For example, if the daily ATR is $5, that means that the price is likely to have a daily range of $5 during the next session. So, if the price has already made the $5 to the upside, then taking a long position near the high of the day is not ideal. That is because the ...
Understanding what day trading is allows investors to strategically plan their investment strategies based on day-trading requirements. Investors who don’t want to have minimum balance requirements enforced on their account would be wise to watch how often they day trade, to stay below the FINRA r...
Settlement daterefers to the date on which payment is made to settle the purchase or sale of a security such as a stock, bond, mutual fund, or exchange-traded fund (ETF). If you purchase a security, the settlement date is the day you must pay for your purchase. If you sell a securi...
The calculation is based on the volatility of the trading day. The difference between the closing price and the day's low/day's high is calculated. The difference between the two values is then divided by the distance between the day's low and day's high (difference). This value is sub...
How Does a Forward Premium in Forex Trading Work? In aforward contract, you settle on a price to pay now to acquire the underlying asset at a future date. When the expectation is that a currency will rise in the future, investors would pay a premium now to settle on a price to acquir...
Currency trading is buying or selling currency pairs in the foreign exchange market at a specific exchange rate. The forex market is one of the largest and most liquid markets in the world, reaching a daily turnover of $6.6 trillion in 2019.1 In its simplest form, if you travel internati...
Average True Range (ATR) is the average of true ranges over the specified period. ATR measures volatility, taking into account any gaps in the price movement. Typically, the ATR calculation is based on 14 periods, which can be intraday, daily, weekly, or monthly. To measure recent volatility...
What is the importance of risk management? Risk management is crucial to any trading strategy or style. As a trader can't be profitable if he's wiped out within a string of a few bad trades. You need to protect your capital, because that is what ensures your survival andabilityto bounce...
What is Stop-Loss Order and Understanding Its Types? What is Stop-Loss Order? In stock market trading, a stop-loss order is an effective risk management technique that triggers an automatic sell order when the price of a stock reaches a certain level. It helps traders to limit potential lo...
Trading signals are typically generated when the direction of the trend changes and the bricks alternate colors. For example, a trader might sell the asset when a red box appears after a series of climbing white boxes. Similarly, if the overall trend is up (lots of white/green boxes) a tr...