Daily Archives: February 18, 2014

Market positions and investment behaviour

Current investors face a situation in which they have an enormous variety of assets. Information provides the data and figures to choose the opportunities that fit their profile. Basically, investors have two market positions linked to the assets: they bought some or they have nothing.

This basic difference is important to understand further developments in the investors’ decisions. If an investor is in a LONG position, it means that he or she owns that assets. If he is in an OUT position, he has no shares or participations, depending the kind of the asset.

Both situations are not static. Investors always follow the market and their asset performance. The worries about their investments are not the same: if they have a LONG position, they pay attention if the asset has a positive trend or not related the entry price. On the opposite, if they have an OUT position, the interest is focused in when the asset has an interesting price to buy.

In this jargon, they are called trading signals and we have the following options:

  • If the investor has a LONG position (he or she has the asset), the possibilities are HOLD LONG (keep the asset, because the trend is positive) or SELL (below a specific price).
  • If the investor has an OUT position (he or she has nothing of the asset), the possibilities are WAIT (do not buy, because the price trend is negative) or BUY ABOVE (the trend is positive and the investor gets the price in which it is interesting to enter).

Trading signals are given by investment systems, as T-Advisor does. In the case of T-Advisor, the own system stays long or out, after its own asset analysis, and provides the pertinent trading signals. These are the screens linked to them:

LONG

Market positions: long-hold in T-Advisor

Market positions: long-sell in T-Advisor

OUT

Market positions: out-buy in T-Advisor

Market positions: out-wait in T-Advisor

Investment behaviour depends on the initial position. Investors should have available a reliable tool to follow the trading signals linked to an alert system that provides the chance to react immediately in the market.