eli5: How do stock traders know when to buy and sell, is it pure guessing or is there factors that affect it?
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In very ELI5, Stock trading is betting on the price of commodities like gold or grain or shares of the profit of a company. Traders can bet on the price going up or going down.
This forms a very complex international market, with the predictions of future prices influencing the current prices!
Stock Traders skill is to predict the changes in the markets with the aid of **statitistics/math/AIs and of course “confidential information”** (think of a big company merger or massive firing of employees).
It’s not a coincidence that many big big traders serve on the boards of many companies.
To avoid conflicts of interest, a crime called “i**nsider trading**” prevent people working for a company to use inside information to gain financial gains. < LOL, this unfortunately isn not a joke and gets ignored by 99% of the times.
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