The next generation of mindset training breaches into new realities, and will achieve unprecedented outcomes to help people achieve unprecedented results. From our trading APP to our turn key marketing system, to our blockchain initiatives, NFTs Reward Program, DRIVEN is always positioned at the cutting edge of technology. The power of culture and collective behavior translated into community and individual influence, digital value and global impact.

We position people for the future by providing education, tools and technology that help build. for anyone to thrive in the new digital age and participate in the decentralization movement. USE IT. TRADE IT. SELL IT. OR HODL. The analyst needs to assess every factor that can drive the price of the asset up or down.

Fundamental analysis can be as broad as the macroeconomic environment to the way the management behaves during an earnings call with investors. Investors who employ the fundamental analysis, such as Warren Buffett, seek to find stocks with market valuations below their book valuations. Is the company currently worth less than what people will be willing to pay in 5 to 10 years? In other words, if the company is underperforming by the current financial statements and has the potential to grow and appreciate over time, then it could be a worthy choice.

Fundamental analysis can go in the other direction, too. Short-sellers, traders, and investors who sell an asset and profit from its depreciation seek to find companies that are priced higher than their fair market value. It would mean that the market has priced a certain asset above its real value for whatever reason, and, according to fundamentals, the asset should drop in order to be valued at a fair market price.

You can divide fundamental analysis strategies into two broad categories. The first, qualitative analysis, will estimate the quality of a company or organization. It considers the business model, competitive advantages, management, or corporate governance. Quantitative analysis, on the other hand, estimates the performance of a company or organization by the numbers. It takes into consideration financial data such as the balance sheet, cash flow statement, and the profit and loss statement.

There are also two different processes of fundamental analysis: top-down and bottom-up. The top-down approach investigates macroeconomic factors and indicators first and then digs into specific company details. The bottom-up approach is the reverse. The analyst evaluates the company first and then expands the analysis by including macroeconomic factors concerning the company.

The global macro strategy aims to cover the development of the markets from the broadest perspective. This trading strategy is based on the inclusion of macroeconomic events from all over the world down to a regional scale.

Macro traders work with sophisticated data coming in from various sources to analyze and forecast global trends for the long-term. A global macro strategy is perhaps the most comprehensive and inclusive strategy in the market. Macro traders rely a great deal on diversifying their portfolio so that it will have exposure to a large number of markets to provide stability and growth while minimizing risk.

Some macro traders, however, will look anywhere to find a few stocks or currencies that will deliver the return they need. It revolves around the idea of trying to figure out what the market will look like in a certain period, usually years ahead. It is a long-term approach to the market, and before taking a position, traders need to look at least a few months in the future to predict and project how the trend will form.

There are different types of strategies in the event driven space. The two types of event driven investing are:. The merger arbitrage strategy can be implemented when one company takes over another company.

When this merger acquisition occurs, the target company will normally trade at a discount price. However, there are factors such as regulatory reasons that can break the deal. So, a profit can be made only if the deal closes. A good example of a good distressed debt trade was during the subprime mortgage crisis of when Lehman Brothers went bankrupt.

Many distressed debt managers correctly identified that some good securities in this bankruptcy had quite a lot of value and purchased these securities at a deep discount. For example, the event driven trading strategies are expected to do well in rising markets and offer some kind of protection in falling markets. A catalyst is an event that can help unlock the value of a company.

Event-related catalysts have very specific dates and potential outcomes, which gives you the ability to quantify them. As an investor, if you find a stock trading at a discount price ahead or after of an event and you think the market mispriced the impact on the stock price you can buy the stock.

Because, this is when the corporate activity is busiest, which in turn will provide investors with lots of event driven news and event-driven investing ideas. When the economy is doing well, the correlation between specific events and asset prices will be stronger.

When introducing the concept of market response we look for ways to interpret events in a dynamic framework. More specifically, we consider how the market view on a particular event may change over time depending on the market sentiment.

