Trading concepts

The Dow theory is a financial theory stating the market is in an upward trend if all its averages are in sync.For example, the industrials average should move coherently to the transportation average. The Dow Theory is one of the oldest theories of technical analysis...

The Risk/Reward ratio is a measure of the potential profit potential of trade compared to its risk.It a very important metric used by traders to manage their risk on each trade they consider.With win rate it helps estimate how profitable a strategy is. There are many...

The Sector Rotation Strategy assumes investors invest cyclically their funds in predictable industries.This theory is used by traders to anticipate investments & divestment and thus profit for price variations.It links market cycle to economic cycles. Sector...

Multiple types of orders exist and can be used to best suit your trading strategy.A market order buys or sells shares at the available price until all the order is filled.A limit order buys or sells shares at a fixed given price. There is no guarantee it'll be fully...

Trailing stop helps trader secure their trade automatically when it moves in their favor.It can let traders book profit or mitigate risk if the price reverses.Trailing stop only moves in one direction as price progresses.It can be set as a percentage of price or a...

Cycles are are patterns which repeat (in the market, business or in other contexts).Market cycles often have 4 phases.Identifying the current phase of the cycle can be close to impossible.Assets behave differently at the different phases of the market cycle. Even...

Most people all across the globe have a perception that trading is gambling. There are also many others who think the opposite, trading is not gambling. So, what is the reality? Is trading really gambling? Has it some similarities with gambling? Or, it isn't gambling...

For you trading to get better, you have to keep track of what you do. That's what your journal is all about.It lets you keep track of what you learn, what you do, your trades, your emotions and your errors.Keeping track and then reviewing it will help your trading to...

Trading is often viewed as an activity of complete freedom.But to succeed, every trader must set rules he is willing to follow.Rules help traders manage their emotions and relieves them from excessive stress. Financial trading is not just about numbers, figures, and...

There is a long list of stocks, mutual funds, and exchange-traded funds to pick for trading and investing. Understanding how to pick stocks is absolutely imperative to any trader or investor's success. We have put together an easy, complete, and step-by-step guide for...

Let's set the stage of trading plan with 2 quotes: By failing to prepare, you prepare to fail.Benjamin Franklin and Give me six hours to chop down a tree and I will spend the first four sharpening the axe.Abraham Lincoln That is the importance of planning. Without...

Technical analysis and trading gurus always advise to main discipline to be a successful trader. But, it is very difficult and sometimes seems impossible to main discipline when you are trading. Here, a proven trading strategy comes into the mix of things. A...

Before you enter the complicated world of investing and trading, it is crucial to understand the difference between investing and trading. Which is better for you, investing or trading. And, which is more profitable investing or trading.  Investment means buying...

Behavioral finance is a sub-field of behavioral economics.It is built on the assumption humans are not rational individuals.It also propounds that psychological influences and biases can cause market anomalies and stock market anomalies in particular. The phrase...

Technical analysis or TA is the study of the past movements of financial markets and securities including price and volume.Fundamental analysis focuses on figuring out the true value of stocks.Fundamental Analysis vs Technical Analysis has several similiarities and...

People from all across the globe consider trading as a high barrier-to-entry profession. They often ask questions like “why should I trade?” “why trading is important?” or “is trading really worth it?” Don't be anxious and overthink. If you have enough ambition and...

Whenever you make a trade, you always ask yourself why it is a good idea. Fundamental analysis answers questions arising in your mind. Fundamental analysis is one of the two key stock analysis techniques. The second one is technical analysis. Both require great tools...

Do you know what stats say about the people who set on the journey to becoming stock market or Forex traders? Only 10% of those taste success in the stock market trading and make money. The other 80% lose their money and the remaining 10% achieve break even. That is...

Once Lawrence J. Peters said, “If you don't know where you are going, you will probably end up somewhere else.” That is the importance of goals in the simplest words. People with vague vision never reach their destinations. They don't get up every morning with a...

Perhaps everyone familiar with the world of trading is curious about one thing. How much do day traders make? Questions about returns for day traders often arise. But, it is next to impossible to answer those questions. A very few day traders disclose their income....

How do you measure and track your trading performance? What is the best yardstick that can help you track trade performance? And, how do you know how good you are as a trader?  Good? Better? Best? Mediocre? Or bad? Monitoring trade performance is an important...

