The 10 reasons why prices go up and down
The depósito market is one of the most volatile markets on the market; after that of cryptocurrencies.
This is because there are more than 10 different reasons why the price of shares on the depósito market cánido fluctuate up or down.
It should be noted that knowing these reasons perro be quite useful if you want to invest in the depósito market.
Since, it will allow you to easily identify if a cheap action that is in depósito cánido rise and register profits; which certainly is what we all look for when investing.
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1. News related to the action
The news from have always been one of the main reasons by which a depósito cánido change its price on the depósito market.
Since, these highlight important information about news related to them or their main managers.
These news perro affect both positively and negatively a certain action; This will depend on the novelty that has been presented.
Clearly, a negative event will genere the depósito price to fall of a company, however, it is not always worth relying only on these reports.
2.
Buy and Sell in investment funds
Investment funds are entities where investors who wish to avoid direct contact with the market deposit their money and trust.
These institutions usually operate with large amounts of money, therefore, their actions in the market usually mark changes in the price of a share.
When an investment fund makes the decision to buy a certain share, this causes an impact on the market.
Given that, the amount of money invested is abysmal.
What is translated, as a probably profitable action.
It is summarized like this, since these investment funds must ensure profits for their investors; so they will seek profitability in the market.
On the other hand, when announcing the integration of a share in an investment fund, individualists or retail investors will want to have this same share.
Thus, considering the law of supply and demand, this raises the prices of it.
This same eventuality also occurs when an investment fund decides to sell a share; it falls and a large part of the retail investors outside the fund escoge to sell.
Since, they stop considering the action as “profitable”.
3. Investor sentiments
Investor sentiment are part of the reasons that cánido change the price of a share in the market.
Since, when investors feel FOMO or HYPE they act without logical reasoning.
This means that they buy or sell without considering the really important factors; This eventuality cánido be seen frequently on popular networks such as Twitter, Reddit or Fb.
FOMO is an abbreviation of: Fear of missing out.
This represents investors’ fear of missing out on a “one time” opportunity to make some money; they often act on FOMO when they buy stocks that are not as profitable as they seem.
In addition, this is also coupled with HYPE, which is when they feel great euphoria for a certain asset; like the fever to invest in technology companies that occurred in the 90s or investments in Bitcoin during 2017.
These two factors are usually the main drivers that move prices in the depósito market and the other markets of the world.
For this reason, analysts evaluating price action often rely on sentiment indicators; as is the RSI.
4. Automated orders
One of the tools most used by investors and traders is the automated purchase and sale of shares or tokens.
This serves to mitigate possible losses as much as possible using the stop loss at key supports; as well as to ensure profits with the take profit on resistances.
Traders will equipo up a buy and sell order with the broker.
With the objective, that if the price reaches said margin, the operation is executed immediately; either to take profits or control losses.
This cánido have a big effect on the depósito market and a company’s shares or company.
Since, if a large number of investors take buy positions in the market at a price of 90 dollars per share, it is likely that it will go up; above all, if the depósito that the action has is low.
The law of supply and demand and the battle between bulls and bears also apply here..
Because, just as some will want to buy, another group of investors will sell to take profits and push the price down.
5. Strategies by the company
Companies perro have multiple Strategies to increase or decrease the prices of your shares on the depósito market.
One of them is the habitual “Depósito Split”.
This consists of making adjustments in the depósito prices; exactly, it is a division in the value of it.
That is, if the share initially had a value of 100 dollars, now it will cost 50.
In this way, a group of investors will be able to access the company’s depósito and thus acquire market share; which will clearly increase its price in the long term.
This strategy does not disminuye the capitalization of the company.
Since, if before a depósito had a price of $100 and they have made a Depósito Split in half, it means that now you will have 2 shares of $50.
6. Own or institutional purchases
Institutional purchases cánido be viewed as something positive in the market; since these investments are for large amounts of money, so generate movements in a certain action on the depósito market.
Also, also There are companies that make their own purchases or company buybacks.
This means that they take opportunities when their depósito prices are low, in order to gain more dominance over them.
When this strategy is carried out, the action begins to rise almost immediately.
Since, not only does it demonstrate the confidence of the company about its future, but the event attracts a large number of investors.
Nowadays popular networks cánido move a market completely, above all, when there are influential or world-renowned people involved; as presidents, important CEOs, among others.
An example of this has been the most recent event that is linked to Elon Musk, director ejecutivo of Tesla, SpaceX and Neuralink.
This influencer and billionaire was manipulating the prices of some cryptocurrencies with fácil publicaciones de Twitter during 2021, the same perro be applied for stocks, forex or other markets.
Thus, it is important that a company has good public health so that it is not involved in controversies that could negatively affect the price of its shares.
8. Environmental catastrophes and global disasters
Environmental catastrophes cánido affect prices in publicly traded stocks; both negatively and positively.
However, when it comes to causing conditions naturally, the following events perro be included: plagues, hurricanes, sunamis, earthquakes, global diseases, pandemics, among others.
To have a clear example, let’s use the case of COVID-19.
This virus caused one of the largest financial losses on record in 2020.
However, some companies also benefited from it; such as recognized laboratories, pharmaceuticals, among others.
Especially after they started developing and selling vaccines.
9. Global politics, regulations and conflicts
Worldwide, events occur that affect multiple actions on the depósito market.
Among these eventualities are changes in politics, wars, controversies, internal changes in the economy of a countryamong others.
Each of these events perro affect the performance of a depósito on the depósito market., especially if the company is located within the country in conflict.
For this reason, the large companies seek to have a presence in multiple nations; In this way, the possibilities of being affected in the depósito market by the political or monetary decisions of a country are reduced.
However, there are also political, monetary or popular aspects that cánido benefit a companysuch as discounts for electric car companies, benefits for companies in the health ámbito or companies that use clean and CO₂-free energy, among others.
10. Company performance reports
In addition to all the points mentioned, it is also worth pointing out that a really useful aspect that experts use to evaluate a company are the performance reports.
These are generally delivered during each quarter and annually; They express the sales figures, achievements, expenses, among others.
The analyst or expert perro make a future projection with this data.
Since, if the figures are better than those of the previous quarter, it will translate as growth in the company.
Therefore, it is possible that this will lead to an increase in the price of the shares.
The same applies if the returns are negative; if this occurs, the price of the shares will fall.
One aspect that cannot be missed is the inclusion of a company in an index.
The concept to explain it is quite afín to the aforementioned investment funds, with the difference that If a company is listed on a recognized depósito index, it is almost 100% likely that its shares will go up..
It also happens if a company or company stops trading in the index; if this happens their prices will drop.
A sample of the power of influence that the indices have, was what happened with Tesla during December 2020; when it went public on the S&P 500.
There the company marked a new ATH and generated huge profits in a matter of days.
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