The SEC just disrupted a niche corner of the stock market and their involvement could potentially lock retail investors out of areas of significant opportunity. To put it shortly, the SEC is not allowing broker-dealers to quote non-reporting or “dark” companies. In other words, if a company doesn’t report timely financial statements and reports […]
What is a Measured Move? A measured move is a swing trading concept that assumes the next leg of a chart pattern or trend will be roughly equal to the previous leg. You use measured moves to set your profit targets and project the magnitude of the next price swing. Assuming that the future […]
Day traders need volatility in the markets but what happens when volatility becomes too much and what triggers a volatility halt? Earlier this year, we witnessed extreme volatility in “meme stocks” such as GameStop ($GME) and movie chain AMC Entertainment Holdings ($AMC) which triggered trading halts. Several other once-sleepy stocks like Bed Bath and Beyond ($BBBY) and Koss […]
Most of the time when we make a trade, we’re making a pretty specific bet. We buy Apple because we think Apple is going up for whatever reason. It’s a simple bet with one way to win: the price has to go up. With pairs trading, you’re combining two separate bets into one. Let […]
It’s tough to know how much leverage is in the market until everyone needs liquidity at the same time. As the 2008 financial crisis and the recent Archaegos blow-up demonstrated, leverage can quietly gather in odd corners of the market. I mean, who would have thought a bunch of media stocks like Viacom or […]
The recent sharp selloff in US markets might be indicative of a broader weakness developing in market breadth. Due to the top index components being so heavily weighted in the indexes, their strength is presenting a potentially misleading picture of how the average stock is performing. How Indexes Work: Why Index Calculation Can Distort […]
Penny stocks are high risk mainly due to the lack of liquidity and company information as well as the high volatility associated with lower priced stocks. Many day traders looking to make money in the stock market prefer to buy low-priced stocks. This is because they offer higher than normal returns. Penny stocks can […]
If you’re a day trader that doesn’t mind some risk, you may find yourself interested in penny stocks. These stocks have the potential for huge returns but they come with a lot of risks. One of the reasons why they are considered risky investments is because, in most cases, they are traded in over-the-counter (OTC) […]
Backtesting is testing trading strategies against historical data. It serves as a research tool for traders and analysts to stress test their current strategies, find new strategies, or find which factor contributes the most to a strategy’s success. Most backtesting is done with code, using libraries from languages like Python and R and hence, […]
Many traders check the daily gainers & losers list in their screener and find an overhyped penny stock that could be a favorable short-selling opportunity. But when they go to short the stock, their broker frustratingly stops them in their tracks, leaving the trader asking “why can’t I short some penny stocks?” The short […]