Do you want to learn what is copy trading? Or, how does copying work? Then you are on the right platform because we are going to learn all about copying in this article. In a hurry? Just want to start copy trading now?Click here to start copytrading right now on...

Professional traders do not consider trading as a hobby. When you take trading as a business, you develop a proper plan that becomes your stair to reach heights of success. Also, you prepare yourself for the uncertainty, risks, losses, and stress. We often find...

Losses are inevitable in trading and no trader not even the most successful traders can make 100% winning trades. That is why risk management is paramount to keep manage risks carefully.  Trading is a very risky game that requires you to be disciplined in each...

There is no trading strategy in the world that guarantees us success every time. No matter how careful and vigilant we are in our trading, there are things that are out of our control. If we carefully analyze a company and follow market trends, we cannot claim to be...

A stock can see its price go to zero.Traders can profit from prices rising or dropping.Traders can loose more than their initial investment in some cases. Everyone who wants to enter the arena of the stock market must know that the games played in this arena are...

There are multiple reasons for fluctuations in stock prices.Those reasons include fundamental factors, technical factors, supply and demand, and market sentiment. Share price variation is a common phenomenon in stock markets and every one of us is aware of it. Stock...

Dual listing, also known as cross-listing or multiple listing, is a phenomenon where a company seeks to list its stock on different stock exchanges. The dual listing requires companies to meet certain legal and regulatory requirements and deposit fees. Dual listing...

Stock investors can be paid to own stock.Dividends are a way for company to share a part of their profits with their shareholders.There are many reasons for companies to pay dividends and not to pay dividends and each company can decide. Dividends are a part of...

What is Opening Range? The opening range is basically the high and low price after a market opens. This period is usually the very first 30 minutes or 60 minutes of trading. During this time frame, you must try to discover the high and low of the day. Additionally,...

What is a Delta? This is the ratio that compares change in price of a derivative to the change in price of the underlying assets. It is equally known as the age ratio. Delta is a risk sensitive guideline adopted in testing derivatives. It is one of the numerous...

Dividend payment attracts positive public sentiment and more and more investors begin to take interest in its shares.The company loses its cash in hand by paying dividends and hence its overall price gets reduced. Dividends are a part of profits that a company earns...

The Internet is flooded with individuals claiming to be knowledgeable about ways to becoming a “successful trader” and making a “secondary income”.  Almost everywhere you turn to, there is an Ad that would in a way assure you that it is achievable to make a lot of...

Introduction There's a possibility that you have heard a financial news reporter utter something along the lines of: The central bank governor came out slightly hawkish today after bouts of strong economic data The terms Hawkish and Dovish refer to whether central...

What Is Mean Reversion? Mean reversion, or reversion to the mean, is a term used in finance. It indicates that asset price volatility and historical returns eventually will go back to the long-run mean or average mark of the whole dataset. What is mean reversion in...

What Is Time In Force? Time in force is a unique instruction used when setting a trade. It shows the period an order will stay active before it is completed or terminated. These alternatives are definitely crucial for active traders and enables them to be very precise...

What Is Short Covering? Short covering is also known as buying to cover. It takes place when an investor purchases shares of stock so as to close out an open short position. As soon as the investor buys the amount of shares that he or she sold short and gives back...

Swing Trading Swing trading is dependent on finding out swings in stocks, commodities, and currencies that occur over a period of days. A swing trade can span from a few days to a few weeks to get executed. As opposed to a day trader, a swing trader would probably not...

What is a Choppy Market? This is a market lacking any clear trend. Orderly markets trend upward and downward, providing traders with the chance to place their bets. There is no noticeable pattern to the movement that occurs in a choppy market. The adjustment happens...

Introduction Trading has a special language of its own. For a new trader, words like long, short, bullish and bearish should not be strange to you. You must know what they mean as they are used to describe the state of the market. Long: this is a trading term for...

What is Interest Coverage Ratio? Interest coverage ratio also known as times interest earned ratio evaluates the ability of an organization to take care of its outstanding debt. It is a type of debt ratio traders and investors use to measure the financial condition of...

What is Wall Street? Wall Street is a street that you can find in the lower Manhattan part of New York City. It has historically been the headquarters of some of the U.S. largest investment banks and brokerages. As well as the home to the New York Stock Exchange. Find...

What is Yield Curve? A yield curve is also known as a structure of interest rates. The Yield Curve is a graphical representation of current conditions in a certain fixed-income bond market. It is a captured image of interest rates in the market. It is a basic yet...

