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Winning or losing a trade depends on your state of mind (2)Hello? Traders, welcome. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a good day. ------------------------------------- (USDT chart) Looking at the 1D chart, you can see that after a short but long uptrend, it recorded a pullback, creating the first gap. In the meantime, the HA-High indicator on the 1D chart rose and was created. Accordingly, it is necessary to ensure that funds are maintained at 81.839B or higher. Falling while creating a gap means that funds were outflowed through USDT, so we need to check the future situation. ---------------------------------------- (USDC chart) USDC is currently in a downtrend. Therefore, it is necessary to check whether the trend turns upside down. If not, and if it continues to show a downward trend, the coin market will not be able to maintain its upward trend and will likely fall sharply. Currently, it is judged that the funds that have flowed into the coin market through USDT are defending the price, but if USDT shows a decline, it is necessary to be careful because the withdrawal of funds from the coin market can occur quickly. The first thing to check is to see if USDC holds above the HA-Low indicator on the 1D chart. ------------------------------------------------ (BTC.D chart) BTC dominance is good to look at to see if funds are concentrated towards BTC or towards altcoins. This is because any other method of interpretation will rather complicate your thinking. ------------------------------------------------- (USDT.D chart) An increase in USDT dominance can be interpreted as a high possibility of a downward trend in the coin market. Therefore, it is highly likely that BTC, the number one coin market by market cap, will show a downward trend. The reason is that when trading on coin exchanges, the USDT market is as large as the BTC market. Because various coins (tokens) can be directly traded with USDT, changes in USDT dominance can be interpreted as reflecting the overall trend of the coin market. Therefore, support and resistance points formed on the USDT dominance chart cannot be used to directly trade coins (tokens). However, since you can know the flow of money in the coin market, you will eventually be able to see the chart of the coin (token) you want to trade and use it as a reference for creating a trading strategy. This is because you can figure out whether the flow of funds is moving toward buying or selling, so you can find the timing of your trade accordingly. -------------------------------------------------- Following the DXY chart description, the same explanation is given to the USDT Dominance chart. If you think these two explanations are different, we recommend that you read them several times in more detail. The fact that your psychological state is starting to fluctuate due to price fluctuations means that the flow of funds is changing. That's why, without knowing it, your own psychology starts to fluctuate. In order to stabilize this psychological state, it can be stabilized through appropriate transactions. Therefore, if you hold a coin (token), you can get some psychological stability by checking the movement at the support and resistance point and confirming the profit or loss by selling a certain amount. If you do not own any coins (tokens), you can take your own psychological stability by purchasing a certain amount. In order to trade, you must make your psychological state stable. If you proceed with a transaction without achieving this, there is a very high possibility that the transaction will eventually fail. -------------------------------------------------- ------------------------------------------- ** All descriptions are for reference only and do not guarantee profit or loss in investment. ** Even if you know other people's know-how, it takes a considerable period of time to make it your own. ** This is a chart created with my know-how. ---------------------------------
CRYPTOCAP:USDT.DEducation
by readCrypto
Market Cap Chart: Money MovementHello? Traders, welcome. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a good day. ------------------------------------- (USDT chart) (USDC chart) Looking at the USDT chart, it can be seen that a lot of money is flowing into the coin market, rising above the previous high of 82.467B. However, if you look at the USDC chart, you can see that there is a constant outflow of funds. I think this movement can be interpreted as individual investors' funds are constantly flowing into the coin market, but institutional investors are leaving their funds out of the coin market. The reason why USDT is interpreted as an individual investor is that it is used as a channel through which individual investors can easily move funds because USDT supports trading pairs on exchanges around the world. In particular, the main power of this USDT is expected to be Chinese funds. USDC is still a stablecoin that has limited support for trading pairs on exchanges around the world. Therefore, I think it is highly likely that the forces that move funds through this USDC are American funds. I think the leadership of the coin market has shifted from Chinese capital to American capital. This move is expected to make the coin market a transparent investment market. However, as the possibility of being affected by movements in the capital market increases, the volatility is expected to gradually decrease. -------------------------------------------------- ------ (BTC.D chart) Looking at the BTC dominance chart, a volume profile is formed in the 47.64-48.80 section and the 56.78-61.73 section. So, if it rises above 