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The pound is trading with multidirectional dynamics during the morning session, keeping close to the local highs of May 5. The growth of the instrument is still supported by some weakness of the US currency, as the demand for it is gradually decreasing as there are signals about further tightening of monetary policy in Europe and the UK. Earlier, the President of the European Central Bank (ECB), Christine Lagarde, announced the readiness of the regulator to curtail the quantitative easing program in June, and then launch a cycle of raising the interest rate, which would help curb a sharp rise in inflation.

Significant pressure on the dollar position was exerted by weak macroeconomic statistics from the US, published the day before. Durable Goods Orders slowed from 0.6% to 0.4% in April, worse than analysts' neutral forecasts, while Nondefense Capital Goods Orders excluding Aircraft, rose only 0.3% over the same period after an increase of 1.1% in March. Average market forecasts assumed a slowdown to 0.5%.

According to a study by Loughborough University, the rapid inflation in the UK, which reached 9% in April, had the most negative impact on the living standards of families with children. Prices for consumer goods and services have risen by an average of 400 pounds MoM, or 13% YoY, with food prices up 9.3% over the past year and childcare costs up 6.7%. Meanwhile, chief executive of Ofgem, the independent energy regulator for Great Britain, Jonathan Brearley, has predicted a further 42% increase in electricity tariffs by October, adding more than 800 pounds to the average annual bill. Thus, already next winter, about 9.6 million British families will face a fuel shortage, since about a tenth of the family budget will be directed to pay for electricity.

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Bollinger Bands in D1 chart show moderate growth. The price range expands, freeing a path to new local highs for the "bulls". MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic, being at its highs, is again trying to reverse downwards, indicating risks of overbought GBP in the ultra-short term.

Resistance levels: 1.2600, 1.2674, 1.2800, 1.2900 | Support levels: 1.2500, 1.2400, 1.2250, 1.2163

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ADAUSD is trading within a downtrend; however, the price has been consolidating for the last two weeks in anticipation of new movement drivers. The cryptocurrency market is in a state of balance, as the consequences of further tightening of monetary policy in the United States are balanced by the possibility of a recession in the American economy, in which assets alternative to the dollar will again have a chance to ascend.

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Currently, the token is testing the level of 0.4882 (Murray [1/8]), consolidation below which will give the prospect of further decline to the area of 0.3906 (Murray [0/8]), 0.2929 (Murray [-1/8]). If the center line of Bollinger Bands and the level of 0.5859 (Murray [2/8]) is broken out, the growth of quotations may resume to the levels of 0.6835 (Murray [3/8]), 0.7812 (Murray [4/8]). However, a further decline in the trading instrument seems to be preferable for now, since technical indicators confirm the continuation of the downtrend: Bollinger Bands and Stochastic are reversing downwards, and MACD histogram is stable in the negative zone.

Resistance levels: 0.5859, 0.6835, 0.7812 | Support levels: 0.4882, 0.3670, 0.2929, 0.1953​

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A long-term investment strategy is one that entails holding investments for more than a full year. This strategy includes holding assets like bonds, stocks, exchange-traded funds (ETFs), mutual funds, and more. Individuals who take a long-term approach require discipline and patience, That's because investors must be able to take on a certain amount of risk while they wait for higher rewards down the road.

Many market experts recommend holding stocks for the long term. The S&P 500 experienced losses in only 11 of the 47 years from 1975 to 2022, making stock market returns quite volatile in shorter time frames.1 However, investors have historically experienced a much higher rate of success over the longer term.

