Winklevoss - The Winklevoss twins are known for their early investment in Bitcoin and their efforts to establish regulated cryptocurrency exchanges. They are also the founders of Gemini, a leading cryptocurrency exchange. 5. Changpeng Zhao - The founder and CEO of Binance, one of the world's largest cryptocurrency exchanges, Changpeng Zhao is a prominent figure in the cryptocurrency world. He is also a vocal advocate for the adoption of cryptocurrencies as a means of payment and has been involved in several blockchain-based projects. In conclusion, the above mentors have made significant contributions in their respective fields and are highly respected in their industries. While their teachings and philosophies may differ, they have all played a crucial role in shaping the way we think about finance, business strategy, market analysis, and cryptocurrencies. Aspiring individuals and businesses can benefit greatly from their insights and experiences.
SP:SPXEducation
by Julien_Eche
What influences the price of OIL?In today’s volatile global market, the price of oil can be affected by a variety of factors. From wars and international trade agreements to financial market dynamics and global economic outlook, understanding what influences the price of oil is essential for both governments and individuals alike. In this post, we will look at how geopolitical factors, financial market dynamics, the global economy, oil producers’ strategies, and weather events all play a role in determining the cost of one of our most valuable resources. By examining each factor in turn, we can gain insight into why prices fluctuate so drastically over time and how to respond appropriately when they do. Read on to learn more about what influences the price of oil. Geopolitical Factors: Geopolitical factors have a major impact on oil prices, as the global demand for oil is heavily influenced by political events and decisions. The instability of certain regions and countries can reduce their production levels, leading to a rise in prices. International trade agreements can also affect oil prices: the recent US-China trade war has had a significant impact on oil markets, with supply chain disruptions causing uncertainty and increased volatility. The presence or absence of certain governments in oil-producing nations can also influence prices dramatically. For example, the toppling of Muammar Gaddafi's regime in Libya caused a sharp spike in global crude prices due to its immediate effect on oil production levels. Similarly, political unrest in Iraq and other Middle Eastern countries have resulted in supply disruptions that have pushed up prices. Lastly, global political events such as wars, coups, and other acts of aggression can disrupt the production of oil and drive up its price. For instance, when the US imposed sanctions on Iran following its nuclear program activities, it caused an immediate jump in crude prices due to fears about potential supply disruptions from Iran’s fields. In addition to these direct effects on production and supply levels, geopolitical events often lead to market speculation which further drives up prices even if there is no actual disruption to supplies. Supply and Demand The balance between global supply and demand for crude oil plays a key role in determining the price of oil. Changes in global supply can cause shifts in prices, such as when OPEC (Organization of the Petroleum Exporting Countries) countries agree to reduce production, or natural disasters affect output from offshore rigs or refineries. On the other hand, changes in global demand can also have an impact on oil prices. For example, economic booms can cause an increase in demand for fuel, while recessions tend to weaken it. When demand is high and supply is low, then oil prices tend to be higher as customers are willing to pay more for limited resources. Conversely when supplies are plentiful and demand is low, then prices decrease as suppliers compete with each other by offering lower rates. The interplay between these two factors is what drives the price of oil. It's important to note that both short-term and long-term forces influence the price of oil; geopolitical events may create temporary disruption but underlying trends are always at play too. For instance, if there's a sudden increase in production due to new technologies used by producers or a drop in consumption due to changing energy needs, then this could result in long-term changes to the price of crude oil. In addition to this kind of market fundamentals affecting the cost of oil on a macro level, some countries may choose to manipulate their own domestic supplies which can have significant implications on regional markets as well as global ones. Some governments even use subsidies or taxes on petroleum products as part of their fiscal policy strategies – practices which can help cushion consumers against fluctuations in international markets but could also lead to imbalances over time if left unchecked. Overall, understanding how supply and demand dynamics interact with one another helps explain why prices may go up or down depending on current events and market conditions – knowledge which provides valuable