48.80, I would expect it to rise around 56.78-61.73. I think that the reason why it starts to be affected by the movements of the world economy is because, as explained in USDT and USDC, American capital is leading the coin market. The variable for this movement is that funds from individual investors are continuously flowing into the coin market. This influx of funds is expected to drive the upward trend of the explosive coin market at some point. This explosive rise will drive the rise in BTC price, which is expected to increase BTC dominance. Therefore, I think we should observe the flow under the premise that BTC dominance will rise around 56.78-61.73. It is actually unknown whether the price of BTC will rise or fall due to the rise in BTC dominance. This is because BTC dominance can tell whether funds are concentrated in BTC or altcoins. This is because the concentration of funds is relative, so if a lot of funds are withdrawn from the altcoin, BTC dominance may rise. Therefore, I do not think it is correct to interpret that BTC price will rise as BTC dominance rises. -------------------------------------------------- -------------- (USDT chart) I think the first chart you should come across to understand the Coin Market Cap chart is the USDT chart. This is because USDT has the highest market cap among stablecoins and has become an important stablecoin that supports trading pairs on exchanges around the world. Therefore, I think that the change in USDT dominance can be used to understand the overall trend of the coin market. When USDT dominance declines, the coin market is likely to show an uptrend. Thus, USDT dominance allows you to know how to proceed with a trade depending on whether it is a rising or falling candle. Since these movements are likely to move against the BTC price chart, they can help interpret BTC price fluctuations. If USDT dominance rises above the 7.86-8.25 range, the coin market is likely to plunge. This is because the current section is an important section. -------------------------------------------------- ------------------------------------------- ** All descriptions are for reference only and do not guarantee profit or loss in investment. ** Even if you know other people's know-how, it takes a considerable period of time to make it your own. ** This is a chart created with my know-how. ---------------------------------
CRYPTOCAP:USDT.DEducation
by readCrypto
2
Market Capitalization and Price Volatility in CryptocurrenciesIntroduction The cryptocurrency market has grown substantially in recent years, not just in terms of its size, but also in terms of its complexity and the variety of investment options available. One of the key aspects that investors consider when evaluating potential investments is the market capitalization of a cryptocurrency, which is calculated by multiplying the total supply of the cryptocurrency by its current price. Another important aspect is price volatility, which refers to the degree of variation in the price of a financial instrument over time. The relationship between these two factors - market capitalization and price volatility - forms the basis of this article. Understanding Market Capitalization and Price Volatility Market capitalization provides an indication of the size and scale of a cryptocurrency, and it is a useful measure for comparing different cryptocurrencies. Larger market-cap cryptocurrencies, like Bitcoin and Ethereum, have established a significant presence in the market and are generally considered more stable. On the other hand, smaller market cap cryptocurrencies, often referred to as 'altcoins', have the potential for high returns but come with a higher risk. Price volatility, on the other hand, is a measure of price fluctuations over a given period. High volatility means that a cryptocurrency's price can change rapidly in a short time, making it possible for investors to experience significant gains or losses. Cryptocurrencies are generally more volatile than traditional fiat currencies, which means that the potential for gains or losses can be high. The Correlation Between Market Capitalization and Price Volatility Existing literature and market analysis suggests that there is a negative correlation between market capitalization and price volatility in cryptocurrencies, meaning that cryptocurrencies with larger market caps tend to have lower volatility and vice versa. This makes intuitive sense, as larger market cap cryptocurrencies have a wider user base and more liquidity, which helps stabilize their prices. For instance, Bitcoin, which has the largest market cap, has relatively lower volatility compared to smaller market cap cryptocurrencies. This lower volatility is due to the fact that Bitcoin, being the most established cryptocurrency, has a wider distribution and a large number of holders, which helps in maintaining its price stability. Conversely, smaller market cap cryptocurrencies are more susceptible to price swings, often driven by speculation and sentiment rather than fundamental value. These cryptocurrencies can exhibit high volatility, leading to potential for large gains, but also high risk. Implications for Investors and the Market Understanding the relationship between market capitalization and price volatility is crucial for investors in the cryptocurrency market. It can help them tailor their investment strategies based on their risk tolerance. For instance, risk-averse investors might opt for larger market cap cryptocurrencies due to their lower volatility, while risk-tolerant investors might be attracted to smaller market cap cryptocurrencies due to their potential for high returns. Furthermore, this relationship has implications for the stability and maturity of the cryptocurrency market as a whole. As the market matures and more capital flows into it, it is likely that overall volatility will decrease, making cryptocurrencies a more viable asset class for traditional investors. Conclusion The relationship between market capitalization and price volatility in cryptocurrencies is a key dynamic that has important implications for investors and the market as a whole. As the market continues to evolve and mature, it will be interesting to observe how this relationship changes and what that means for the future of cryptocurrency investing. Trade with care. If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