What is a Falling Knife? A falling knife is used to refer to a rapid drop in the price of security such as a stock. In such cases, it is advisable for traders to patiently wait for the price to attain the lowest point before buying it again. Is catching a falling...

If we have to define the stock market using just one word, we would most probably define it as “volatile.” The world of stock markets is full of uncertainties. Although we conduct detailed technical and fundamental analysis, we cannot tell when the market will...

What is Zero Sum Game? This is a condition in a game theory where the loss incurred by an individual is equal to the gain of another individual. Therefore, the net change in wealth is equal to zero. A zero-sum game can have as little as two players participating or as...

The act of purchasing securities based on rumors, and then selling them once news breaks, may seem risky, but it can also be a smart move. Most markets, particularly financial markets, operate on the principle of buying the rumor and selling the news. You can turn the...

The strategy of scalping, or trading on the short side, has been around for a very long time. This trading method involves buying and selling stocks multiple times within a day for a small profit. A trader usually does this once he has made a profit from a trade....

If I have to name a single tool that is absolutely imperative for a trader's success, it would be a stop-loss order. A stop-loss (abbreviated as SL) order is a crucial part of a trader's exit plan when the market goes against expectations.  How stop-loss orders are...

Regardless of whether you are not a stock merchant, you presumably realize that the financial exchange doesn't open all week long, which can restrict the amount of days one can exchange during a year.  Considering that, you might think about the quantity of...

In light of the ongoing coronavirus pandemic, most people are refocusing their energies on physical and mental health, relationships with family and loved ones, and improving our skill sets and self-improvement. Let's deep dive into consolidating stock in this...

AMC investors have been talking about dark pool activity recently as trading volume seems elevated. Dark pool dealing has an impact on AMC stock, according to Wall Street Memes. In recent years, dark pools have grown to become a major element of the global equity...

For most new investors, a standard cash account is probably the best option. But as you gain more experience, a margin account may be the better choice. Cash Account A standard cash account allows you to buy and sell securities with money from your bank account...

Are you wondering about what tick size is? Well, you will get answers to your questions over here. Tick size is actually used for referring to the minimum price movement of a trading instrument in the market. There are different price movements for different trading...

The profit and loss statements or p and l is a term that refers to the financial statement. To summarize the cost, revenues, and expenses, companies use them. These expenses, costs, and revenues incur during a special period of time. Most of the time, businesses do...

Do you want to know about Short Sale Restriction (SSR)? In this blog, we will tell you about SSR. SSR was a rule that came in the year 2010. It is also referred to as the alternate uptick rule. This means that you can only short a stock on the uptick. It is one of the...

You might have heard about market makers. Market making is a term that refers to making relations with the market. The markets makers are the firms or individuals who quote the two-sided markets. It particularly adds the quotes of the security. What is market-making?...

Are you thinking that is reverse stock split good or bad? What is a reverse stock? We are here to help you out. If you will have two bills of $50 and one bill of $100. You might answer that it doesn't matter if you understand the immediate impact of reverse stock...

1 penny doubled every day for 30 days = $5,368,709.12 (which is way more than $1 million)If you consider 10% fees and 10% taxes, after 30 days you "only" have $11,910.65 (only 0.22% of $5,368,709.12)You can play with these figures and charts here What will you like to...

Are you worried about how to find 10 bagger stocks? We are here to help you out easily. Here is a blog that will help you out! A detail about 10-bagger Fidelity mutual fund manager Mr Peter Lynch used this term for investing in the 1980s and 1990s. This term describes...

The performance of investment funds measures by the gauge is The Calmar ratio. The investment funds include: commodity trading advisors (CTAs) 2. hedge funds. In this post, we will discuss Calmar Ratio and calculate it. A formula used to measure the performance of any...

Traders and investors worried by inflation often ask a very pertinent question: how to profit from inflation? The surge of inflation rightly has investors concerned. Ideas are always there, yet they don't know what they should do to cope with inflation.  When...

You can trade with leverage too. But what will you get? Is it good or bad? Well, we are going to tell you over here in this blog post. Trading with 1:500 leverage or 1:1200 is often considered as a highway to hell. BEWARE: Leverage can be very risky and lead to big...

Are you into stocks? Do you want to invest in the right thing at the right time? So, you must know about the 52-week range definition in the stock market. We will tell you everything in this blog post and tell you what is best and what is not! Meaning of 52-Week Range...