As part of your research if you want to capture such changes in the stock price you should study the most recently observed market responses to any given event types. The first step is to select the most stocks that typically bound in news announcements and are liquid.

We only count for the relevant news that has the potential to trigger some volatility. Example: use the free stock screener offered by Finviz to scan for liquid stocks. we scanned stock with average volume over 1M. Broadly speaking, any event that has the potential to change the stock price is a tradable event. But, not all events have the same power over the price action. Some are micro-events and others are macro events that are long-lasting forces that can generate trend momentum.

The micro events are specific to an instrument like an earnings report. These micro-events will be important for the outlook and projection of the stock price in the future. In the last step, we take the average stock return over the past x number of events.

We only want to take into consideration the most recent news events. These are more relevant for an accurate read of the stock price. The market can produce a more predictive response with certain events than the other.

If you have hit your stride and feel ready to learn more about different strategies that can help you identify new opportunities, then you have come to the right place. We will go through event-driven trading, fundamental analysis, and global macro strategies for trading sharpshooters that are ready to take their business to the next level.

The event-driven trading strategy is a trading style that focuses solely on market news and events. Anything news-related that can contribute to the development of a market, this strategy wants to exploit it. The event-driven strategy aims to seize any move of the market by acting upon the release of market-moving data.

The market inefficiencies are most visible by indicators such as news, events, and data. They will define where the market currently stands in terms of value and is this current stand adequate in relation to market expectations. For example, the announcement that the unemployment rate has risen from 7. It is not up to the expectations for growth, so it acts as a signal that the treasury yields will most likely depreciate. Therefore, a trader may use this data as a sell signal in the treasury yield.

In other words, traders who employ an event-driven trading strategy will rely on economic news to make their decisions. A trader can apply an event-driven trading strategy on any liquid market such as currencies, equities, fixed income, and derivatives. Every asset class has its focus points that are closely monitored by event-driven traders. These may include mergers and acquisitions in corporate and business, earnings reports, restructuring, share buybacks, special events such as product reveals, and any other action that may impact the stock price.

On a larger scale, economic indicators that may impact the broad markets include unemployment rates, interest rate changes, quantitative easing, etc. They are a crucial measurement of the health of the overall global economy, or any local economy, and thus closely observed by traders and investors who employ the event-driven strategy. Other examples of macroeconomic indicators are elections, regulations, government changes, referendum results such as the Brexit decision, etc.

The event-driven trading strategy requires a heavy dose of focus and concentration due to the large volumes of data and news to digest. While this strategy certainly presents trading opportunities that can lead to financial success, the challenges lay in closely following developments and interpreting data correctly, followed by prompt action at the right time.

Fundamental analysis represents the analysis of economic and financial data and its impact on a given asset. Fundamental analysis aims to measure how essential economic data, for example, non-farm payrolls , will affect a specific market.

Fundamental analysis can be applied to any market, from the broad global market to a single stock. In terms of impact, it varies respectively to the news or data related to the chosen asset. Fundamental analysts assess everything that can affect the value of the pair. From the gradually changing global economic state and outlook to an impromptu speech by the Chairman of the Federal Reserve in which they might disclose new and unexpected information.

The analyst needs to assess every factor that can drive the price of the asset up or down. Fundamental analysis can be as broad as the macroeconomic environment to the way the management behaves during an earnings call with investors. Investors who employ the fundamental analysis, such as Warren Buffett, seek to find stocks with market valuations below their book valuations. Is the company currently worth less than what people will be willing to pay in 5 to 10 years? In other words, if the company is underperforming by the current financial statements and has the potential to grow and appreciate over time, then it could be a worthy choice.

Fundamental analysis can go in the other direction, too. Short-sellers, traders, and investors who sell an asset and profit from its depreciation seek to find companies that are priced higher than their fair market value. It would mean that the market has priced a certain asset above its real value for whatever reason, and, according to fundamentals, the asset should drop in order to be valued at a fair market price.

