Is It Indeed Possible To Know Market Timing? We might know the concept of market timing search process carried out by the traders or investors for the best timing to enter and exit the market, whether it is the stock market, bonds or currencies or futures.
Talking on the concept of market timing, which means essayed market participants from Step 2 Wealth System traders and investors know the right time to enter and exit from the market and not the working hours of the markets. Investors have repeatedly since the creation of the various financial markets to try to predict future trends of financial assets to search for the best times to enter and exit from the market in order to achieve the greatest possible return.
Therefore these individuals have developed multiple methods and theories in an attempt to anticipate price trends. It is still currently the concept of market timing is known as a continuing debate between the parties that support this concept and the parties who claim that market timing irrelevant in Step 2 Wealth Scam investment and trade. In this article we will talk about the concept of market timing does actually can be used to predict the prices of assets in the various financial markets
What is market timing?
We might know the concept of market timing search process carried out by the traders or investors for the best timing to enter and exit the market, whether it is the stock market, bonds or currencies or futures. Through the study of the technical data and historical price of the asset or through a macro-economic data, and to try to predict the future direction of this asset.
And usually does these traders to trade or invest in the short or medium term. It aims traders through the process to reduce their exposure to risk by trying to purchase at the lowest price possible and sell at the highest possible level, and vice versa in the case of entering into a short sale. These traders is not based on the underlying data is usually an asset, but an attempt to take advantage of the fluctuations that occur only in the short term.
Is market timing actually possible?
According to many investors, the market timing is impossible, and most of these investors are investors who are carrying out investment in the long term and who are called Bmsttmra “Buy and wait” (buy-and-hold investors), they rely mainly on fundamental analysis in making their decisions. And they support their opinion the theory of market efficiency, which states that an asset’s market price reflects most of the available information on the origin and therefore impossible to predict the direction of prices in the short term. Warren Buffett, the third is the richest man in the world and the most successful investor ever, one of the most supportive of the idea that the possibility of market timing is impossible. It is always advisable to look for companies that priced its shares to be undervalued and do purchase it because the price will rise over time.
Critics and supports the concept of market timing on the study of financial figures of the company Kalaaradat, market share, and net profits, financial indicators, because it is impossible to predict the direction of the market in the short term, because the markets in the short term is impossible to know the vagaries of unpredictable. Also, a study conducted by “Dalbar” an economic and financial research companies, and carried through which analyzed the performance of the two samples of the investors in the stock markets in the United States for 20 years, and the result was that investors who rely on market timing their performance was less than investors who buy and wait by 4.66%. Because the first category attempts to search for the best timing for the market were not successful.
So market timing just messes?
The answer is simply not in spite of the above, and the evidence on this is that there are many individual traders and institutions that have achieved great success by relying on Zman market trading in the short term, the best example of the famous “Renaissance Technologies” US hedge fund, which manages a total of 65 billion dollars of capital, and this is a hedge fund based on trading strategies ranging from fractions of a second (the so-called high-frequency trading) to a few days. This is the company of the most successful hedge funds at all / It is the year 2001 to the borders of 2013 was the worst annual return made by the company is 21%.
Nevertheless, market timing is very difficult, because the statistics indicate that most individuals traders who rely on market timing lose their money quickly. It may require a lot of effort and time to become a trader can rely on market timing and trying to figure out the best times to enter and exit. Due to volatile markets dramatically and can not predict future trends. And so that you can skip Market Timing, you must find or invent a strategy will provide you a statistical exploited for profit, meaning that total profits are always higher than the confirmed losses group, but did it feature you should do an experiment of this strategy on historical data to make sure of their ability to achieve positive results.