Assalam O Alaikum |
|---|
Hello dear friends! Welcome to my post. How are you all? I hope you will be doing well by the grace of Almighty Allah. I'm also fine and enjoying my day. Today I'm here to participate in this amazing contest which is organized by @malikusman1 in this Steem4bloggers community. The topic of this contest is about "The Tech Quiz - Season 39". So let's start with the task without any more delay of time.
What is narratives trading? |
|---|
Imagine, you listen a news about the rise of prices of cryptocurrencies within the market and then you start thinking about making an investment in the crypto market bases on the news which you have heard. That activity done by you will be considered as narrative trading because, the narrative trading is known for as the practice of making decisions of investments in digital currencies on the basis of specific trends, news and stories in the crypto space.
For example, the ex president of America Donald Trump has announced that he will support cryptocurrencies and will allow the people to make transactions just like they do with fiat currencies. So that announcement will help the traders and investors to make informed decisions regarding the investment in cryptocurrencies. Also, it will bring new trends within the market and promote narrative trading.
Which narrative can grow in the next year? |
|---|
As we know, the crypto space is developing and improving with the passage of time which is bringing several new things within the market. So in this regard, we can say that many types of narratives have a potential to grow in the upcoming years. Also, if the Trump become the president of America, than it will influence the whole crypto market. Seeing the future of digital currencies, many people are predicting the price of Bitcoin and other digital currencies.
Furthermore, the man is making a sharp progress in every field of his life especially in the digital technology and the artificial intelligence, is one of the most popular achievement of humans in the past few years. This is because, the machine learning and artificial intelligence, is influencing the every sectors of our lives. So seeing that level of advancements from AI, the people are expecting that the Air artificial intelligence narratives will grow the next coming years.
What risks come with focusing too much on narratives in trading? |
|---|
The too much focus on narratives in trading can be dangerous as it will affect the decisions making processes of people which results in poor management of digital assets. And when we remain unable to manage our digital assets, we may lose them within a shorter interval of time. Anyway, let's have a look at some of the risks associated with the narratives in trading:
- The narrative depends on the market sentiments and when a narrative lose his popularity, the assets associated with it may lose their value which results in decrease of prices.
Focusing on narratives may lead towards the ignorance of important financial fundamentals including the cash flow, earnings and depts. Thus it will create problems.
The narratives make the portfolio of an investor concentrated because they force the investors to focus on specific digital currencies instead of those which can provides them huge profit.
So friends, that was my entry about that topic and I hope you will enjoy reading it. Now it is a time to say goodbye to everyone and I want to invite my friends @jannat12, @sarahisham and @entity01 to take a part in this amazing contest.
