What is the Sharpe ratio?

What is the Sharpe ratio

The Sharpe Ratio was developed by Nobel Prize William Sharpe of Stanford University. It measures numerically the historical Profitability/Volatility (standard deviation) ratio of an Investment Fund. It is calculated by dividing the yield of a fund minus the risk-free interest rate between the volatility or standard deviation of that return over the same period. Sharpe Ratio = Fund performance – Risk-free interest rate … Read more

Gann Theory in Trading

Gann Theory in trading

Gann Theory is a concept that suggests financial markets with many fluctuations always tend toward equilibrium. This claim is based on elements of geometry, mathematics, astronomy, and even biblical references. In other words, Gann Theory states that regular patterns can be observed in financial markets. Despite experiencing numerous fluctuations and price changes, markets ultimately move toward balance. According to Gann, … Read more

ZLEMA Indicator (Zero Lag Exponential Moving Average)

ZLema Moving Average

Moving averages (MAs) are a cornerstone of technical analysis in Forex trading, offering insights into price trends and potential market reversals. Among the plethora of moving averages available, the Zero Lag Exponential Moving Average (ZLEMA) stands out for its unique ability to minimize lag while retaining smoothness in its calculations. In this article, we will explore what ZLEMA is, how … Read more

VIX Index: What is it and How Does it Work?

VIX Index vs SP&500

The original name of the VIX Index is the “Volatility Index,” and it was created by the Chicago Board Options Exchange (CBOE) in 1993. It was designed to measure the market’s expectations for short-term volatility. Volatility is a concept that helps measure the uncertainty of a market or a specific asset in a simple way, but this does not mean … Read more

What is slippage in stocks day trading?

Slippage in the stock markets

In an ideal world, when a daytrader place an order, the trade is executed at exactly the price specified. However, under certain conditions, the trade or operation can be executed at a different price. For example, if an intraday trader places a stop loss after having taken a long position – in other words, a trade in which he or … Read more

The role of fear in investment

Sure we’ve all read a book or article on sectors, markets or companies with potential, deep fundamental analysis, or interesting investment systems.

But investors and traders less often discuss a subjet that ultimately has as much or more influence on investment: psychology in general and in particular the fear that an investor feels at some point.

When the market falls hard and savings that has cost so much effort to get lost value per minute, is inevitably to feel fear.

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What are meme stocks?

What are meme stocks?

Meme stocks are the result of applying popular culture to financial markets. The list of companies turned into meme stocks on U.S. exchanges has been expanding in recent months, affecting a broad group of companies. But what exactly are meme stocks? Meme stocks are publicly traded companies whose stock prices are driven by investor platforms created in online forums. In … Read more

Quadruple witching – Definition and Market Impact

The term “Quadruple Witching” refers to a specific date on which four different types of financial derivatives contracts expire simultaneously. These contracts include stock index futures, stock index options, single-stock futures, and single-stock options. This event occurs four times a year, on the third Friday of March, June, September, and December. On the Quadruple Witching day, market participants may witness … Read more

What are pending orders?

buy limit order

Pending orders are instructions given by traders to their brokers or trading platforms to buy or sell an asset at a specific price in the future. These orders are also known as limit orders or stop orders and allow traders to set up trades ahead of time, even when they are not actively monitoring the market. Pending orders are useful … Read more

Oscillator of a Moving Average (OsMA) – Main Features

OsMA Oscillator

The OsMA (Moving Average of Oscillator) is a technical analysis indicator that measures the difference between an oscillator (usually the MACD) and its signal line (usually a moving average of the MACD).  The traditional OsMA is usually derived from the MACD (Moving Average Convergence Divergence) indicator, which is itself a widely used momentum indicator, but other oscillators can also be … Read more