Transductive reasoning is a type of flawed logic that is most commonly used by very young children to connect meaning between events where there is no correlation. With adulthood it takes the form of superstition or being fooled by randomness. Transductive reasoning causes people to think there are connections between events that are not accurate […]
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A follow-through day is a bullish signal created by William J. O’Neil to quantify a high probability change in a current stock market direction from a downtrend to starting a new up trend. Follow-through days signal during downtrends, corrections, and bear markets when a key stock market index closes much higher than the previous day’s
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This is a guest post by Manu Shoker of manushoker.com. Why Trading and Investing are so Fundamentally Different There is a popular misconception that trading and investing could be used interchangeably with one another. But as professional traders and investors can attest to, they are both radically different. It’s easy to mix the terms when both
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The uptick rule stops the short selling of a stock in a sharp downtrend by restricting the ability to sell when a stock is going down in price and only allowing new short selling as a stock is going up in price. To follow the rule a new short sell can only occur at a
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Insider trading is defined as buying or selling stocks on public exchanges using information that is not publicly known or available to other investors or traders. This happens when people with access or connections to confidential or non-public financial information, news, or facts about a publicly traded company trade based on what they know or share
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Everyone should have their own strategy and plan for trading or investing in the stock market to create an edge in their own timeframe. Each time you buy a dip in price action it should create a good risk/reward ratio and fit your own risk tolerance and have the potential to achieve your own return
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This is a guest post from Tino @tradersreality. This article originally appeared on tradersreality.com and is reposted here with permission. Everyone’s effort towards understanding the psychology of how to trade, really goes to waste if there is no understanding of how the market really works. There is massive pressure on new and developing traders to learn various ways
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The scientific method is a fact finding method of gathering knowledge that was developed in the 17th century to search for the truth for cause and effect relationships in science. This method requires observing along with skepticism about what is being observed. Cognitive assumptions can be biased and filter how someone interprets information so a filter
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In trading the two terms tactic and strategy are not used enough and when they are used many times they are mixed up. Trading tactics are the actual means that are used to achieve a single specific goal or target, but a trading strategy is the big picture plan that combines many different tactics together to achieve the overall objective of
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The Occam’s razor heuristic was created by William of Ockham who was a philosopher and theologian who preferred simplicity for explanations over unneeded complexity. Occam’s razor is one way to solve problems using the principle that the most obvious answer is the right one and adding complexity in reaching a solution should not be done
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