Decoding Alpha: Where Data Science Meets Wall Street.
A tick chart draws a new bar after a set number of trades. A time-based chart creates a new bar after every period, such as one hour. Tick charts offer many benefits over time-based charts for higher-frequency traders. This post …
Stock market circuit breakers, also known as trading curbs, are temporary measures that automatically halt trading when dramatic stock market declines occur. Circuit breaker levels halt trading when the S&P 500 index drops 7%, 13%, and 20% from the previous …
Dow Theory is a financial theory created by Charles Dow that states the stock market moves in predictable trends. Dow Theory includes six philosophical tenants and some elements of sector rotation. Traders often use Dow Theory in conjunction with technical …
Support and resistance lines are technical analysis tools predicting where an asset’s price will tend to stop and reverse. Without breaking through, multiple touches of the resistance area, often accompanied by high volume, denote these levels. The concept of support …
The relative strength index (RSI) is a technical analysis momentum oscillator that indicates potentially overbought and oversold conditions based on an asset’s recent closing price changes over a trading period. The RSI oscillates between zero and 100 and is considered …
Money. Power. Greed. Corruption. These are some of the core elements that often appear in movies about the stock market. It’s no surprise that films about the stock market – the professions, people, and events around making (and losing) astronomical …
An investment mandate is a set of instructions for how an investment manager may invest money for a particular fund. A mandate may specify acceptable investments, position risk constraints, other restrictions, and an appropriate benchmark. If you plan to use …
Open interest is the number of unsettled outstanding derivative contracts. Each contract must have a buyer and a seller. It is considered open when a buyer or seller initiates a contract, but a counterparty does not close it by taking …
Trend following or trend trading is a systematic trading style that attempts to profit from trends in the market. Trend following buys when an asset’s price rises and goes short when an asset’s price falls. Trend following is ideal for …
A lease is a contract where a Lessor (owner) permits a Lesse (user) to utilize an asset for a particular period. Financing and operating leases are essentially a form of financing and need to be considered as such when valuing …