CRYPTOCAP:TOTALEducation
by financialflagship
Identify the size or flow of funds in the coin marketHello? Traders, welcome. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a good day. ------------------------------------- In order to find out the size or flow of funds in the coin market, I think you should pay attention to the movement of the four charts below. Check the size of your funds: USDT, USDC Check the flow of funds: BTC.D, USDT.D It is best to view all four charts together if possible because you can find out the size or flow of funds from limited information. If it is difficult to see all four charts, it is recommended to view at least the USDT.D chart, which shows the flow of funds best. ------------------------------------------ (USDT chart) (USDC chart) It is important to check the USDT and USDC charts to find out the flow of funds in the current coin market. USDT is a stablecoin backed by exchanges around the world. Therefore, it is indispensable for most coin (token) transactions. Therefore, the fact that USDT maintains an upward trend can be interpreted as meaning that funds are continuously flowing into the coin market. However, the size of the candlestick is not very important because it is thought that new funds will flow in only when a gap occurs and rises on the USDT and USDC charts. Although USDC maintains a high market cap, it is one of the stablecoins with little support for trading pairs on exchanges around the world. However, since the market capitalization is maintained at a high level, it is less than USDT, but I think it exerts some influence on the coin market. In particular, since USDC is likely to be composed of US investment capital, it is understood that it is being used as a fund warehouse by institutional investors. Therefore, it is highly likely that USDC funds will be moved according to stock market fluctuations. In that sense, if you look at the flow of the current USDC chart, you can see that a lot of money is flowing out of the coin market. I think it is a disprove that funds are moving from the coin market to the stock market. So, if the stock market shows a clear uptrend, the USDC chart is predicting a trend reversal. Therefore, USDC's downtrend has the potential to limit or plunge the coin market's uptrend caused by USDT's uptrend. We expect this move to act as an opportunity to increase new buying. -------------------------------------------------- -------- (BTC.D chart) (USDT.D chart) It is recommended to look at the BTC.D chart and the USDT.D chart together, but if it is difficult, it is better to look at the USDT.D chart alone. However, since the BTC.D and USDT.D charts show the overall flow of funds in the coin market, it is not possible to know the flow of funds for individual coins (tokens). To see the individual money flow of a coin (token), it is recommended to look at the BTC market chart of the coin (token). Since BTC is used as the key currency of the coin market, I think the BTC market chart best reflects the price fluctuations of coins (tokens) according to BTC price fluctuations. However, coins (tokens) with too low market capitalization are the same regardless of whether they are on the same BTC market chart or USDT market chart. Coming back to the BTC.D and USDT.D charts, Since BTC is the number one market capitalization in the coin market, I think most of the fund size or flow in the coin market is related to BTC price fluctuations. in that sense The BTC.D chart and the BTC dominance chart are charts that allow you to see whether funds are concentrated toward BTC or altcoins. Therefore, rising BTC dominance can be interpreted as meaning that funds are concentrated towards BTC. Just because funds are concentrated towards BTC does not mean that the BTC price will rise. If you don't understand this point, you should be careful because you can interpret it in the wrong direction. When funds are concentrated towards BTC, if USDT dominance rises, the coin market is likely to show a downward trend. The reason is that USDT is a stablecoin that supports trading on exchanges around the world. This is because the increase in USDT dominance means that USDT is increasing through trading, which means that selling in the coin market is increasing. Therefore, as a condition for trading altcoins, you must show a drop in BTC dominance and a drop in USDT dominance. If not, it is because most altcoins are unlikely to make significant gains. BTC dominance is expected to continue to rise. The reason is that there is a BTC halving next year. This is because as the BTC halving approaches, a lot of people will flock to the coin market. And, if the BTC price starts to rise in earnest, funds will inevitably be concentrated towards BTC for the time being. If you don't buy it now, it's because you will buy BTC with the thought that you can't. This will cause altcoins to gradually lose their strength and move sideways or decline, despite the upward trend in BTC price. I think this trend is likely