You can divide fundamental analysis strategies into two broad categories. The first, qualitative analysis, will estimate the quality of a company or organization. It considers the business model, competitive advantages, management, or corporate governance. Quantitative analysis, on the other hand, estimates the performance of a company or organization by the numbers.

It takes into consideration financial data such as the balance sheet, cash flow statement, and the profit and loss statement. There are also two different processes of fundamental analysis: top-down and bottom-up. The top-down approach investigates macroeconomic factors and indicators first and then digs into specific company details.

The bottom-up approach is the reverse. The analyst evaluates the company first and then expands the analysis by including macroeconomic factors concerning the company. The global macro strategy aims to cover the development of the markets from the broadest perspective.

This trading strategy is based on the inclusion of macroeconomic events from all over the world down to a regional scale. Macro traders work with sophisticated data coming in from various sources to analyze and forecast global trends for the long-term. A global macro strategy is perhaps the most comprehensive and inclusive strategy in the market. Macro traders rely a great deal on diversifying their portfolio so that it will have exposure to a large number of markets to provide stability and growth while minimizing risk.

Some macro traders, however, will look anywhere to find a few stocks or currencies that will deliver the return they need. It revolves around the idea of trying to figure out what the market will look like in a certain period, usually years ahead. It is a long-term approach to the market, and before taking a position, traders need to look at least a few months in the future to predict and project how the trend will form.

This trading style requires almost constant connection and involvement with the markets as they are constantly moving, and there are always developments to follow. Traders and investors who want to trade global macro need to focus on the four main asset classes: equities, currencies, fixed income, and commodities.

Because these assets have their own nature, behavior, and style of trading, the global macro trader needs to be equipped with a diverse set of skills if they are to read the market correctly and make proper investment decisions.

To do that, macro traders need to design a multi-asset class strategy that consists of portfolio construction, risk assessment, a well-defined business model, and a disciplined investment process. Global macro trading takes into consideration both technical and fundamental analysis. The combination of both factors allows for a better understanding of the current state and projected growth of any market or asset.

For example, macro traders pay close attention to interest rates, politics, currency rates, monetary policies, and economic development, and they try to figure out how all these factors will play out in the future. More precisely, macro traders believe that the present is already baked into the price, and they try to think ahead and visualize, say months from now, where the world is going to be and the level of what assets or markets may trade.

Being a macro trader is a demanding and responsible task that requires the trader to develop a global perspective while remaining independent in their thinking. The path to success is exciting, yet it poses its share of challenges to the trader, so understanding risk management is key.

Your profitability depends largely on your market knowledge, level of discipline, and the strategies that you employ. Developing a strategy that works takes time and patience and requires you to evaluate your losses and adapt accordingly. Whether you choose to use fundamental analysis regularly, test global macro strategies, or try out event-driven trading strategies, the choice is yours. OspreyFX prides itself on providing the educational tools and resources required to empower our traders.

Why wait? Sign up now! Stay One Hit Ahead of the Flock With These Trading Strategies. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Event-Driven Trading Strategy The event-driven trading strategy is a trading style that focuses solely on market news and events.

What Should you Trade with an Event-Driven Strategy? The Fundamental Analysis Trading Strategy Fundamental analysis represents the analysis of economic and financial data and its impact on a given asset.

Fundamental Analysis: Qualitative and Quantitative Analysis You can divide fundamental analysis strategies into two broad categories. Global Macro Trading Strategy The global macro strategy aims to cover the development of the markets from the broadest perspective. Trading Macro is to Trade Actively It revolves around the idea of trying to figure out what the market will look like in a certain period, usually years ahead. Final Takeaway The path to success is exciting, yet it poses its share of challenges to the trader, so understanding risk management is key.

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If this is your first time on our website, our team at Trading Strategy Guides welcomes you. Find Representative. Alpha says:. The bottom-up approach is the reverse. The micro events are specific to an instrument like an earnings report. Popular Courses.

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