Technical Analysis
01. Behavioral Finance
Behavioral finance is the study of how psychological factors and cognitive biases affect financial decisions and market outcomes. It challenges the idea that investors are always rational. Key biases include loss aversion, overconfidence, and herd behavior. Understanding these helps investors make better choices, manage risks, and explain market anomalies.
02. Algorithmic Trading
Algorithmic Trading is the use of computer algorithms to execute trades based on preset rules like price, volume, or timing. It enables fast, accurate, and emotion-free trading. Common strategies include trend-following, arbitrage, and high-frequency trading. While it offers speed and efficiency, it also carries tech risks and may lack flexibility.
03. Advanced Technical Analysis
Advanced Technical Analysis uses tools like Elliott Wave Theory, Fibonacci Retracements, and indicators like MACD or Bollinger Bands to predict price movements. It involves analyzing multiple time frames, chart patterns, and price action. While powerful, it requires skill and caution, as overfitting or ignoring market context can lead to poor decisions.