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In a low-interest rate environment, investors may be tempted to dabble in stocks to boost short-term returns, but it makes more sense—and pays out higher overall returns—to hold on to stocks for the long term. In this article, we show how you may be able to benefit from holding stocks for a longer period of time.​
  • Long-term investments almost always outperform the market when investors try and time their holdings.​
  • Emotional trading tends to hamper investor returns.​
  • The S&P 500 posted positive returns for investors over most 20-year time periods.​
  • Riding out temporary market downswings is considered a sign of a good investor.​
  • Investing long-term cuts down on costs and allows you to compound any earnings you receive from dividends.​

Better Long-Term Returns
The term asset class refers to a specific category of investments. They share the same characteristics and qualities, such as fixed-income assets (bonds) or equities, which are commonly called stocks. The asset class that's best for you depends on several factors, including your age, risk profile and tolerance, investment goals, and the amount of capital you have. But which asset classes are best for long-term investors?

If we look at several decades of asset class returns, we find that stocks have generally outperformed almost all other asset classes. The S&P 500 returned an average of 11.82% per year between 1928 and 2021. This compares favorably to the 3.33% return of three-month Treasury bills (T-bills) and the 5.11% return of 10-year Treasury notes.

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Emerging markets have some of the highest return potentials in the equity markets, but also carry the highest degree of risk. This class historically earned high average annual returns but short-term fluctuations have impacted their performance. For instance, the 10-year annualized return of the MSCI Emerging Markets Index was 2.89% as of April 29, 2022.3

Small and large caps have also delivered above-average returns. For instance, the 10-year return for the Russell 2000 index, which measures the performance of 2,000 small companies, was 10.15%.4 The large-cap Russell 1000 index had an average return of 13.57% for the last 10 years, as of May 3, 2022.56

Ride Out Highs and Lows
Stocks are considered to be long-term investments. This is, in part, because it's not unusual for stocks to drop 10% to 20% or more in value over a shorter period of time. Investors have the opportunity to ride out some of these highs and lows over a period of many years or even decades to generate a better long-term return.

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Looking back at stock market returns since the 1920s, individuals have rarely lost money investing in the S&P 500 for a 20-year time period. Even considering setbacks, such as the Great Depression, Black Monday, the tech bubble, and the financial crisis, investors would have experienced gains had they made an investment in the S&P 500 and held it uninterrupted for 20 years.

While past results are no guarantee of future returns, it does suggest that long-term investing in stocks generally yields positive results, if given enough time.

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Investors Are Poor Market Timers
Let's face it, we're not as calm and rational as we claim to be. In fact, one of the inherent flaws in investor behavior is the tendency to be emotional. Many individuals claim to be long-term investors until the stock market begins falling, which is when they tend to withdraw their money to avoid additional losses.

Many investors fail to remain invested in stocks when a rebound occurs. In fact, they tend to jump back in only when most of the gains have already been achieved. This type of buy high, sell low behavior tends to cripple investor returns.

According to Dalbar's Quantitative Analysis of Investor Behavior study, the S&P 500 had an average annual return of just over 6% during the 20-year period ending Dec. 31, 2019. During the same time frame, the average investor experienced an average annual return of about 2.5%.

There are a few reasons why this happens. Here are just a couple of them:​
  • Investors have a fear of regret. People often fail to trust their own judgment and follow the hype instead, especially when markets drop. People tend to fall into the trap that they'll regret holding onto stocks and lose a lot more money because they drop in value so they end up selling them to assuage that fear.​
  • A sense of pessimism when things change. Optimism prevails during market rallies but the opposite is true when things turn sour. The market may experience fluctuations because of short-term surprise shocks, such as those related to the economy. But it's important to remember that these upsets are often short-lived and things will very likely turn around.​
  • Investors who pay too much attention to the stock market tend to handicap their chances of success by trying to time the market too frequently. A simple long-term buy-and-hold strategy would have yielded far better results.​

Lower Capital Gains Tax Rate
Profits that result from the sale of any capital assets end up in a capital gain. This includes any personal assets, such as furniture, or investments like stocks, bonds, and real estate.

An investor who sells a security within one calendar year of buying it gets any gains taxed as ordinary income. These are referred to as short-term capital gains. Depending on the individual's adjusted gross income (AGI), this tax rate could be as high as 37%.