insight into how companies should approach pricing strategies for their goods and services around energy costs. Economic Sanctions Economic sanctions are a strategic tool wielded by governments to implement international law or force compliance. This approach can take the form of trade restrictions, investment prohibitions, financial transaction limitations, travel bans and technological access constraints. The application of economic sanctions can have a major effect on global oil prices - as evidenced in 2018 when US-imposed sanctions caused Iranian exports to plunge, with an ensuing surge in oil prices across the world. Similarly, US-driven sanctions against Venezuela had a similar effect on pricing the following year. It is not only reductions in production that influence price movement; sentiment can also play a role. Sanctions against Iran saw market sentiment affected, resulting in increased volatility and more expensive oil for consumers. If an embargo were imposed on a major producer such as Saudi Arabia or Russia there could be widespread disruption to supplies and increased pricing for everyone involved. Even if production isn't hit directly by particular sanctions then long term trends may still be affected: An embargo on Saudi Arabia would likely lead to reduced crude inventories over time as production levels adjust accordingly causing higher prices across the board down the line. This could stimulate demand for renewable energy sources like solar or wind power which would decrease global demand for fossil fuels while bringing down crude costs overall. Overall it is clear that economic sanctions can have both short term and long lasting effects on global oil prices - depending upon their scope, duration and severity. Therefore businesses tied up with energy trading or others parts of the industry should stay vigilant regarding these types of events so they are prepared for any disruptions that may arise from them ahead of time. Political Unrest Political turmoil can have a significant influence on the cost of oil, producing instability in the market and creating price volatility. Elections, uprisings, strikes or civil wars can cause disruptions to supply chains, resulting in higher costs for purchasers. Additionally, alterations to United States foreign policy and government regulations can also affect the oil industry. For instance, when the US exited the Iran nuclear deal in 2018 and placed sanctions on Iranian oil exports, international petroleum prices rose significantly. Oil is traded globally so unrest in one country may cause an impact on oil costs around the world. In 2019, demonstrations against fuel tax hikes precipitated a global crude oil increase due to worries about supply interruptions from Total SA's leading refinery in France. Similarly, Yemen’s civil war has caused upheaval across the globe - with Saudi Arabia stopping most of its crude shipments via the Red Sea due to safety issues connected to Houthi rebels. Political turbulence could also lead to a decrease in investment into energy infrastructure projects such as pipelines or refineries - meaning that even if there is demand for petroleum products they might not reach customers because of logistics issues. This could result in shortages of certain goods and consequently greater fees for buyers. Overall it is evident that political unrest has wide-reaching consequences for the price of oil both locally and internationally. It is crucial for businesses working within this sector to keep up with current events so that they are better prepared for any potential disturbance or cost variations that may occur as a result of political instability around the world. Financial Market Dynamics: Financial markets play an important role in influencing the price of oil. Large institutional investors, such as pension funds and hedge funds, often make decisions based on short-term trends in the energy sector. When these investors buy or sell futures contracts for oil, it can affect the supply and demand balance of crude oil and thus its price. The futures market is another factor that affects the price of oil. Futures traders purchase contracts to buy or sell oil at a later date, which impacts crude supply and demand levels. Speculation on OPEC production cuts can also have an effect on oil prices, as can political unrest or economic sanctions against certain countries. Weather and natural disasters are another important factor to consider when discussing financial market dynamics. In some cases, extreme weather conditions can lead to disruptions in production, supply chain issues, or increased demand due to cold snaps or heatwaves. Natural disasters such as hurricanes or floods can also cause major disruption to infrastructure and temporarily reduce supplies of certain commodities including crude oil. Finally, global economic outlooks may influence both investor sentiment and consumer spending patterns which could lead to changes in demand levels for commodities like oil over time. As such it is important for businesses in the energy trading industry to stay up-to-date with global developments so they can make informed decisions when it comes to pricing strategies related to energy