to continue until the BTC price nears 43K. As USDT dominance falls below the uptrend line (1), it becomes important whether it can touch around 6.21. The important divergence of USDT dominance is in the 4.97-5.53 range, and if it falls below this range, the coin market is expected to start such an uptrend in which any coin (token) can be bought and profit will be made. Before that, the question is whether it can fall below the 5.89-6.21 range. I think the coin market must fall below the 5.89-6.21 range to go to a big bull market. So, the next period of volatility on the USDT.D chart is around April 22nd. After this period of volatility, we need to see if it stays below the downtrend line (2). -------------------------------------------------- - I think that the coin market is open to many things that are different from the stock market. In particular, I think it is attractive to be able to know the size and flow of funds. Therefore, it is important to first check the four charts mentioned above rather than relying on all kinds of information to predict the prospects and trends of the investment market, that is, the coin market. After that, I think checking the information going around reduces the possibility of making a wrong decision. When CDBC becomes active, there is a possibility that the influence of existing stablecoins will be weakened. The reason for this is that it is highly likely that direct transactions will be possible with CDBC, i.e. fiat currency. In that case, the size or flow of funds in the coin market may not be known with the above four. Then, an investment environment like the existing stock market will be created, and more individual investors than now will suffer losses. -------------------------------------------------- ------------------------------------------- ** All descriptions are for reference only and do not guarantee profit or loss in investment. ** Even if you know other people's know-how, it takes a considerable period of time to make it your own. ** This is a chart created with my know-how. ---------------------------------
CRYPTOCAP:USDT.DEducation
by readCrypto
2
why DCA is the best strategy for trading?Today I’ll be talking about what is Dollar Cost Averaging (DCA) and how is it used in trading. i will also shine a light on what importance it holds What is dollar-cost averaging (DCA): It is an investment strategy in which you invest a fixed small amount of money at regular intervals. This allows you to take benefit of a market bearish without risking excess funds Allowing you to keep up with greater liquidity and take benefit of market bullish. let's show that with examle : Let's imagine that there is a person called Cecilion and he invests in filusdt with a fixed amount of $ 20 every month. let's imagine the price of that currency in March was $ 5 Then Cecilion will have 4 pieces of filusdt in March. And in April, the value of filusdt fell to $4, and Cecilion bought it for the same amount ($20) to have 4 + 5 = 9 pieces of filusdt in april. And in May, the value of filusdt fell again to $2, and Cecilion bought it for the same $20 , so that he owned 4+5+10 = 19 pieces of filusdt in May. And in the following month, the price of filusdt raise to $10, and Cecilion bought it for the same $20, so that he owned 4+5+10+2=21 pieces of filusdt in June. let's do some math to show the efficiency of this strategy: - Cecilion invested $80 in 4 months and owned 21 pieces of filusdt to be The average purchase price is 80/21 = $3.8 - Let's imagine that Cecilion did not use this strategy and bought filusdt for $80 at once in March when its price was $5 Then a cecilion would have 80/5 = only 16 pieces of filusdt instead of 21 pieces. hope this article was useful to you and appreciated ur support with likes , comment and follow for more.🎯
Education
by ceciliones
23
USDT.D Daily Analysis🟢USDT's dominance bounced from the uptrend line support to form a twin floor pattern and is now above the neckline of this pattern, which also acts as a support. If the retest is successful, it is expected to move upwards, which will be a sign of decline for the market because the USDT and BTC dominance are inversely related to each other. Use the appropriate loss limit for your trades, which has a very high possibility of emotional movement in the market. ⚠ This Analysis will be updated. Amir Hossein 📅 02.19.2022 ⚠️ (DYOR)
CRYPTOCAP:USDT.DEducation
by Trader_Needs
3
Plotting bitcoin and doge supplyTrading view calculates the market cap for bitcoin and doge. I don't know how the market cap is precisely calculated by them. However, for the sake of exploration, I'm going to assume it is simply taking the available supply and multiplying it by the price of one coin. From there, we can use arithmetic to plot the total supply. market cap = supply * price supply = market cap / price That is the line plotted in the indicators underneath each chart. It tracks coins supply denominated in millions, 18.7M bitcoin and 129,427.06M doge. What we see for the bitcoin chart makes a lot of sense. Supply is growing steadily and linearly. Every day about 900 bitcoins are mined (6.25 every 10 minutes approx.). The graph shows that consistent growth at an almost precise 45-degree angle. What we see for the doge chart is puzzling. Every day about 14,400,000 doge coins are mined (10,000 every minute approx.). The daily minting rate is fixed just as with bitcoin. So, I would have expected a similar plot with linear growth. Instead, for the most part, the graph is relatively flat. And for the past 25 days, it is entirely flat. To my surprise, the last value does match with what coinmarketcap reports as the supply: 129.53B What am I missing here?
