Statistics, risk analysis, technical analysis, and fundamental analysis.
Studying movements to predict future trends.
Fundamental analysis - news, industry statistics, valuation using economic and financial indicators. Enter a position when the price falls below intrinsic value. It is usually a long-term position that lasts for years and is expected based on the actual result of current events compared to previous ones.
Technical analysis - evaluates future price movements through charts based on market movements. Most commonly used by daily traders or short-term investors, ranging from minutes, hours, or a few days. Trend lines, support or resistance levels, and price patterns are studied.
Graphs and drawing them using mathematical statistics and price observation.
All available information is taken into account, mostly from fundamental analysis, and prices and historical trends are looked at for behavior patterns. Often, none of the mentioned guarantees success, but understanding and using them can be a good indicator.
Lastly, emotions are an important part of investing. Without proper control, you can often make impulsive decisions that don’t align with your long-term goals.
It’s important to be disciplined and stick to your investment plan, even when the market shows significant oscillations or unexpected situations arise. Long-term success in investing usually comes through patience, consistency, and controlling emotions.
One key to successfully managing emotions in investing is education. The more you know about financial markets, investment strategies, and economic indicators, the more confident and capable you’ll feel in making informed decisions.
Another step towards managing emotional reactions is setting clear goals and strategies. When you have a clear investment plan and defined goals, it’s easier to avoid impulsive reactions to short-term changes in the market.
Finally, it’s important to have realistic expectations and accept the fact that there will be fluctuations in investing.
No investment is completely secure, but understanding the risks and opportunities can help you feel comfortable in your investment decisions.
In summary, awareness of how your psyche affects your investment decisions and developing strategies for managing emotions are key elements of successful investing.