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Any securities that are sold after being held for more than a year result in long-term capital gains. The gains are taxed at a maximum rate of just 20%. Investors in lower tax brackets may even qualify for a 0% long-term capital gains tax rate.

Less Costly
One of the main benefits of a long-term investment approach is money. Keeping your stocks in your portfolio longer is more cost-effective than regular buying and selling because the longer you hold your investments, the fewer fees you have to pay. But how much does this all cost?

As we discussed in the last section, you save on taxes. Any gains from stock sales must be reported to the Internal Revenue Service (IRS). That ends up increasing your tax liability, which means more money out of your pocket. Remember, short-term capital gains can cost you more than if you hold your stocks for a longer period of time.

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Then there are trading or transaction fees. How much you pay depends on the type of account you have and the investment firm that handles your portfolio. For instance, you may be charged a commission or markup, where the former is deducted when you buy and sell through a broker while markups are charged when the sale is directed through their own inventory. These costs are charged to your account whenever you trade stocks. This means your portfolio balance will drop with every sale you make.

Firms often charge ongoing fees, such as account maintenance charges, that can also put a dent in your account balance. So if you're a regular trader who has a short-term goal, your fees will add up even more when you factor in transaction fees.

Compounding With Dividend Stocks
Dividends are corporate profits distributed by companies with a track record of success. These tend to be blue chips or defensive stocks. Defensive stocks are companies that do well regardless of how the economy performs or when the stock market drops.

These companies pay regular dividends—usually every quarter—to eligible shareholders, which means that you get to share in their success. While it may be tempting to cash them out, there's a very good reason why you should reinvest the dividends into the companies that actually pay them.

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If you own any bonds or mutual funds, you'll know about how compound interest affects your investments. Compound interest is any interest calculated on the principal balance of your stock portfolio and any earlier interest you earned. This means that any interest (or dividends) that your stock portfolio accumulates compounds over time, thereby increasing the amount of your account in the long run.​

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Best Types of Stocks to Hold for the Long-Term
There are several things to consider when you want to purchase stocks. Consider your age, risk tolerance, and investment goals, among other things. Having a handle on all of this can help you figure out the kind of equity portfolio you can create in order to meet your goals. Here's a general guide you can follow as a starting point that you can tailor to your own situation:​
  • Choose index funds. These are ETFs that track specific indexes, such as the S&P 500 or the Russell 1000, and trade just like stocks. But unlike stocks, these funds come with a lower cost and you won't have to pick and choose specific companies in which to invest. Index funds give you similar returns to the indexes they track.​
  • Consider dividend-paying stocks. These types of stocks can help add value to your portfolio, especially when dividends are reinvested.​
  • Companies with high growth can boost your portfolio. Growth stocks tend to be associated with companies that are able to generate a significantly high revenue at a faster rate than others. They are also better equipped to deliver strong earnings reports. Keep in mind, though, that this degree of growth comes with a higher level of risk, so you'll have to be a little savvier than novice investors if you want to go this route.​
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As always, it's a good idea to consult with a financial professional, especially if you're new to the investment world.

What Are the Tax Benefits of Holding a Stock Long Term?
The IRS taxes capital gains based on short-term and long-term holdings. Short-term capital gains are taxed on assets sold within a single year of ownership while long-term gains are taxed on the sale of assets held for more than 12 months.

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Short-term capital gains are treated as ordinary income, which means you could be taxed as high as 37% based on your tax bracket. Long-term gains, on the other hand, are only subject to a tax of 0%, 15%, or 20%. The rate depends on your adjusted gross income and filing status.

How Long Do You Have to Hold a Stock to Be Considered Long Term?
As with any asset, you must hold a stock for a minimum of 12 months in order for it to be considered a long-term investment. Anything under that is deemed a short-term holding.9

Can You Sell a Stock Right After Buying It?
How long you can wait until you sell the stock after buying it depends on the broker. Some firms require that you wait a certain amount of time (at least until the settlement date) to sell your stock. Others allow a certain number of same-day transactions within your account. People who make more than the allotted number of trades within the same day are considered day or pattern traders and are generally required to keep a minimum balance in their accounts.