Education
by yalla-yalla-habibi
BTC USDT correlationHello traders, I think those two charts are useful when used alongside each other in correlation. It is logical that decline in BTC price leads to inflow in USDT and vice versa. So we could say (and the chart shows, that the correlation between the price BTC and market cap of USDT is inversely proportional). For further simple explanation there are some events marked on the chart: Red Flag - A gap in USDT inflow probably shows that institutions are selling before BTC price declines. It is actually only the third candle on USDT when the selloff of the bitcoin occurs. Blue flag - USDT cap fails to pick up momentum and start going down significantly while BTC surges. Orange flag - USDT market cap is flatting out, fails to go lower low and starts forming local higher lows. BTC is still pushing higher, but the trend is converting to the broad bull channel/Trading range as more and more bears are buying into the shorts and more and more bulls are taking profits. Purple flag - BTC - huge rising wedge formed and wedges tend to break to the lower side. Lower high also formed and after. 3rd higher low formed and money starts to flow into USDT. Green flag - wedge top in USDT, while wedge bottom in BTC. Reversal on both charts. At the moment USDT market cap is in sharp decline, which might signal that BTC will be going much higher
Editors' picks
Education
by Sharkethics
23
Could Ethereum beat Bitcoin? Special Analysis!!!Based in my opinion, there's a highly chances that Ethereum going to strenghten the trend during this bull rally. But stil alert in the market cap, the market cap it's key to know what cryptoucrrency are growing up. For that guys, we would need to be so alert if Ethereum it's take dominance of Bitcoin to growing up. Ok look on 2017, in the Ethereum market cap hit the $142 billion in the past bull rally. Meanwhile, Bitcoin market cap hit the $320 billion in the past bull rally. So, Ethereum was more powerful in the past bull rally on 2017 when Ethereum was undervalued to $100 USD and go to $1,500 USD approximately on the end of 2017. And 2018 was the bear market that Ethereum down to $113 USD. Now, actually, Ethereum it's so near to mark a market cap worth in $500 billion. Meanwhile, Bitcoin market cap it's around of $1.10 trilion. Now, if we look, we can to get price future to know the comparsion what will happening if Ethereum reach the $10,000 USD as first objective, or using the the market cap value to use basic mathematic. To know, Etheruem has the supply circulation of 115,795,729.75 ETH and Bitcoin has the supply circulation of 18,704,050.00 BTC. Now if you want to know the price and know what will be happening in this comparison. Look this exercise. The easy way it's know your price future. Imagine that Ethereum going to reach $10,000 USD. This price future it's possible to reach by long term. We use the Ethereum supply circulation and we use it to multiply with $10,000 USD. and the result will be a market cap value of $1.15 trillion. Now, if you want to know that Ethereum going to reach $20,000 USD for coin. This price future it's possible to reach by long term. We apply the same. Multiplying $20,000 USD with the Ethereum market cap. Ethereum could to reach a market cap worth in $2.31 trillion. The 20,000 USD it's so similar when Bitcoin on 2017 reach this price, now Ethereum it's turn. But what will be happening if Ethereum mark the $30,000 USD. Well, the market cap will worth $3.47 trillion Now, if you want to know in that case of Bitcoin what will be happening if Bitcoin reach the $100,000 USD. We need to know that Bitcoin has a supply circulation of 18,704,050 BTC. We multiply the $100,000 USD as future price with the supply circulation. The result will be 1.87 trillion. If Bitcoin reach the mark of $200,000 USD, The market cap will worth 3.74 trillion My Personal Opinion: I believe that Ethereum may to change the things. As Bitcoin and Ethereum are main cryptocurrencies. A lot people are invest in Ethereum than Bitcoin right now if we compare the Ethereum/Bitcoin ratio. And we see that there's a lot chances that Ethereum it's becoming the next Bitcoin. So, I believe that Ethereum have all chances to go easily so fast a market cap of $1 trillion and so near of Bitcoin market cap. But, this chart are so fundamental key if you hold Ethereum in this altseason. becuase Etheurem coul have more ROI than Bitcoin do. And well, I interesting to look Cardano to compare with Ethereum using the market cap of both cryptocurrencies. Because Cardano, it's the next Ethereum killer and remplace of it For that, big news are incoming in Cardano during this bull rally. For that, Cardano it's my cryptocurrency key in this smart exit plan.
