Archive for April, 2015

The Importance of Market Sentiment: Bear and Bull Markets

April 27, 2015

Pablo Soria de Lachica leads the development of innovative online trading tools as director of business development for Bforex, a currency trading firm with more than a dozen offices spanning the globe, including branches in Uruguay, Brazil, and Mexico. The recipient of several company awards including Best Worker, Best Moderator, and Best Director in the Bforex Latin America division, Pablo Soria de Lachica facilitates the delivery of convenient trade platforms that aid both trade execution and market analysis for both experienced and novice traders.

An understanding of investor sentiment can aid foreign exchange trading activities, allowing traders to detect, or even predict, global investment trends. Traders across various investment sectors often characterize markets as having either a “bull” or “bear” sentiment. Marked by optimism and confidence, a bull sentiment characterizes a market that is experiencing significant momentum and investor optimism. Oftentimes, a bull sentiment occurs due to existing positive trends in a given market. When investors expect the value of currencies or assets to increase or continue to increase, they often react by rushing into a particular investment, generating upward momentum.

In contrast, traders refer to a market as having a bear sentiment during periods of investor pessimism, which is often self-sustaining. As investors predict losses caused by a prevailing bear sentiment, they further bolster negative investor sentiment. Unlike a correction, which is a downward market trend lasting two months or less, a bear market is a long-term trend that poses significantly more risks.

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Adjusting Expectations and Assumptions for Investments

April 2, 2015

As Director of Business Development at BForex, Pablo Soria de Lachica navigates the currency trading firm through the development of investment tools for investors of varying skill levels. His duties span market analysis, direction of day-to-day operations, and working with investors to outfit them with the investment tools they need to succeed. Pablo Soria de Lachica and BForex are based in Tel Aviv.

Although only six months remain in 2013, this is more than enough time for investors to recalibrate their investment strategies and capitalize on current trends. One habit that trips up many investors is the breakeven gambit, or the notion of trying to break even when an investment starts to slip. It’s an understandable impulse, but following it creates a mental price barrier that is based on the investor’s notion instead of the reality of the market. Rather than waiting for an investment to hit a breakeven value, crunch facts and figures. If external variables indicate future growth, investors should weather the storm. If, however, the market indicates little to no possibility for the stock to rally back anytime soon, sell while the selling price is still high.

At the end of the year, investors would do well to remember that they can use losses to balance out gains. For example, investors may claim as much as $3,000 in investment losses against ordinary income. After that, they should weed out their portfolios and fill those openings with new, carefully researched investments.