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The Bottom Line
People who invest in stocks can benefit from many different trading strategies. Investors who have more experience and a higher amount of capital at their disposal may be able to ride the market waves and make money using short-term trading techniques. But that may not work for those who are just starting out or aren't able to tolerate too much risk. Holding stocks for the long-term can help you ride the highs and lows of the market, benefit from lower tax rates, and tend to be less costly.

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The S&P 500—short for the Standard & Poor's 500 Index—is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. While it assumed its present size (and name) in 1957, the S&P actually dates back to the 1920s, becoming a composite index tracking 90 stocks in 1926. The average annualized return since its inception in 1926 through Dec. 31, 2021, is 10.49%. 2 The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2021, is 10.67%.

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The average annual return (AAR) is the percentage showing the return of a mutual fund in a given period. In other words, it measures a fund's long-term performance, so it's a key tool for investors considering a mutual fund investment.

> The S&P 500 index acts as a benchmark of the performance of the U.S. stock market overall, dating back to the 1920s (in its current form, to the 1950s).
> The index has returned a historic annualized average return of around 10.5% since its 1957 inception through 2021.
> While that average number may sound attractive, timing is everything: Get in at a high or out at a relative low and you will not enjoy such returns.

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The History of the S&P 500

> During the first decade after its introduction in 1957, and reflecting the economic expansion in the U.S after World War II, the value of the index rose to slightly over 800.
> From 1969 to 1981, the index gradually declined to fall under 360 as a sign of high inflation.
> During the 2008 financial crisis and the Great Recession, the S&P 500 fell 46.13% from October 2007 to March 2009.
> By March 2013, the S&P bounced back from the crisis and continued on its 10-year bull run from 2009 to 2019 to climb more than 250%.
> The COVID-19 pandemic in 2020 and the subsequent recession caused the S&P 500 to plummet nearly 20%.
> The S&P 500 recovered during the second half of 2020 reaching a number of all-time highs in 2021.

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How Inflation Affects S&P 500 Returns
One of the major problems for an investor hoping to regularly recreate that 10.67% average return is inflation. Adjusted for inflation, the historical average annual return is only around 7%. There is an additional problem posed by the question of whether that inflation-adjusted average is accurate, since the adjustment is done using the inflation figures from the Consumer Price Index (CPI), whose numbers some analysts believe vastly understate the true inflation rate.​

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On the daily chart, the first wave of the higher level (1) develops, within which the fifth wave 5 of (1) forms. Now, the third wave of the lower level iii of 5 is developing, within which the wave (iii) of iii is forming.

If the assumption is correct, the price will grow to the levels of 153.45–160. In this scenario, critical stop loss level is 125.6.

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The S&P 500 Index has long been one of the best-known proxies for the U.S. stock market, and several mutual funds and exchange traded funds (ETFs) that passively track the index have become popular investment vehicles. These funds do not seek to outperform the index through active trading, stock picking, or market timing; instead, relying on the inherent diversification of the broad index to generate returns.

Indeed, over long-term horizons, the index typically produces better returns than actively managed portfolios, especially after taking into account taxes and fees. So, what if you had just held the S&P 500, using an index fund or some other means of holding the stocks in it?

> The S&P 500 Index is a broad-based measure of large corporations traded on U.S. stock markets.
> Over long periods of time, passively holding the index often produces better results than actively trading or picking single stocks.
> Over long-term horizons, the index typically produces better returns than actively managed portfolios.

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What If You Had Invested in Just the S&P 500?
People often use the S&P 500 as a yardstick for investing success. Active traders or stock-picking investors are often judged against this benchmark in hindsight to evaluate their savvy.

