How are you all steemians? I hope you all steemians will be safe and sound by the grace of Allah Almighty and I'm fine too Alhamdulillah. Today I am here to share my participation in the contest organized by @malikusman1.
Contest | The Tech Quiz Season 39
The narrative trading is a type of an investment method and it is based on the narratives which surrounds the particular situations of the market and economy.The market dynamics are driven by the broader narratives and perceptions that the traders and the investors develop around the certain types of trends.This trading is about understanding that the narratives influence the behaviours of the market and understanding which informed about the decisions of the trading.
The trades who use this type of narrative trading they analyse the new different articles, social media and a form of the communication to measure the prevailing regardless a specific asset. They have a belief that the narrative can cause movements of the prices before any specific changes in the asset.
One of the fundamental aspects of the narrative trading is the market psychological concept. The traders acknowledge that the trends of the market are not rational and the fear and greed can affect the price. The role of media and information is very important in the narrative trading. In the digital era, the information about anything spread rapidly through channels, websites of the news and social media platforms.
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Predictions about the narratives can grow in the next year which includes the analysis of the current trends, and economic indicators.The change in the climate is the is a global issue the narrative around the green investment is expected to grow. The investors seek favourable conditions to align their portfolio, the social and governance criteria are also important. Those companies which depend on the renewable sources of energy, Sustainability of agriculture and also those technologies which reduce the carbon are more likely to attract.
The pandemic has lightened the awareness about the health and wellness which can lead to a narrative growth around the personal physical and mental health and preventive care. This raises the awareness about the telehealth services, technology of health fitness. The increasing age of the cryptocurrencies and technology of blockchain has leading the birth of the DeFi narratives which emphasizes on the decentralization network.
- Confirmation Bias
- Overreaction to news
- Market Sentiment Shift
- Neglecting Fundamentals
- Herd Mentality
- Emotional Decision making
- Short term focus
- Increase risk of manipulation