Category Archives: Trading

Backtesting

For backtesting software, the historical data is usually in the form of daily opens, closes, highs and lows. That leaves a lot of data off the table. Two daily chart candles may look identical, opening at a low of 1 … Continue reading

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Windows

A gap may open between the trading range of one period and the next. In Japanese candlestick charting, these gaps are called “windows”. Windows are considered continuation patterns. Windows “opened” on the way up are bullish “rising windows”. “Falling windows” … Continue reading

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Flash Crash

On May 6, 2010, the Dow Jones Industrial Average plunged from 10,868.12 to an intraday low of 9,869.62. The intraday decline of 998.5 points, or 9.2%, was the largest intraday point drop in history. The index quickly recovered much of … Continue reading

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Portfolio Pumping

Mutual funds, hedge funds and other professionally-managed investment funds usually compensate their fund managers, in whole or in part, via fund management fees computed as a percentage of assets under management (AUM). Since financial instruments, such as equities, constantly fluctuate … Continue reading

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Euphemisms

Financial market news often describe investors as “bargain hunting” or “profit taking”, depending on the day’s trading direction. These are oversimplistic euphemisms that could mislead neophyte investors. People are not so lucky that the only trading activities that go on … Continue reading

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Anatomy of a Pump and Dump – www.hotstockmarket.com

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Illiquidity

An illiquid stock is one that has only a few postings and trades each day. If you buy this kind of stock, prices very quickly rise. On the other hand, if you sell the same, prices very quickly fall. Normally, … Continue reading

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