Let's take a historical example: Soon after Donald Trump entered the race for the Republican nomination for president, the press zeroed in on his net worth. Financial experts have pegged his net worth at $2.5 billion. One of the cornerstones of Trump's campaign was his success as a businessperson and his ability to create such wealth. However, financial experts have pointed out that if Trump had liquidated his real estate holdings—estimated to be worth $500 million—back in 1987, and invested them in the S&P 500 Index, his net worth could be as much as $13 billion.

It is just one more example of how the S&P 500 Index continues to be held up as the standard by which all investment performances are measured. Investment managers are paid a lot of money to generate returns for their portfolios that beat the S&P 500, yet on average, most don't.

This is the reason why an increasing number of investors are turning to index funds and ETFs that simply try to match the performance of this index. If Trump had done so back in 1987, he would have made 26 times his money for an average annualized return of 12.3% by the time he was inaugurated (from 1987 to 2015—the date of calculation for projected net worth). But hindsight is 20/20, and he could not have known that.

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Stock price is an indicator of a company's market value, but the price of a share of stock will also depend on the number of shares outstanding. The reason why certain stocks are priced so high is usually due to the company having never or rarely having completed a stock split.

There are many ways to evaluate a stock in addition to its absolute share price. Here, we take a look at some of the largest companies in the U.S. and abroad.​
  • Companies are typically valued by their total market capitalization on a stock exchange, or number of shares outstanding times the share price.​
  • Still, many investors are interested in the most pricey shares available on an exchange, which can indicate exclusivity.​
  • Companies can also be ranked by revenue and profitability.​

Top Companies by Stock Price
The most expensive publicly traded share of all time is Warren Buffett’s Berkshire Hathaway (BRK.A), which was trading at $458,675 per share, as of January 2022. Berkshire hit an all-time high on Jan. 18, 2022, at $487,255. Thanks to spectacular shareholder gains and the idiosyncrasies of its founder, this share value is unlikely to be matched by anything other than continued gains in Berkshire’s share price.

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Top Companies by Market Cap
By market capitalization, as of January 2022, Apple (AAPL) is the biggest company at $2.652 trillion, followed by Microsoft (MSFT) at $2.222 trillion, Google (GOOGL) at $1.725 trillion, Amazon.com (AMZN) at $1.446 trillion, Tesla (TSLA) at $947.92 billion, and Meta (FB), formerly Facebook, at $843.34 billion.

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Back in 2007, Chinese energy giant PetroChina (PTR) reached an estimated market value of around $1 trillion. However, this valuation didn't stick. As of January 2022, PTR's market capitalization stood at just $146.95 billion.

The Bottom Line
On a pure market value measure, Apple has often been considered the most valuable, publicly traded company of all time. Although Microsoft did briefly hit the $2 trillion market cap mark in June 2021. It is certainly possible another company’s market cap will exceed these measures, and maybe—though less likely—another company will surpass Berkshire Hathaway as the highest priced single stock share.​

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Solid ECN gives multiple account types on the MetaTrader 5 trading platform to help individuals and corporate customers to exchange Forex and Derivatives online.

All Retail, associates, and White-Label clients have the possibility to access various spreads and liquidity via state-of-the-art automatic trading platforms. Solid ECN grants an exceptional type of account options that clients can choose to experience a tailored trading experience that perfectly fills their needs.

United with excellent trading conditions and lightning-fast execution, Solid ECN provides all the tools and aids required for clients of any level to accomplish their trading goals.
Min Deposit​
Max Leverage​
Min Spread​
Fee​
Micro​
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2 pips​
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Standard​
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0.3 pips​
No​
Swap Free​
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No​
ECN​
$10​
1:1000​
0​
$3​

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A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.

One key difference between a typical database and a blockchain is how the data is structured. A blockchain collects information together in groups, known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.

A database usually structures its data into tables, whereas a blockchain, like its name implies, structures its data into chunks (blocks) that are strung together. This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled, it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact time stamp when it is added to the chain.​

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Wilder originally developed the ATR for commodities, although the indicator can also be used for stocks and indices. Simply put, a stock experiencing a high level of volatility has a higher ATR, and a low volatility stock has a lower ATR.

