What is Price Discovery Price discovery is the process where buyers and sellers determine where a transaction can take place based on supply and demand. This evaluation process uses the economic concept of supply and demand to find a price where a buyer and a seller agree to trade. The supply and demand for […]
Hot IPOs are becoming rarer in the late stages of this post-GFC bull market cycle. The primary reason for that is that private market financing allows early-stage firms to remain private longer. This trend is turning around, starting with the IPO of cloud data platform Snowflake (SNOW) in September, with several other hot upcoming […]
Opening your first trading account can seem daunting given the sheer number of options out there. Fortunately, most brokerage firms follow a straightforward process similar to the one laid out below. Getting your account open is just a matter of choosing a broker, providing some personal information, and funding your account. Once the formalities […]
Almost every trading strategy aims to exploit one of two prevailing phenomena in financial markets: mean reversion or momentum. In a nutshell, mean reversion strategies assume big moves will partly reverse, while momentum strategies assume big moves will continue in the same direction. This article will explain the phenomenon of mean reversion in stock […]
How To Categorize a Sell off When speaking of a market sell off, it’s first crucial to categorize what we mean by a sell-off. Your definition should vary based on your holding period and time frame, but we need to be consistent. Here are a few ideas on how to categorize the severity of market […]
We have all heard of that one friend who made thousands of dollars trading stocks and chances are they have been in multibagger stocks. For an investor or day trader, finding a stock whose price will appreciate multiple times the initial investment value is a dream. When traded wisely, stocks can offer huge returns. […]
The ability to detect a trading signal above the noisy day-to-day gyrations of the market is crucial for anyone who seeks to become a trader. Buy and hold investors only make money when the market goes up, but when you have a long timeframe, the averages work in your favor. But traders have to […]
High probability trading strategies are a good starting point but you must also consider some other important metrics to help maximize your profitability. “My best trader makes money only 63% of the time. Most traders make money only in the 50% to 55% range. That means you’re going to be wrong a lot. If […]
Most people associate “insider trading” with secret tips and federal agents busting into a dirty hedge fund like Showtime’s Billions. That’s insider trading based on material non-public information (MNPI). We will cover the illegal side briefly, but today’s article is mainly about the legal open market activities of company insiders. When an “insider” of […]
Failing to prepare is preparing to fail . . . Building a watchlist of tickers that you’re interested in trading for the day is an essential part of a profitable trading process. A watchlist is simply a short-list of stocks that meet or might meet your criteria for a profitable trading setup. While your […]