costs. Hedge Funds and Speculators Hedge funds and speculators are influential participants in the energy market. They are responsible for buying and selling oil contracts as well as futures to take advantage of price fluctuations. By doing so, they can make profits from their trades but also assume risk if markets turn against them. Moreover, their activities may be affected by external developments such as geopolitical events or economic sanctions imposed by governments. Therefore, it is important for investors to keep a close eye on these factors in order to make informed decisions about pricing strategies for oil-related goods and services. Futures Markets Futures markets are an important factor in influencing the price of oil, as they can provide a platform for buyers and sellers to make profits or protect against price fluctuations. A futures market is a type of financial market that enables participants to buy and sell commodities, such as oil, at predetermined prices for delivery on a future date. In the energy sector, large institutional investors and hedge funds use futures markets to speculate on the direction of oil prices. By buying contracts today with an expectation that prices will rise in the future, these investors can increase their profits from rising oil prices. On the other hand, hedgers use futures markets to protect themselves from unexpected drops in price by locking in current prices for delivery at a later date. Speculative activity in futures markets can lead to large swings in the price of oil because participants have greater influence on pricing than actual demand and supply. This means that speculation can cause oil prices to move independently of actual supply shortages or excesses. Regulatory bodies also use futures markets to set limits on trading and production levels, which impacts prices and volatility levels. For businesses involved in energy trading it is important to keep track of developments in futures markets as these movements can have significant impacts on pricing strategies. Businesses should also be aware of speculation by large institutional investors who are looking to profit from changes in oil prices over time. Understanding how these activities are impacting market sentiment will help businesses make informed decisions about pricing strategies related to energy costs. Global Economy: The global economy is a major factor in the fluctuating price of oil. Investor confidence, currency values, GDP growth and trade disruptions all have an impact on pricing. Additionally, as alternative energy sources become more accessible and affordable they can contribute to a decrease in demand for traditional fossil fuels such as oil. Companies involved in energy trading must stay informed of these developments to ensure their goods and services related to energy costs remain competitively priced. Currency Values The value of a country’s currency can have a direct impact on the price of oil, with fluctuations in exchange rates influencing import costs and buying power. A stronger currency will enable an importing nation to buy more oil for less money, whereas a weaker currency will require more of the local currency to purchase the same amount of oil from other countries. Currency devaluation can also affect the cost of imported goods, as it reduces the buying power of a nation’s citizens and businesses. This means that each dollar or euro is worth less on the global market and makes it more expensive to purchase foreign-made goods, including oil. If countries devalue their currencies, they may have to pay higher prices for imports, which could cause oil prices to rise as well. On the other hand, when a country’s currency appreciates in value, it can help reduce import costs and increase buying power. This makes imported goods cheaper for consumers and businesses alike, which could lead to lower prices for oil in those countries. In addition, appreciation of a nation’s currency can make its exports more attractive to foreign buyers who can now obtain them at relatively lower prices than before. This could help drive up demand for domestically produced crude oil and result in increased revenues for exporting nations. When considering how currency values can influence the price of oil, it is important to remember that these effects are often short-term in nature and only apply when purchasing from abroad. Furthermore, changes in exchange rates are not necessarily an indication that domestic production costs have changed significantly - rather they reflect shifts in market sentiment towards one particular currency compared with all others around the world. Therefore companies should remain aware of current exchange rate trends while also monitoring their own costs over time so they are able to adjust pricing strategies accordingly depending on changing market conditions Oil is now the biggest staple on the world stage. Its importance is difficult to overestimate. The entire economy is based on indicators related to oil. But time passes and the economy changes its face and new favorites enter the arena. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TVC:UKOILEducation
by Lingrid
10
