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    Gate.io Blog GATE.IO AMA-A Must-Read for Beginners, Nov.3rd
    Gate.io AMA

    GATE.IO AMA-A Must-Read for Beginners, Nov.3rd

    09 November 17:06


    Q: As beginners, there are three methods of analysis that have to be noted.


    A: After a lot AMA events, let's get a little summary about three basic analysis methods.

    Fundamental Analysis

    What is fundamental analysis?

    Analyze the company’s basic operations and development and understand the company’s intrinsic value, including financial analysis, management analysis, and industry analysis.

    Representative

    1.Such investors are called value investors, and their representatives include Warren Buffett.

    2.Buffett: "Owning it and expecting it to rise next morning is very stupid."

    Financial Analysis

    1.Can reflect the company's past operating performance and trends. Specifically, it includes three financial statements- Balance Sheet, Income Statement, and Cash Flow.

    2.For example: the company's profit and loss, debt ratio, cash flow, price-earnings ratio and so on.

    Management Analysis

    1.It can reflect the company's future development model and financing capabilities.

    2.For example: the past work experience of the CEO and other management, negative or positive news, the cooperation relationship with the government and other institutions, etc.

    Industry Analysis

    It can reflect the development cycle of the industry in which the company is located.

    The Advantages of Fundamental Analysis

    1.Relatively easy to understand.

    2.A more comprehensive understanding of the development of the company and price.

    The Disadvantages of Fundamental Analysis

    1.It may take a long time to realize profit, which is not suitable for short-term investors

    2.Forecast accuracy is not high.

    Examples

    1.Go to the main website of the coin company. Usually, the basic information will be shown on the bottom part of the webpage.

    2.Like below, you can check all history and future vision of Gate.io.

    3.Also, you can check how many partners we are working with.

    4.Services shows what we can provide to our partners and users.

    5.Normally the registration date is shown at the bottom of the page, which means Gate.io is running stablely for around 8 years.

    Technical Analysis

    What is technical analysis?

    Study past price trends and trading volume, and predict future price trends.

    Representative

    1.This type of investor is called a technology investor, and representatives include Mark Minervini.

    2.Minervini: "If the price does not go up, it proves that investors are not optimistic about the future."

    Technical indicators

    For example: use the "Golden Cross" of the KDJ indicator to buy and sell at the "Death Cross".

    The Advantages of Technical Analysis

    1.Buy at a relatively low price and sell at a relatively high point, thereby increasing the rate of return.

    2.Easy to buy and sell according to technical analysis.

    The Disadvantages of Technical Analysis

    1.The success rate is not high, usually less than 50%.

    2.Some principles of technical analysis are difficult to understand, causing many people can't get the points.

    News Analysis

    What is News Analysis?

    Analyze the company-related news, including the company's development, industry growth, national policies, etc., and judge whether the price will rise or fall due to these news.

    Representative

    1.Such investors are usually called "speculators." Representatives include George Soros, a financial crocodile who specializes in finding bubbles in the market and dumping local currencies in large quantities.

    2.Soros: "The market is stupid, you don't have to be too smart."

    Media news

    For example: Elon Musk, the world’s richest man, added the Bitcoin "#" to Twitter on social media. After a while, Bitcoin mining companies rose sharply, such as SOS , MARA, RIOT.

    Official news

    For example: ELON MUSK once stopped using BTC to purchase Tesla cars, causing the price of BTC to fall.

    Insider news

    Increased funding of a certain coin, etc.

    The Advantages of News Analysis

    1.Cultivate a world view, which is conducive to the deployment and profitability of long-term investment.

    2.Understanding what's happening in the world and making investments interesting.

    The Disadvantages of News Analysis

    1.Information may be lagging, that is, the price has been raised before the good news appears.

    2.Blindly follow the trend of speculation, leading to being "Got Played for A Sucker", that is, leaving the market at a loss.

    Example

    1.Like what mentioned in the previous AMA, @Whale_alert is very useful for users to recognize the market flowing. How many times do BTC transfer from exchange to their wallets, or from wallets to exchanges.All this information can help you to understand how the traders would like to play.

    2.And if you would like to know the news about any coin, remember to Goolgle. Before you start to play a coin, try to understand all its background and the future planning of its mother company.

    Conclusion

    1.Generally speaking, beginners should learn Fundamental Analysis first. Because basic analysis is the basis for judging the value of a company, it can help us find high-quality companies that grow healthily.

    2.Each of the three methods has advantages and disadvantages.

    Note

    If you are a short-term investor

    Technical and News analysis accounted for 80%, and Fundamental Analysis accounted for 20%.

    If you are a long-term investor

    Technical and Fundamental analysis accounted for 80%, and News Analysis accounted for 20%.

    Summary Chart

    Please check the chart as follows.

    Methods

    Definition

    Examples

    Advantages

    Disadvantages

    Fundamental Analysis

    Analyze the company's basic operations and development, and understand the company's intrinsic value.

    1. Financial Analysis

    2. Management analysis

    3. Industry analysis

    Easy to understand

    It may take a long time to earn the profit

    Technical Analysis

    Study past price trends and trading volume, and predict future price trends.

    Technical indicators

    Buy at lows and sell at highs to increase the rate of profit return

    The success rate is not high, usually less than 50%

    News Analysis

    Analyze the news related to the company and judge that the price will rise or fall due to these news。

    1. Media news

    2. Official news

    3. Insider news

    Cultivate worldview

    Information may be lagging



    Q: Let's go to question session now.


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