CRYPTOCAP:BTCEducation
by harisonhbn9718
1 Year investment can get into 10X - HISTORY REPEATSMaybe the $ 400,000 Bitcoin dream announced in the analysis of others will come true ! With just a quick look at the status of past trends in Bitcoin, you will notice the price ceiling ( ATHs ) and price correction intervals. In each growth period (with more than +10,000% price increase) it has entered a corrective period and a large amount of growth has been taken from it. The correction time periods are almost the same, so the price floor can be easily discovered and based on the past average time, the end period of this period can be guessed. The point of suspicion here is just the interval when we see another foam in the bitcoin chart due to the corona virus. However, at the beginning of 2022, we will have another low, or at the beginning of 2023, when I know the probability of 2023 is higher. With this theory and by drawing a series of average growths of the past, you can easily realize the dramatic increase that is in front of you. We have just crossed the $ 1.5 trillion market cap, which could easily reach 5 or even 10 this year, which could achieve all of this price growth. So in the long run you win. Do not get involved in short-term emotions. Don't Get into FOMO, Keep Calm & Invest Long-Term
Editors' picks
BITSTAMP:BTCUSDEducation
by SasanSeifi
42
JOET vs MTUM & an Understanding of ETF WeightingsThe purpose of this idea is two fold. 1) To discuss the fundamental differences between Market-Cap & Equal-Weighted ETFs & 2) To compare JOET & MTUM ETFs. The first half will cover topics specific to ETFs. The second half and very last section offers a comparison of the funds and conclusions to consider when choosing one. Feel free to skip to the bottom if the analysis or conclusions related to the ETFs is all that you wish to read. Definitions Market Capitalization = (stock price * outstanding shares) Momentum is the speed or velocity of price changes in a stock, security, or tradable instrument. Momentum indicates a stock’s price strength. (Source: Investopedia) Market Cap Weighted Indices Mechanics In market cap weighted indices, price plays a key role of weight. Asset allocation goes to stocks with rising prices over time, while allocation to stocks with decreasing prices, becomes smaller. Behavior Inherently momentum oriented. Concentrated on the winners. Anti-value like dynamic when weighting toward market cap. Performs the strongest in a growth based market or when you have concentration in some sectors or stocks but not others. Conversely, concentration risk is realized if a stock or sector’s market cap becomes concentrated regardless of actual growth and then crashes (eg. 2000 dotcom bubble). Equal-Weight Indices Mechanics In Equal-Weight indices, allocation is spread evenly across all stocks and regularly rebalanced at a predetermined time interval. Rebalancing Stocks in an index which have increased from equal weight average will be in excess of the average weight. The excess (difference between the new price and the price at the average weight) is sold. Stocks which have decreased from the last rebalancing will be below the average weight and the difference is bought. This mechanism ensures all stocks share an equal weight at the time of rebalancing. Because rebalancing typically occurs at predetermined time intervals (often quarterly), there will usually be a degree of asset allocation unbalance between those intervals, as stocks go up and down. Rebalancing daily isn’t practical and would lead to higher management costs. Behavior Broader exposure to the overall market. Favors value stocks and smaller sized companies. Protects against concentrated risk in a few stocks that may dominate a market cap weighted index. Performs the strongest when there is broader market participation and when smaller size / value stocks are in favor. Costs Equal weighted ETFs have higher turnover from rebalancing weighting = higher fees and higher capital gains taxes Market Cap & Equal-Weighted (MISC) Both Equal and Market Cap weighted ETFs require reconstitution or adjustments of their holdings as stocks fall in or out of their parameters of measurement. Examples could be: mergers, delistings, or new inclusions from the parent or underlying index the fund is tracking. --- MSCI USA Momentum Factor ETF - MTUM Dividend Yield: 1.01% Expense Ratio: 0.15% Hierarchy MSCI USA Index (Parent Index) MSCI USA Momentum SR Varient Index (Underlying Index*) MSCI USA Momentum Factor ETF (The Fund / MTUM) *On November 23, 2020, the Fund’s Underlying Index changed from MSCI USA Momentum Index to the MSCI USA Momentum SR Variant Index Prospectus notes “ uses a representative sampling indexing strategy to manage the Fund. “Representative sampling” is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to that of an applicable underlying index.” “The Underlying Index is designed to measure the performance of an equity momentum strategy by emphasizing stocks with high price momentum, while maintaining reasonably high trading liquidity, investment capacity and moderate index turnover....” “The Fund generally will invest at least 90% of its assets in the component securities of the Underlying Index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates, as well as in securities not included in the Underlying Index” How does MTUM determine the makeup of a “Momentum” stock? The exact calculation is not published but, MTUM screens for the best performing US Large and Mid-cap stock price returns over the past three years, 12 months, & 6 months as a factor