Category: behavioral finance
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Market Sentiment. I feel that you should pay attention.
| | behavioral finance
Market sentiment is a broad term that encompasses the prevailing feeling that investors have about a market. Measuring this “feeling” can be accomplished in a variety of ways. CNNMoney has a Fear and Greed Index that displays this in a simple format showing when investors are most willing to take on risk or hunker down. Modern takes for this type of strategy will take keyword data from financial press articles, interviews, or Twitter trends to make investment decisions as well. Some of these firms use Artificial Intelligence (AI) to parse this in real time to place trades across all markets. … Read more Market Sentiment. I feel that you should pay attention. -
Stock Market Confidence Off the Charts – But Also Lurking Fear
| | behavioral finance
The Yale International Center for Finance conducts monthly surveys of individual and institutional investor’s confidence in the stock market. While there are other surveys available, the Yale Center provides a long term view of what investors may think about the markets. … Read more Stock Market Confidence Off the Charts – But Also Lurking Fear -
What are the Biggest Errors in Trading a CTA Could Make?
| | behavioral finance, Commodities, CTA, financial advisor, Fundamental, Options, sentiment, sortino ratio
Success in trading is measured in terms of the growth of the account balance. A CTA is not expected to play God and call every twist and turn in the market correctly at all times. As a matter of fact, some professional and proven CTA’s systems are only correct 25-30% of the time and they still manage to pull huge profits out of the markets consistently. What distinguishes the “Pros” from their less successful colleagues is their ability (a) to recognize an error promptly and (b) to take necessary action to correct and prevent the error from becoming a financial … Read more What are the Biggest Errors in Trading a CTA Could Make? -
What is One Thing Profitable CTA’s Focus On That Average Traders Don’t?
| | behavioral finance, Commodity Pool Operator, Commodity Trading Advisor, risk management, systematic
I think this article on trading and the markets will be slightly different than anything you have read on the subject, in that the main focus is on “Losing”. So, why an article on losing? First, my belief is that people learn the most from their mistakes or through adversity, if they are willing to open their eyes and confront what’s going on around them and the role that they play in the outcome. Specifically, in regards to the markets, apparently people have at least some knowledge about making money. However, since most people have lost more money than they … Read more What is One Thing Profitable CTA’s Focus On That Average Traders Don’t? -
Money Management & Contrary Opinion Trading
| | behavioral finance, sentiment
Contrary-opinion trading is perhaps the best solution to market madness and also noise in the markets; it is a “thinking-man’s” trading tool. A Contrarian is defined as: a person who takes an opposing view, especially one who rejects the majority opinion, as in economic matters. In a nutshell if a CTA / Money Manager is trading as a contrarian they are simply establishing positions opposite to the prevailing majority opinion, and trend in the market … Read more Money Management & Contrary Opinion Trading