PMI Data & How it Effects DXYJust to summarise quickly what the ‘Purchasing Manager Index’ is, it’s a monthly data release by the ISM. PMI data is based on 5 survey areas: new orders, inventory levels, production, supplier delivery & employment. PMI data ranges from 0-100. A PMI reading ABOVE 50 represents expansion in the economy. Whereas, a reading BELOW 50 represents contraction. Below is the PMI data for March 2023, which came in at 47.7 which shows the economy is contracting. Now to show the importance of this, let me show you the last few times the PMI dropped below 50👇🏻 2008 - The Financial Market Crash🩸 Early 1980’s - Sky High Inflation🩸 Mid 1980’s - Recession which left unemployment at 7.5%. The recession was caused by tight monetary policy from the government , in an ‘effort’ to fight high inflation🩸
TVC:DXYEducation
by BA_Investments
Factor Investing: An IntroductionThe concept of factor investing has garnered significant attention in recent years as an innovative approach to portfolio management. The idea behind factor investing is that it seeks to uncover the primary sources of return in investment portfolios, and to explicitly target these sources, known as factors. By systematically identifying and targeting these factors, investors can achieve improved portfolio diversification, risk management, and potentially, enhanced returns. Factor investing can be traced back to the Capital Asset Pricing Model (CAPM) introduced by Sharpe (1964) and Lintner (1965). The CAPM was a groundbreaking theory that posited that a security's expected return is directly related to its level of systematic risk, measured by the beta coefficient. The concept of beta provided an early example of a factor in investing. In recent years, factor investing has evolved and expanded considerably. Researchers and investment managers have identified numerous factors that drive investment performance, such as quality, low volatility, and liquidity. Primary Factors in Investing Market : The market factor represents the overall market return and is the core factor that drives investment performance. The market factor, or beta, is the exposure of an asset to the general movement of the market. Size : Size is the factor that focuses on the market capitalization of companies. Small-cap stocks typically offer higher potential returns than large-cap stocks, although they also tend to exhibit higher volatility. Value : Value investing targets stocks that are considered undervalued relative to their intrinsic value. Value stocks generally have low price-to-earnings, price-to-book, and price-to-cash-flow ratios, and they tend to outperform growth stocks over time. Momentum : The momentum factor captures the tendency of stocks that have recently outperformed to continue to do so. Momentum investing strategies aim to capture this trend by buying recent winners and selling recent losers. Quality : Quality is a factor that focuses on financially stable and well-managed companies. Quality stocks typically have high profitability, low leverage, and stable earnings growth. Low Volatility : Low volatility investing aims to identify stocks that have exhibited low price volatility over time. Low-volatility stocks often deliver better risk-adjusted returns than high-volatility stocks Benefits of Factor Investing Factor investing offers several benefits to investors, such as: Improved diversification : By targeting specific factors, investors can diversify their portfolios across various sources of return and risk, thereby reducing overall portfolio risk. Enhanced risk management : Factor investing enables investors to better understand the underlying risks in their portfolios and to manage those risks more effectively. Potential for outperformance : By systematically targeting well-established and robust factors, investors may achieve higher returns than traditional market-cap-weighted indexes. Cost efficiency : Factor investing strategies are often implemented using rules-based approaches, such as smart-beta or quantitative strategies, which can be more cost-effective than traditional active management. Transparency : Factor investing strategies are typically more transparent than traditional active management, as they rely on well-defined, rules-based methodologies that are easier for investors to understand and monitor. Potential Risks of Factor Investing While factor investing offers many benefits, it is important to be aware of the potential risks associated with this approach: Factor timing : Just like market timing, attempting to time factor exposures can be difficult and often leads to underperformance. Investors should be cautious about trying to predict when a particular factor will outperform or underperform. Overfitting : The process of identifying factors can be susceptible to overfitting, where a model is tailored too closely to historical data and may not perform well in the future. Crowding : As more investors adopt factor investing strategies, the potential for crowding in certain factors may increase, leading to diminishing returns or increased risk. Model risk : The effectiveness of factor investing strategies relies on the accuracy and stability of the underlying factor models. If the models are not robust or if they become less effective over time, the strategy's performance may suffer. Diversification risk : While targeting specific factors can help diversify a portfolio, it may also expose investors to concentrated risk if those factors underperform or experience periods of heightened volatility. Factor investing has revolutionized the way investors approach portfolio management, offering improved diversification, enhanced risk management, and the potential for outperformance. By identifying and targeting the primary drivers of investment performance, factor investing provides a systematic and transparent framework for constructing and managing portfolios. Trade with care. If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