for inclusion into the fund. What is MTUM’s reconstitution strategy when adding / removing stocks from the fund? MTUM cites using a statistical model published in the Journal of Finance: N. Jegadeesh and S. Titman, “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency.” Journal of Finance, 1993. The research suggests, buying past winners and selling past losers, you can achieve profitable returns. Thesis of the model: Buy past winners and sell past losers in multiple time configurations. (only two configurations are selected in practice) Winners measured over 12, 6, 3, or 1 months prior to the time of purchase. Top winners are selected (selected stocks). Performance of selected stocks are measured over 12, 6, 3, or 1 months after the time of purchase. Winners & losers are selected. Buying more of the winners and selling the losers occurs. Takes advantage of short term market inefficiencies and lag time between corporate events and price movements. Eg. earnings announcements. The research conducted demonstrates buying winners and selling losers works within a 12 month timeframe. Beyond 12 months the strategy breaks down. Because MTUM reconstitutes the fund semi-annually and profitability using this strategy occurs within a 12 month period of time, the fund should be able to realize similar profitable outcomes. Virtus Terranova U.S. Quality Momentum ETF - JOET Dividend Yield: Dividends reinvested Expense Ratio: 0.29% Hierarchy: Terranova U.S. Quality Momentum Index (Underlying Index) Virtus Terranova U.S. Quality Momentum ETF (The Fund / JOET) How does JOET determine the makeup of a “Momentum” stock and the ETF? Screens 500 US large cap stocks for the last 12 months’ total return (technical indicator) 500 then ranked based on momentum and quality Momentum is ranked based on the last 12 months’ total return Quality is ranked based on: return on equity (net income divided by average shareholder equity) debt to equity (total liabilities divided by total shareholder equity) sales growth rate (annualized sales growth rate over the past three years). Pick top 250 The 250 Stocks are then again quality ranked based on the same metrics above. Top 125 chosen for the inclusion into the Underlying Index and used in the fund. Equal weighted / rebalanced quarterly What is JOET’s reconstitution strategy when adding / removing stocks from the fund? Their strategy mimics the above, rebalanced & reconstituted quarterly. --- Factors to consider when selecting JOET vs MTUM Costs of ownership / fees / dividend yield -- JOET is nearly 2x more expensive than MTUM, excluding any dividend yield. MTUM’s ~1% dividend yield is also a consideration when selecting. Stock Selection -- MTUM uses a more technical approach to stock picking, rebalancing, and reconstitution. JOET uses a combination of both technical and fundamental (quality) indicators when stock picking, rebalancing, and reconstitution. Timeframe & Concentration Risk -- With concentration risk in MTUM’s market cap weighted fund, you must consider the forward 12 month performance for the sectors most heavily weighted. Historical data shows equally weighted outperform market cap weighted indices (there are exceptions by sector). Equally weighted indices do a better job of mitigating single-stock event risks. If a stock takes a header during an earnings announcement, the impact on the fund will be lower if in an equally weighted fund. Sector weighting inside the funds -- JOET & MTUM stock selection begins with the largest US market cap weighted stocks. JOET holdings are equal-weighted, but not the sectors that make it up. JOET is made up of ~33% Tech & ~22% Healthcare stocks. 4 of the top 5 weighted sectors make up the majority of both funds. Conclusion / Determination This mostly boils down to deciding which fund does a better job of stock picking. JOET & MTUM use different stock selection techniques for inclusion into their respective funds, however, both utilize market cap weighted indices when making initial stock selections, leading to similarly skewed sector weighting in both funds (particularly Tech & Healthcare). Although, while sector weighting is concentrated similarly in both, the underlying holdings making up those sectors are largely different. Of the roughly 125 stocks in each ETF, only 48 names are shared in both ETFs. If you believe a more technical stock picking process, weighting, rebalancing, and reconstitution strategies will work better, MTUM is the winner. MTUM does carry a higher degree of concentration or single-stock event risk and is not as diversified across sector allocation vs. JOET. However, during times when market cap leaders are leading, MTUM will outperform. If you believe a combination of technical and fundamental quality factors for stock picking & reconstitution strategies will work better, JOET is the winner. JOET is more expensive to own with a higher expense ratio. However, by nature of being equal-weighted, longer term hold durations should have stronger positive outcomes, and lend credence to value-like holdings that have not yet surprised to the upside. JOET also provides exposure to what Virtus believes are higher quality stocks with stronger fundamentals, as that is a criteria for their selections. Because JOET is less than 12 months old, historical performance cannot be compared with MTUM’s. Additionally, because MTUM recently changed the underlying index used for stock selection and inclusion into the fund (Nov 2020), its historical performance cannot be used as an indicator or expectation of how the fund may perform moving forward.