The ATR may be used by market technicians to enter and exit trades, and is a useful tool to add to a trading system. It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations. The indicator does not indicate the price direction; rather it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is fairly simple to calculate and only needs historical price data.

The ATR is commonly used as an exit method that can be applied no matter how the entry decision is made. One popular technique is known as the "chandelier exit" and was developed by Chuck LeBeau. The chandelier exit places a trailing stop under the highest high the stock reached since you entered the trade. The distance between the highest high and the stop level is defined as some multiple times the ATR.

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For example, we can subtract three times the value of the ATR from the highest high since we entered the trade.

The ATR can also give a trader an indication of what size trade to put on in derivatives markets. It is possible to use the ATR approach to position sizing that accounts for an individual trader's own willingness to accept risk as well as the volatility of the underlying market.

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Altcoins are generally defined as all cryptocurrencies other than Bitcoin (BTC). However, some people consider altcoins to be all crytocurrencies other than Bitcoin and Ethereum (ETH) because most cryptocurrencies are forked from one of the two. Some altcoins use different consensus mechanisms to validate transactions and open new blocks, or attempt to distinguish themselves from Bitcoin and Ethereum by providing new or additional capabilities or purposes.

Most altcoins are designed and released by developers who have a different vision or use for their tokens or cryptocurrency. Learn more about altcoins and what makes them different from Bitcoin.

The term altcoin refers to all cryptocurrencies other than Bitcoin (and for some people, Ethereum).
There are tens of thousands of altcoins on the market.
Altcoins come in several types based on what they were designed for.
The future value of altcoins is impossible to predict, but if the blockchain they were designed for continues to be used and developed, the altcoins will continue to exist.

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Understanding Altcoins​

"Altcoin" is a combination of the two words "alternative" and "coin." It is generally used to include all cryptocurrencies and tokens that are not Bitcoin. Altcoins belong to the blockchains they were explicitly designed for. Many are forks—a splitting of a blockchain that is not compatible with the original chain—from Bitcoin and Ethereum. These forks generally have more than one reason for occurring. Most of the time, a group of developers disagree with others and leave to make their own coin.

Many altcoins are used within their respective blockchains to accomplish something, such as ether, which is used in Ethereum to pay transaction fees. Some developers have created forks of Bitcoin and re-emerged as an attempt to compete with Bitcoin as a payment method, such as Bitcoin Cash.

Others fork and advertise themselves as a way to raise funds for specific projects. For example, the token Bananacoin forked from Ethereum and emerged in 2017 as a way to raise funds for a banana plantation in Laos that claimed to grow organic bananas.

Altcoins attempt to improve upon the perceived limitations of whichever cryptocurrency and blockchain they are forked from or competing with. The first altcoin was Litecoin, forked from the Bitcoin blockchain in 2011. Litecoin uses a different proof-of-work (PoW) consensus mechanism than Bitcoin, called Scrypt (pronounced es-crypt), which is less energy-intensive and quicker than Bitcoin's SHA-256 PoW consensus mechanism.

Ether is another altcoin. However, it did not fork from Bitcoin. It was designed by Vitalik Buterin, Dr. Gavin Wood, and a few others to support Ethereum, the world’s largest blockchain-based scalable virtual machine. Ether (ETH) is used to pay network participants for the transaction validation work their machines do.​

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Trading volume is a measure of how much a given financial asset has traded in a period of time. For stocks, volume is measured in the number of shares traded. For futures and options, volume is based on how many contracts have changed hands. Traders look to volume to determine liquidity and combine changes in volume with technical indicators to make trading decisions.

