Volatility is considered the most accurate measure of risk and, by extension, of return, its flip side. The higher the volatility, the higher the risk – and the reward. That volatility increases in the transition from bull to bear markets seems to support this pet theory. But how to account for surging volatility in plummeting bourses? At the depths of…
Tag: Volatility
Option Pricing And Better Trades
Option pricing is a mystery to most traders. They struggle to comprehend terms like implied and historical volatility or intrinsic and time value, or the “Greeks” (Delta, vega, theta, gamma, rho…). These terms are intimidating and my experience suggests that at least half the folks you hear talking about them do not really understand very much about them. It is…
Vix And The Psychology Of Markets
We know that greed and fear rule the markets. But did you know that when investors gets too greedy, markets usually fall, and when investors are overcome with fear, markets usually rise. So how can when we monitor investors emotions and take advantage of investors emotional extremes? Welcome to the world of investor sentiment analysis. Investor psychology has been analysed…
Volatility And Day Trading
Volatility Is The Key To Day Trading Successful day trading requires the ability to spot trends and patterns quickly, and act on them. It’s tough to know which stocks to watch, but once you have learned the skill, you will be ahead of the game. You should maintain a “watch list”. These are a cross section of stocks that you…
The Benefits Of Trading The Forex Market
Historically, the FX market was available most to major banks, multinational corporations and other participants who traded in large transaction sizes and volumes. Small-scale traders including individuals like you and I, had little access to this market for such a long time. Now with the advent of the Internet and technology, FX trading is becoming an increasingly popular investment alternative…