JEducation
by MichaelGoldberg
2
Is it cheap? Why "dilution" is a concept you NEED to understandMany newbie investors get in trouble because they don't understand the relationship between share price and share count. If you're new to investing and you've never heard of "dilution," it's very important that you keep reading this post. If I look at a standard chart of Spirit Airlines's share price, such as a upper chart above, I might conclude that the stock is cheap right now. Spirit shares are trading well below the price they've traded at for the last five years. This is an illusion. The valuation of a company is its share price times the number of shares outstanding. When a company runs low on cash, it sometimes issues and sells new shares. This "dilutes" the ownership percentage of existing shares. Imagine I have a pie, and I've invited you and two other people over for a piece. We're each going to get a quarter of a pie-- a really big slice! But then you decide to invite a friend. The size of the pie doesn't change, so now we have to cut it in fifths so your friend can have a slice. Each of us will get a smaller piece. Issuing new shares works the same way. Since the beginning of the Covid-19 pandemic, Spirit Airlines has issued 29.14 million new shares, increasing its share count by 42.5%. That means that each share now represents a much smaller proportion of the company than it used to. The shares have been "diluted." Because of dilution, looking at a chart of the price of a single share doesn't tell you how "cheap" or "expensive" a company is compared to its historical valuations. Fortunately, there's a quick and easy way to chart a company's actual valuation. Share price multiplied by shares outstanding equals the company's total price tag, its "market capitalization" or "market cap." To chart market cap on TradingView, find and click the button labeled "fundamental metrics for stocks" at the top of the chart. Type "market" in the search box, and TradingView will narrow the list of metrics down to the one you want. Clicking on "market capitalization" will add a time series of the stock's market cap to your chart. When we look at market cap for Spirit Airlines, it doesn't look cheap anymore. Spirit is trading within its price range of the last four years, even though the company is now financially worse off in every way. With earnings negative and sales nearly cut in half, Spirit is priced as if the pandemic had never happened. By charting market cap, you've adjusted for dilution and gained a much better understanding of the asking price.
Editors' picks
NYSE:SAVEEducation
by ChristopherCarrollSmith
52
Which of These Top Market Cap Coins Should You Trade? [In-Depth]During extreme market volatility and outside influence, doing Technical Analysis (TA) can be extremely difficult. The markets move very aligned and if you'd be trading, you'd never be trading a single coin. You are trading the market. We can look at it from a strength rank point of view, where we put all major market caps in a row, and compare how to put up against eachother over time. In this case ETH took the largest losses and BTC is currently on top, confirming it's status of the gold of cryptocurrency. During downtrends it's advisable to hold the strong coins, in this case think BTC, BCH, or XRP. But during uptrends the biggest gains could be made by weaker coins, as they have more opportunity to recover percentage wise. During those times ETH, ADA, and EOS are great candidates for trading. Follow me for consistent high quality updates, with clear explanations and charts. And please like this post to support me. - Trading Guru -------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only! About the links below: 20% Discount on Binance: Did you know that Binance introduced a new system where you can get 20% discount on your fees? Find the step-by-step guide on how to add it to your account on the website of 100eyes Forex & Crypto Scanner: Nobody can keep track of all the pairs on all timeframes. This scanner works on Telegram and sends an automated message including a chart every time something happens to a coin. E.g. it can automatically detect areas of support and resistance, RSI Divergences, Fib Retracements, and more. Recent success stories:
Education
by Trading-Guru
3
Crypto MarketCap Analysis..!!- Total MarketCap Holding the Key Support in 3d Chart & Just Like Bitcoin, It's Also Forming Descending Channel. If Bitcoin Price Jump from 7k Support then Total MarketCap will Automatically Grow & Follow the BTCUSD. - ALTS_MarketCap On the Other Hand, ALTS MarketCap is Forming Bullish Wedge Pattern in Bigger Time frames & I Think Q1 2020 Will be Bullish Year For ALTS too. ALTS Need Some Strong Volume For Wedge Breakout & Growth. - Bitcoin Dominance On The Other Hand, Bitcoin Dominance is Also Increasing after Wedge Breakout & Now Holding the Key Support, (70%) If Support Broken Then We Could See Some Growth in ALTS in Coming Days, Some Bitcoin Updates..!! Please like, subscribe and share your ideas and charts with the community!
CRYPTOCAP:TOTAL2Education
by Faibik
2