"How to find penny stocks before they explode" is a very interesting question. You might also want to know as penny stocks are enticing especially if you aspire to make huge sums of money without investing too much capital. However, playing with penny stocks is...

FOMO trading means, in the simplest terms, trading in an undisciplined way. FOMO is the acronym for Fear of Missing Out. Sudden rises and falls in the markets have been attributed to FOMO trading recently. So, what is this FOMO trading? Most people want to know...

Do you want to trade like a casino? Do you want to always be profitable? Then our today's post is for you. Our today's guide on how to trade like a casino will demonstrate how you can make consistent profits as a professional trader. As we all know, the trading arena...

An iceberg order is a whales' secret that they use to hide what they are buying or selling. It also helps them hide the exact size or value of the big orders. Big investors and large institutions use it as a tool to avoid unnecessary price fluctuations of the...

Best Day of The Week to Buy Stocks? Currently, in many financial markets, the trading hours are very long. And although sometimes it may seem like a great advantage, it can also be a drawback to achieving good results. And it is that not all...

On the off chance that you're a financial backer, you should be adaptable, neither a bull nor a bear. I don't have the foggiest idea when I cancel the Blow OFF Top of the Air pocket Blowing. Positively trending Business sector will end. Following 12 years being long...

This article will clarify these terms utilising models you can connect with. To comprehend Buy Open VS Buy Close and offer to Buy Open VS Buy Close, you want to comprehend Options exchanging. We should go bit by bit. What Are Options in Trading according to Buy Open...

Buy Side vs Sell Side Analysts: An Overview Much has been the product of the "Wall Street analyst," even though it has been a uniform task description. In reality, there are huge variations among different types of Buy Side vs Sell Side Analysts. True, each spends an...

What Exactly is Buying on Weakness? Buying On Weakness is the famous and also most proactive buying and selling method. Try a method in which a dealer enters into lengthy positions beforehand of the predicted reversal in a safety fee. This method is derived from the...

One of the alternatives new buyers make is whether or not to be a discretionary trader or a machine dealer. Discretionary buying and selling are choice-primarily based totally buying and selling. The dealer comes to a decision which trades to make primarily based...

What is an Exhaustion Gap? How to Find it? The Exhaustion gap looks like the most interesting hole withinside the morning. However, what makes the space exact is the quickness of the inversion. The Exhaustion gap ordinarily shows up at the acquiescence of longer rate...

Understanding and forecasting market direction are the keys to profitable trading. In fact, predicting market direction is the foundation for your overall trading performance. If you predict the market direction correctly, the door of significant gains is open to you....

A forward stock split is a maneuver strategy whereby listed companies increase the number of shares available. Are you interested in learning all about it and how it differs from the reverse stock split? And want to understand through examples why it's important? Then...

The Gap and Go strategy are among the most popular trading strategies. It enables traders to make significant gains by capitalizing on gaps. Why do such gaps appear and what are the causes of gap formation? What is the Gap and Go strategy? And how can you also take...

High probability trading means the likelihood of whether you trade will win or lose. It is important for all traders to look for trading setups that offer a higher probability of winning than losing.  Most novice traders do not consider high probability trading....

To trade breakouts with confidence, you first need to know how to avoid false breakouts. Breakouts are lucrative for traders because they provide a perfect point to enter and a perfect spot to place stop-losses. However, it is also important to know that breakouts can...

Understanding long squeeze is important for traders to avoid losses. It is a market situation in which holders of financial instruments feel a lot of selling pressure. They sell their holdings in such circumstances to protect their capital against huge losses. ...

Knowing how to calculate stocks profit is important. Accurate stock profit calculation lets you know your gains or losses. Although it seems pretty simple because most traders, especially beginners, think that it involves a simple calculation. According to them,...

Are you investing in a currency exchange or Forex market and want to know all about grid trading? Then you don't need to look further. Grid trading is one of the most popular investment strategies among currency pairs or Forex investors. It involves a series of buying...

Do you want to know how to short sell on Robinhood? Then you aren't alone. You might find a lot of people asking about how to short stocks on Robinhood, especially when you are in the community of traders. Therefore, we decided to help you and others interested in...

Have you already become a victim to kill candle and want to know about kill candle trading strategies? Then you are on the right platform at the right time.  Kill candle is among the most dangerous candlestick for bulls. It causes huge losses for traders all of a...

