Why prices move, and why beating the market is hard

What a return is, why prices are hard to predict, and how real evidence is different from a good story.

Module 2 of 26, in the stage "How markets work". 6 lessons.

Lessons

1. Why prices jump aroundTell apart something you noticed, a guess about why it happened, and a proper test. 18 min.
2. How emotions move pricesUse ideas from psychology as possible explanations, without claiming every trader behaves the same way. 18 min.
3. Styles like value and size, explainedBuild a factor return, and tell the difference between taking on a known risk and real skill (alpha). 18 min.
4. News, expectations and ‘priced in’Explain why public news gets priced in fast, and why a good result can still push a price down. 16 min.
5. Luck or skill: coin flips, fund managers and convincing chartsSee how many lucky long records pure chance produces, and why a chart made of coin flips still shows trends. 16 min.
6. Interest rates and inflation: why a rate change moves pricesLink the RBA cash rate to share, bond and currency prices in plain cause-and-effect terms. 18 min.

Concepts covered

• Overfitting

Keep going

• Previous module: Trading basics
• Next module: Trends, order fills and a famous day-trading setup
• All 26 modules and 157 lessons
• Open the first lesson in the course

General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.