Individual investor’s behaviour is extensively influenced by various biases. Many economist and investment advisors observe that biases in behaviour have been and will always have an impact on the judgement of investors.Human nature is complex, and behavioural finance studies how emotional, cognitive, and psychological factors influence investment decisions. Individual behaviours...
There will always be different ideas about how often to trade, how long to hold a position and when to enter or exit the market. Form of trading will be unique to individual trader. On broader way, there are four patterns generally a trader trades in the market. Trading StyleTime...
- Purchasing Power Parity (PPP) :The purchasing power parity (PPP) is perhaps the most popular method due to its indoctrination in most economic textbooks. The PPP forecasting approach is based off of the theoretical Law of One Price, which states that identical goods in different countries should have identical prices.For example, this law...
When it comes to investing for longer period in financial market, making decision without knowing the companies well; may result in losses. It is always important to evaluate a company on many parameters before making investment decision. Financial Statements – Balance Sheet, Profit & Loss statement, Cash Flow statement along...
Volatile times in capital markets cause difficulty in effective investment decision making and timing the market is a challenging job.Market participants always think to invest their money when market is low, so that they can earn returns when it starts rising. But predicting the market movement is uncertain and entering...
Technical analysis gives one of the best tools that traders can use to spot shifts within the market, allowing them to predict support and resistance levels within a predictable timeframe. Here are 6 chart price patterns that a trader should know 1. Double Top A double top is a pattern...
Economic recovery can take many forms, which is depicted using alphabetic notations. For example V-shaped recovery, U-shaped recovery, elongated U-shaped recovery, W-shaped recovery and L-shaped recovery. The fundamental difference between the different kinds of recovery is the time taken for economic activity to normalize. In this article, let’s try to take a brief...
Series – V: Why diversification is important for Portfolio. Diversification is a risk management strategy that involves investing across or within asset classes to reduce the overall risk of an investment portfolio. One of the most important foundational principles of investing is to ensure that you have a diversified portfolio....
Series – IV: Know THE COMPANY before investing Buying a stock means investing in a company. Most retail investors lose money because either they buy the stock for trading and if it results into loss, they become investor or they try to catch the falling knife. There could be a...
Series – III: Understanding Options – Call Option & Put Option Volatility is an inevitable part of stock markets; it is arguably one of the most misunderstood concepts in investing. Investing is inherently about risk, but risk works both ways. Each trade carries with it the risk, both, of failure and...