Lot size in Forex is as important as having a reliable Forex trading strategy. Experienced traders know the importance of lot size in Forex trading. However, most beginners and novices don't know about lot size and its importance.  Lot size in Forex directly...

Stock float, high float stock, and low float stock meaning are important to know in stock trading. Why so? Because stock float directly influences stock price as well as stock trading strategies. High float stocks attract medium or long-term traders. Whereas,...

Market-On-Close orders or MOC orders are non-limit market orders that enable traders to execute their trade orders either at the closing price or very close to the closing price. In fact, Market-On-Close orders are very useful to order types that prove extremely...

Market data available for traders is of two types – Level 1 stock data and Level 2 stock data. Level 2 data is the ultimate source for traders to get more detailed information than Level 1 data. Want to know more about market data and types of market data? Then...

Naked trading refers to trading without using trading indicators. If your trading indicators confuse you and you don't feel comfortable using them, then you should turn to naked trading.  Technical analysis is a complex process that involves using technical...

Post-earnings announcement drift is an anomaly in financial markets. It causes cumulative abnormal returns of stocks of a company to drift for an extended period of time. This is a very important phenomenon for traders to understand. Therefore, we decided to provide...

An OTO order is a conditional order that consists of two linked orders. This is an advanced order type that enables traders to optimize their trading. How so? Because this order type empowers traders to achieve optimal price fills on both entries and exits. So, this...

Orders entry is the order to enter a trade at a specific price level. There are different types of order entry as well strategies to do in the best way. Moreover, it is important for traders to fully understand entry orders for better trading. That said, the purpose...

Part-time day trading is an idea that is attracting more and more attention across the globe. It is alluring because who in this world wouldn't want to earn some extra money. Additionally, it offers flexible working hours as well as working from anywhere in the...

A partially filled trade execution refers to a trade execution where a partial amount of your trade order is filled at your desired price. Do you want to know more about it? Then you are on the right platform. We are going to explain what partially filled means with...

Position size is one of the most important but often overlooked aspects of trading. It is neglected even by experienced traders. However, beginners and novices meet catastrophic ends just because of overlooking position size.  So, what is position size and why is...

Do you want to know all about the New York forex session? Then you are on the right platform at the right time. We understand how important it is for forex traders to know about the New York forex session as almost 17% of forex transactions occur in New York. ...

Pump and dump penny stocks scheme is a form of fraud you experience in investment and securities. Fraudsters make a lot of money using this fraudulent scheme by selling penny stocks at inflated prices.  Do you want to know how a pump and dump penny stocks scheme...

Retail trader meaning is something everyone wants to know. Additionally, people also want to know about the differences between retail and institutional traders. Are you among these people and interested in knowing retail trader meaning and how retail traders are...

Every trader wants to know about the risk of ruin. This is a very crucial aspect that all traders must know about because it's the hard-earned money that's at stake. Risk of ruin refers to the chance of losing a significant part of or the entire balance. Calculation...

In the world of trading, traders and investors tackle risk through two approaches – risk-on and risk-off. Both types of approaches involve following trends. Traders and investors closely watch market sentiment to predict market trends. So, they make a profit by...

Scaling in trading is a technique of trade management. It allows traders to minimize potential losses and maximize potential gains. Additionally, this technique empowers them to take full advantage of price action and never miss out on any price movement.  So,...

Tape reading refers to making trading decisions based on information collected from observations of stock price and volume reports. It is one of the most ancient trading techniques.  So, what is this tape reading? Is this old-fashioned trading technique still...

“What is a good stop-loss percentage?” is a question that all traders must know. As you know, setting a good stop-loss is integral to the long-term success of a trader. In fact, put aside practical trading, traders shouldn't even think about trading without it....

Always remember that trading mistakes are common and inevitable. As you know, making mistakes is a common and inevitable phenomenon in almost every aspect of human life. AND trading isn't any exception because making mistakes in a risky arena like trading is even more...

Stop hunting is a trading technique that most traders employ to force other traders to abandon their positions. The goal of those market influencers is to increase volatility and also lay the foundations for highly lucrative trades. This, stop hunting turns out to be...

Trading wicks is a trading concept that all traders must know and understand. However, it is among the most misunderstood technical analysis concepts despite being a key concept. In fact, candlestick wicks are a very important part of your technical analysis. You can...