Choosing the right analysis methods

We have 4 predominant approaches to market analysis: 1. Common sense: Choosing the right blend of assets in the first place, buy with discount, not getting greedy, see where the market is going. 2. Psychological: Seasonality, Elliot waves, support/resistance, dead cat bounce, retail investor behavior, algorithmic slippage. 3. Fundamental: Accounting ratios, long term indicators and …

Rebalancing

To reduce the psychological pressure, we do not want to modify the amount of money committed to investment beyond the monthly saving/using rate. Instead we use rebalancing tactics. The idea is pretty simple. If we have a portfolio of assets, we could improve the alpha of the portfolio (risk-adjusted reward) by combining uncorrelated bets. If …