AMEX:GSLCEducation
by financialflagship
Price / Earnings: Interpretation #1In one of my first posts , I talked about the main idea of ​​my investment strategy: buy great “things” during the sales season . This rule can be applied to any object of the material world: real estate, cars, clothes, food and, of course, shares of public companies. However, a seemingly simple idea requires the ability to understand both the quality of “things” and their value. Suppose we have solved the issue with quality (*). (*) A very bold assumption, I realize that. However, the following posts will cover this topic in more detail. Be a little patient. So, we know the signs of a high-quality thing and are able to define it skilfully enough. But what about its cost? "Easy-peasy!" you will say, "For example, I know that the Mercedes-Benz plant produces high-quality cars, so I should just find out the prices for a certain model in different car dealerships and choose the cheapest one." "Great plan!" I will say. But what about shares of public companies? Even if you find a fundamentally strong company, how do you know if it is expensive or cheap? Let's imagine that the company is also a machine. A machine that makes profit. It needs to be fed with resources, things are happening in there, some cogs are turning, and as a result we get earnings. This is its main goal and purpose. Each machine has its own name, such as Apple or McDonald's. It has its own resources and mechanisms, but it produces one product – earnings. Now let’s suppose that the capitalization of the company is the value of such a machine. Let's see how much Apple and McDonald's cost today: Apple - $2.538 trillion McDonald's - $202.552 billion We see that Apple is more than 10 times more expensive than McDonald's. But is it really so from an investor's point of view? The paradox is that we can't say for sure that Apple is 10 times more expensive than McDonald's until we divide each company's value by its earnings. Why exactly? Let's count and it will become clear: Apple's diluted net income - $99.803 billion a year McDonald's diluted net income - $6.177 billion a year Now read this phrase slowly, and if necessary, several times: “The value is what we pay now. Earnings are what we get all the time” . To understand how many dollars we need to pay now for the production of 1 dollar of profit a year, we need to divide the value of the company (its capitalization) by its annual profit. We get: Apple - $25.43 McDonald’s - $32.79 It turns out that in order to get $ 1 earnings a year, for Apple we need to pay $25.43, and for McDonald's - $32.79. Wow! Currently, I believe that Apple appears cheaper than McDonald's. To remember this information better, imagine two machines that produce one-dollar bills at the same rate (once a year). In the case of an Apple machine, you pay $25.43 to issue this bill, and in the case of a McDonald’s machine, you pay $32.70. Which one will you choose? So, if we remove the $ symbol from these numbers, we get the world's most famous financial ratio Price/Earnings or P/E . It shows how much we, as investors, need to pay for the production of 1 unit of annual profit. And pay only once. There are two formulas for calculating this financial ratio: 1. P/E = Price of 1 share / Diluted EPS 2. P/E = Capitalization / Diluted Net Income Whatever formula you use, the result will be the same. By the way, I mainly use the Diluted Net Income instead of the regular one in my calculations. So do not be confused if you see a formula with a Net Income – you can calculate it this way as well. So, in the current publication, I have analyzed one of the interpretations of this financial ratio. But, in fact, there is another interpretation that I really like. It will help you realize which P/E level to choose for yourself. But more on that in the next post. See you!
Editors' picks
NASDAQ:TSLAEducation
by Be_Capy
11
BIG TIP OF THE DAY - Ride Winners and Cut losers BIG TIP OF THE DAY: If you want to ride up winners, lock in profits and reduce losers here is what to do. 1. Place your Entry Stop loss and Take profit (But have a TP 2 and TP 3 in place). 2. When the price approaches TP 1 (Close half of your position and move your stop loss to Breakeven) 3. When the price hits TP 2 (Close half of your position and move your stop loss half-way) 4. When the price hits TP 3 (Close your entire position). This is how to ride your profits and winners.
TVC:SA40Education
by Timonrosso