Sell walls: the action of artificially keeping the price of a cryptocurrency asset low by placing a large sell order. Large financial operators or investors (nicknamed « whales ») may want to artificially keep the price of a cryptocurrency low so that they can keep accumulating quietly, without causing a sharp rise in price. These are called « walls » because on exchanges, the graphics showing offer and demand will show a very high « wall » on the offer size. The mechanism is that the investor will put a very large sell order (usually 100 to 1000 times more cryptocurrency units than regular orders). Because of how exchanges operate, the sell will only take place if there is sufficient demand to fulfil the entire order, so smaller operators who have a real need/urge to sell would have to sell below that wall (i.e. cheaper) to make sure they can get paid. This will cause a condition where the price will stagnate, allowing those whales to put as much smaller buy orders as they need. Sell walls may be removed once the buying whales have reached their objectives.
This is an excellent learning experience and one that is vital to the long-term profitability of anyone in the stock market. To get the real experience, purchase some graph paper and chart the stock price movements each day by hand. Learn to compare this with the overall movements of the equity market or index and a whole new world of investment and money will begin to open up to you!
Since Betterment launched, other robo-first companies have been founded, and established online brokers like Charles Schwab have added robo-like advisory services. According to a report by Charles Schwab, 58% of Americans say they will use some sort of robo-advice by 2025. If you want an algorithm to make investment decisions for you, including tax-loss harvesting and rebalancing, a robo-advisor may be for you. And as the success of index investing has shown, if your goal is long-term wealth building, you might do better with a robo-advisor.
Astute readers will realise that the above guidance is mainly taking different angles to help prepare for and guide decision making by the investor. The ability to confidently make decisions is vital for investment profits and long-term success. This pdf about the decision making models of Charlie Munger (business partner to Warren Buffett at Berkshire Hathaway - both are certified investment immortals) is almost certain to prove helpful.
Instant-access exchanges offer speed and anonymity. You will most often trade your cryptocurrency against another at a fixed rate, but without the hassle of having to set up an account on a full exchange, without having to fund balances (you must use your own wallets – more on wallets below), place buy/sell orders, then withdraw to your wallet. You will have to provide two addresses (in cryptocurrencies, addresses are where your funds reside to make it short): a payment address (for the cryptocurrency you want to purchase, i.e. the address of your target wallet) and a refund address (the address from where you are sending the money from, in case the exchange order cannot be fulfilled. These exchanges are for example Evercoin, Nexchange, ShapeShift or Changelly (Changelly is not anonymous though). Some of those will even allow to purchase cryptocurrency with fiat currency.
Comparing the cash flow statements of companies is going to help you narrow your list down even further. So you’ve found a few sectors that are really going to benefit from these broad themes, that’s step one. Then you find the companies within those sectors that are able to generate cash for investors at a faster pace and that are using cash responsibly.
Fees beyond trade commissions include inactivity fees (common with active trading brokers such as Interactive Brokers, Lightspeed, and TradeStation) and IRA fees for having a retirement account. While most brokers do not charge predatory fees, it’s still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their profits off miscellaneous fees.
The idea of perception is important, especially in investing. As you gain more knowledge about investments – for example, how stocks are bought and sold, how much volatility (price change) is usually present, and the difficulty or ease of liquidating an investment – you are likely to consider stock investments to have less risk than you thought before making your first purchase. As a consequence, your anxiety when investing is less intense, even though your risk tolerance remains unchanged because your perception of the risk has evolved.
Traditional full-service stockbrokers do more than assist with the buying and selling of stocks or bonds. They often offer a wide array of services and products, including financial and retirement planning, investing and tax advice and regular portfolio updates. But they can charge substantial fees and transaction costs that can erode long-term investment gains.
Whatever happens on a stock exchange and no matter how much influence computers, algorithms and high frequency trading may have, human nature will always have an important role to play. Typically, human nature becomes more important when momentum is changing and there is excitement or panic in the air. It would seem wise to try and understand this mass psychology or group thinking which is often referred to by investors as the madness of crowds.
For example, there may be three buyers who have placed orders for buying Microsoft shares at $100, $105 and $110, and there may be four sellers who are willing to sell Microsoft shares at $110, $112, $115 and $120. The exchange (through their computer operated automated trading systems) needs to ensure that the best buy and best sell are matched, which in this case is at $110 for the given quantity of trade.
The stock exchange shoulders the responsibility of ensuring price transparency, liquidity, price discovery and fair dealings in such trading activities. As almost all major stock markets across the globe now operate electronically, the exchange maintains trading systems that efficiently manage the buy and sell orders from various market participants. They perform the price matching function to facilitate trade execution at a price fair to both buyers and sellers.
Since the underlying businesses operate in differing markets, sectors and countries, their quoted prices move independently as supply and demand in them rises and falls and new information is released to the public about the current business situation. It is the changing of prices that offer investors the opportunity to make a capital gain (or loss) via ownership.
Secondly, this is a very vast topic and many people now trade and deal with cryptocurrency as their main day job. Startups and empires are built on it, so please understand this is a beginner’s guide and not the ultimate guide to the galaxy of cryptocurrencies. I will specifically limit myself to cryptocurrencies and will not cover ICOs (Initial Coin Offerings) as these are to me more investments into products or companies yet to be developed. This article will also not cover the relevancy or not of cryptocurrencies, it will not cover the famous Tulip Bubble, or any kind of philosophical concepts.
Diversification allows you to recover from the loss of your total investment (20% of your portfolio) by gains of 10% in the two best companies (25% x 40%) and 4% in the remaining two companies (10% x 40%). Even though your overall portfolio value dropped by 6% (20% loss minus 14% gain), it is considerably better than having been invested solely in company E.
Benjamin Graham, who is known as the father of value investing, has preached that the real money in investing will have to be made—as most of it has been in the past—not out of buying and selling, but out of owning and holding securities, receiving interest and dividends, and benefiting from their long-term increase in value. This practice has created millionaires.
Why I’m buying: Spell out what you find attractive about the company and the opportunity you see for the future. What are your expectations? What metrics matter most and what milestones will you use to judge the company’s progress? Catalog the potential pitfalls and mark which ones would be game-changers and which would be signs of a temporary setback.