Identifying market trends involves analyzing price movements, volume, and external data to determine if a market is bullish (rising), bearish (falling), or sideways. Key methods include spotting higher highs/lows for uptrends and lower highs/lows for downtrends, using technical indicators like moving averages, researching consumer behavior, and monitoring social or economic shifts.
The 3-5-7 rule in trading is a risk management framework that sets specific percentage limits: risk no more than 3% of capital on a single trade, keep total risk across all open positions under 5%, and aim for winning trades to be at least 7% (or a 7:1 ratio) greater than your losses, ensuring capital preservation and promoting disciplined, consistent trading. It's a simple guideline to protect against catastrophic losses and improve long-term profitability by balancing risk with reward.
Traders use technical analysis to evaluate and predict market performance by studying trading activity, such as price movement and volume. Unlike fundamental analysis, which focuses on a company's financial health and economic factors, technical analysis looks at historical data and chart patterns.
AI is transforming how businesses analyze market trends, reducing manual effort and delivering faster, data-driven insights. By processing massive datasets, AI uncovers patterns, predicts future developments, and helps businesses make smarter decisions.
Identifying a trend through price action involves analysing the movement of an asset's prices on a chart without relying on technical indicators. One of the ways of doing this is by using trendlines. A trendline is an illustrated line that provides a visual representation of the trend's direction and strength.
How To Identify Trends in Markets (Never Guess Again)
What is the 90% rule in trading?
The "90 Rule" in trading, often called the 90-90-90 Rule, is a harsh market observation stating that roughly 90% of new traders lose 90% of their money within their first 90 days, highlighting the high failure rate due to lack of strategy, poor risk management, and emotional trading rather than market complexity. It serves as a cautionary tale, emphasizing that success requires discipline, a solid trading plan, proper education, and managing psychological pitfalls like overconfidence or revenge trading, not just market knowledge.
It also identifies the five ways to spot a trend as: 1) anticipate change, 2) see it coming, 3) distinguish between short-lived fads and long-term trends, 4) make sure solutions are realistic, and 5) create a competitive advantage.
The 30% Rule in AI is a framework emphasizing that AI should handle approximately 70% of repetitive, routine work while humans focus on the remaining 30% of high-value activities requiring creativity, judgment, and ethical decision-making.
We study whether ChatGPT and DeepSeek can extract information from the Wall Street Journal to predict the stock market and the macroeconomy. We find that ChatGPT has predictive power.
Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and there's often a lot of trading between 9:30 a.m. and 10 a.m. Traders who follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.
Stock prices are influenced by fundamental, technical, and market sentiment factors. Fundamental factors involve a company's earnings, valuation multiples, and perceived risk. Technical factors include economic trends, inflation, and trading volume.
The "Buffett Rule 70/30" isn't one single rule but refers to different concepts: it can mean investing 70% in stocks and 30% in "workouts" (special situations like mergers) as he did in 1957, or it's a popular guideline for personal finance to save 70% and spend 30% for rapid wealth building. It's also confused with the general guideline of 100 minus your age for stock/bond allocation (e.g., 70% stocks if 30 years old).
What if I invested $1000 in Coca-Cola 30 years ago?
A $1,000 investment in Coca-Cola 30 years ago would have grown to around $9,030 today. KO data by YCharts. This is primarily not because of the stock, which would be worth around $4,270. The remaining $4,760 comes from cumulative dividend payments over the last 30 years.
If you would have invested ₹1,000 per month for 5 years at a conservative 10% p.a. return, you could have accumulated around ₹77,437 today. If you would have consistently invested ₹1,000 per month for 10 years, you could have accumulated a corpus of around ₹2,04,845 today (assumed returns of 10% p.a.).
The "Rule of 90" in stocks typically refers to two different concepts: the harsh 90-90-90 rule for new traders (90% lose 90% of capital in 90 days) due to lack of strategy, risk management, and emotional control, and Warren Buffett's 90/10 investment rule (90% low-cost S&P 500 index fund, 10% short-term bonds) for long-term investors seeking simplicity and diversification. The first warns against trading pitfalls, while the second promotes a passive, long-term approach to build wealth.
Your $500,000 can give you about $20,000 each year using the 4% rule, and it could last over 30 years. The Bureau of Labor Statistics shows retirees spend around $54,000 yearly. Smart investments can make your savings last longer.
The USA is currently the No. 1 country in AI, thanks to foundation model breakthroughs, semiconductor dominance, enterprise AI maturity, and global research leadership.
The mystery of why so many chatbots converged on the number 27 has a down-to-earth explanation: they all learned to mimic human “randomness,” and humans aren't actually random at all. The number 27, carrying the charm of seven and a mid-range feel, became a statistically likely answer in their neural networks.
Trend charts are also known as run charts, and are used to show trends in data over time. All processes vary, so single point measurements can be misleading.
The document summarizes the key elements and characteristics of trends. It discusses five main elements of a trend: 1) number of participants, 2) pattern of behavior, 3) long period of time, 4) cause, and 5) consequence.
