Sign in Subscribe

Topic

trading

A collection of 74 issues

Understanding the Pivot Point: A Trader’s Compass

What Is a Pivot Point? In technical analysis, a pivot point is a calculated price level that acts as a compass for intraday traders. Derived from the previous session’s high, low, and close, it forecasts potential support and resistance zones. Because it blends historical data with forward-looking insights, the

Understanding Overbought and Oversold Conditions in Trading

Introduction to Overbought and Oversold Overbought and oversold are foundational concepts in technical analysis, guiding traders as they evaluate whether price momentum has stretched too far in one direction. Identifying these zones helps market participants anticipate potential reversals, refine entry and exit points, and manage risk more effectively. What Does

Out-Of-The-Money Option: A Comprehensive Guide

What Is an Out-Of-The-Money Option? An out-of-the-money (OTM) option is a call or put contract whose strike price is unfavorable compared with the current market price of the underlying asset. For a call, the strike lies above today’s spot price; for a put, the strike sits below it. Because

Understanding the Order Book: Definition, Components & Trading Advantages

Introduction The order book is the beating heart of every modern trading platform, yet many newcomers overlook its crucial insights. Whether you buy Bitcoin, shares, or commodities, mastering the order book can sharpen entries, exits, and overall strategy. By visualizing real-time demand and supply, the tool reveals where price pressure

Understanding Omnibus Accounts: Definition, Benefits & Key Considerations

What Is an Omnibus Account? An omnibus account is a pooled securities account maintained by a broker or custodian in which the transactions of multiple individual investors are combined under a single master account. While the broker knows the identity and positions of each underlying client, the external counterparty—such

Understanding OCO Order: A Smart Trading Tool

What Is an OCO Order? OCO stands for One Cancels the Other, a conditional order type that pairs two instructions—usually a stop-loss and a take-profit—under a single ticket. When price triggers one leg, the other is automatically canceled, allowing traders to pre-plan exits and automate risk management. Most

Understanding Naked Short Selling: Mechanism, Risks, and Regulation

What Is a Naked Short? Naked short selling is a contentious strategy that sells shares neither borrowed nor located, creating phantom supply that can skew prices. The practice magnifies market volatility, draws regulatory scrutiny, and differs sharply from traditional short sales that require a confirmed borrow. Trade Timing and Settlement

Understanding Naked Option Strategies: Risks & Rewards

Definition of a Naked Option A naked option, also called an uncovered option, is an options contract sold without owning the underlying asset or holding an offsetting position. Because the writer lacks collateral, potential losses can be theoretically unlimited if the market moves sharply against the position. Naked Call Explained

Understanding the Moving Average: A Trader’s Guide

What Is a Moving Average? A moving average (MA) is a statistical measure that smooths out price or data fluctuations by creating a constantly updated average. Instead of reacting to every tick, it highlights the underlying trend direction, making noisy charts easier to interpret. Why Traders Use Moving Averages MAs

Understanding Mean Reversion: A Practical Guide for Traders

Introduction In today’s data-driven markets, understanding mean reversion gives traders a measurable edge. The concept says extreme price moves are usually temporary and will drift back toward an average, creating repeatable opportunities. What Is Mean Reversion? Mean reversion is rooted in the idea that price deviations from a long-term