Can anyone fully understand the markets?
Hello everyone, I hope you are feeling very well. Today I would like to comment some things regarding the market, and I clarify that I am not a specialist in this aspect, however I consider that it is something we should talk about, more considering that we make life in a social network that is based on a Blockchain and in which we can win cryptocurrencies, these are in a market that is highly volatile and that like any other market is unpredictable and can behave in very different ways than expected, leaving totally out of base even those who are considered great scholars of the area.
"The market can remain irrational longer than you can remain solvent " John Mainard Keynes
The previous sentence is from the one who was considered the most important economist of the last century, but it is still as valid as when it was enunciated, do not you see it like that? I start thinking about what is happening right now, with the prices of cryptos, and I ask myself: does anyone know exactly what is going to happen with the price of Bitcoin?, for example, or to be more specific and include another important issue that is 100% current, can anyone say what is going to happen with the price of water in the mid-term future after it is incorporated into the stock market?
In relation to water, I have read a lot of things lately, and some of them totally opposite to each other. There are those who say that the price of water is now going to be in a permanent increase, others oppose this that has just happened, alleging that having access to water is a fundamental right, and that nobody has the right to do that, even that these are strategies that will make water enter into a kind of monopoly...but which of these is or will be true?
As I see it, the market is ultimately represented by a large mass of people, who put up capital and through it speculate, and this is what gives the market this volatility.
For this market to exist there must be buyers and sellers, and obviously, we can see manipulations, but for this to happen there must be a great deal of capital moving in a specific direction. The possibility of manipulation will depend, of course, on the size of the market as such in terms of capitalization. Because in order to manipulate a market of trillions or billions of dollars you would have to have an amount that represents a large percentage of this total amount, and that's usually not the case.
However, you might not have the money to do it, but if you have a power that allows you to socially influence with rumors, for example, it would be a way to be able to manipulate some prices with false news, as has happened in other times.
With this that I have commented previously, what I intend to do is suggest that I see it as difficult for someone to predict exactly what will happen in a given market, given that times are highly changeable and the factors that determine a trend are diverse, and it is very difficult for a single person to have control over all these determinants of a market... I hope to make myself understood until now.
I say goodbye, waiting for your comments and contributions, which I will gladly receive.
Can anyone fully understand the markets?
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i really try to find a reason. but no chance. sometimes i think 🤔 who is playing a game with all the coins. but not sure. somehow i have the idea that is just a pandemic buy. everyone is sitting at home and they can’t spend money, so they have new hobby: buy crypto 🧐
Hi @artist-shazi
This would be a really expensive diversion, because they have entered hundreds of millions of dollars, here is another thing behind these prices, but also I do not know.
Thank you very much for commenting.
"The market can remain irrational longer than you can remain solvent"
Usually, this is a problem when your investment positions are contrarian. In the short run you might lose, money but in the long run you will make money because the markets will "behave" like they are supposed to. The only problem is that sometimes markets stay irrational for a long time and you run out of money before you can see your investment pay off the way it should. An example of this is if you short Bitcoin right now. You know that Bitcoin 37,000 is too much, but can you maintain a short position long enough to make money on the coin crash?
The other case where this is a problem is if you have a lot of money in the market and the market is headed downward for no rational reason and you know that once the market becomes rational again then your investments will head back. The only problem is you might be bankrupt before the market recovers. This is what I took that phrase to mean. What are you thoughts?
Hi @therecantonlybe1
This is really a very good commentary, thanks for that.
I always base, to make some investment, in that I cannot put money in game that I cannot lose, this is a basic rule.
A friend once told me, if you're going to put money into something, practically forget about it, you have to be patient, the best investments are those that are made for the long term, they generally end up giving good dividends. Based on this, there's a recent history, Bitcoin reached 20 thousand in December 2017. Never again has it been able to recover that price, and I'm waiting patiently, because it was able to do so, is seeing the fruits of that investment.
But if he invested expecting rewards very quickly, he couldn't wait all the time...
Hello @josevas217, It is certainly very difficult for a single person to control and predict a market, as has been speculated many times in Venezuela, without credible foundations.
However, if I can affirm that based on conditions of a variable socioeconomic environment or a particular market, a trend could somehow be conceived that can be taken as a decision criterion. In other lines, some people rather rely on historical records of transactions in the stock market (for example) and through statistical tools they manage to make predictions and hypothesis analysis to recreate a scenario and make a decision, whether to buy, sell, invest or reject.
But as an absolute science, there is no way to have a clear and real trend, because not all investors and owners of capital have the same interests or are in mutual agreement simultaneously, here the level of uncertainty in terms of markets and investments is born. .
This is a really interesting area, I think once I would have liked to dabble in the banking and finance area, hehehe
Great post.
You have to master the statistics, that's very good, so that you can have a little better notion of what's going to happen.
And yes, what it has to do with trading is based on history. Because in general what happens now has already happened at other times.
And based on that, forecasts are made, but it will never be 100% accurate.
Thank you very much for commenting.
There is still time to invest, to venture into this area.
I am strongly of the opinion that no single individual can conclude what will happen with the market but there are always going to be predictions here and there which of course is normal.
Hi @eni-ola
Having a notion or a prediction is feasible, of course, for that there is the study of similar situations that have already occurred, however, in this case there are not many options where to grab to make a prediction with certainty, it will always be based on probabilities.
Hi @josevas217
To say that one can know for sure what is going to happen in the markets is perhaps a little naive.
Even the most expert and knowledgeable, with very much years working and studying, occasionally when they invest they do so for the results obtained after the analysis of the variations suffered in the cryptomonies in a determined period.
However, we know that this does not give us 100% certainty of success in the operation.
Excellent reading.
Best regards
It is really complicated to be able to decipher what is going to happen in this world of investments, in spite of all the experience there is no analyst who is totally effective. The loss will always be there, the important thing is that the gains are greater than the losses.
Thank you for commenting.
One of the things that I deeply believe is that when an investment becomes evident to everyone it stops being a good investment, it is not a question of looking for magic or secret formulas, it is simply that in the markets, first the whales win, then the average investors and in the end the mass of people, all because of the veracity of the information, it is sad, but when the majority is sure that the BTC will reach 100K, "then run and get your investment out, because if not in a short time it will be a waste of money".
Information management in all this business is vital. And those who master the information fastest are the ones who will have the most benefit. The BTC is totally dominated by large investors, at least in my opinion.
Hello friend @josevas217 I agree I think nobody knows for sure what direction the market will take, but we can get an idea depending on the strategy we manage. Those who work with that must take into account that the losses are also part of the process. The year 2020 helped us realize that nothing is constant, there will always be changes. Greetings.
If, those who work in the trading area, for example, will always merit making predictions based on what has already happened, and losses can still come, this is not an exact science.
Without a doubt the markets are difficult to predict, some indicators can be used to give a clue of their behavior but nothing is certain, and in the cryptomoney market we have already seen that it is even more difficult.
Finance is a complex thing. There are many factors involved.
So, to have knowledge of all the factors that can affect a market is truly complicated.
As to what will happen in the market, we can't even predict the next second, otherwise everyone would have bought coins with certainty.
That there are manipulators of the market can not be denied, there are people who manipulate both with their huge capital and rumours.
Nevertheless, it is important to always keep in mind that crypto investment is highly volatile.
I'll advise moderation.
Market manipulations are a tremendous thing in trading, in any investment.
Especially if it is short term.
Rumors are also a tool to manipulate markets, the powerful use them to benefit, and they sure know how to do it.
But I don't think that's ever going to change.
It's very difficult to understand the market as the market is governed by the whales and sentiment we cannot predict any move.