Looking at volume patterns over time can help get a sense of the strength of conviction behind advances and declines in specific stocks and entire markets. The same is true for options traders, as trading volume is an indicator of an option’s current interest. In fact, volume plays an important role in technical analysis and features prominently among some key technical indicators.​
  • Volume measures the number of shares traded in a stock or contracts traded in futures or options.​
  • Volume can indicate market strength, as rising markets on increasing volume are typically viewed as strong and healthy.​
  • When prices fall on increasing volume, the trend is gathering strength to the downside.​
  • When prices reach new highs (or no lows) on decreasing volume, watch out—a reversal might be taking shape.​
  • On-balance volume (OBV) and the Klinger oscillator are examples of charting tools that are based on volume.​
What Is the Most Common Time Frame for Measuring Volume in Stocks?
Daily volume is the most common time frame used when discussing stock volume. Average daily trading volume is the daily volume of shares traded, averaged over a number of days; this smooths out days when trading volume is unusually low or high.​

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Basic Guidelines for Using Volume​

When analyzing volume, there are usually guidelines used to determine the strength or weakness of a move. As traders, we are more inclined to join strong moves and take no part in moves that show weakness—or we may even watch for an entry in the opposite direction of a weak move.

These guidelines do not hold true in all situations, but they offer general guidance for trading decisions.

1. Trend Confirmation
A rising market should see rising volume. Buyers require increasing numbers and increasing enthusiasm to keep pushing prices higher. Increasing price and decreasing volume might suggest a lack of interest, and this is a warning of a potential reversal. This can be hard to wrap your mind around, but the simple fact is that a price drop (or rise) on little volume is not a strong signal. A price drop (or rise) on large volume is a stronger signal that something in the stock has fundamentally changed.

2. Exhaustion Moves and Volume
In a rising or falling market, we can see exhaustion moves. These are generally sharp moves in price combined with a sharp increase in volume, which signals the potential end of a trend. Participants who waited and are afraid of missing more of the move pile in at market tops, exhausting the number of buyers.

At a market bottom, falling prices eventually force out large numbers of traders, resulting in volatility and increased volume. We will see a decrease in volume after the spike in these situations, but how volume continues to play out over the next days, weeks, and months can be analyzed by using the other volume guidelines.

3. Bullish Signs
Volume can be useful in identifying bullish signs. For example, imagine volume increases on a price decline and then the price moves higher, followed by a move back lower. If, on the move back lower, the price doesn’t fall below the previous low, and if the volume is diminished on the second decline, then this is usually interpreted as a bullish sign.

4. Volume and Price Reversals
After a long price move higher or lower, if the price begins to range with little price movement and heavy volume, then this might indicate that a reversal is underway, and prices will change direction.3

5. Volume and Breakouts vs. False Breakouts
On the initial breakout from a range or other chart pattern, a rise in volume indicates strength in the move. Little change in volume or declining volume on a breakout indicates a lack of interest and a higher probability for a false breakout.

6. Volume History
Volume should be looked at relative to recent history. Comparing volume today to volume 50 years ago might provide irrelevant data. The more recent the data sets, the more relevant they are likely to be.​

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A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.

Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.​
  • A bull market is a period of time in financial markets when the price of an asset or security rises continuously.​
  • The commonly accepted definition of a bull market is when stock prices rise by 20% after two declines of 20% each.​
  • Traders employ a variety of strategies, such as increased buy and hold and retracement, to profit off bull markets.​
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Understanding Bull Markets​

Bull markets are characterized by optimism, investor confidence, and expectations that strong results should continue for an extended period of time. It is difficult to predict consistently when the trends in the market might change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.

There is no specific and universal metric used to identify a bull market. Nonetheless, perhaps the most common definition of a bull market is a situation in which stock prices rise by 20%, usually after a drop of 20% and before a second 20% decline. Since bull markets are difficult to predict, analysts can typically only recognize this phenomenon after it has happened. A notable bull market in recent history was the period between 2003 and 2007. During this time, the S&P 500 increased by a significant margin after a previous decline; as the 2008 financial crisis took effect, major declines occurred again after the bull market run.​

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