Gap Risk
Gap risk refers to the possibility of an asset’s price “gapping” beyond a pre-set stop-loss order, leading to a larger-than-intended loss.
Gapping
Gapping occurs when an asset’s price opens significantly higher or lower than its previous close due to overnight news.
Lagging Indicators
Lagging indicators change after the economy has already begun to follow a particular trend or pattern.
Leading Indicators
Leading indicators are forward-looking metrics that tend to change before the broader economy begins to follow a particular trend.
Loss Aversion
Humans generally feel the pain of a loss more intensely than the pleasure of an equivalent gain.
Market Gaps
Market gaps occur when prices “gap” significantly between market close and open, or during periods of high news impact, meaning stop-loss orders may not be executed at the desired price, leading to larger-than-expected losses.
Momentum Investing
Momentum investing involves identifying assets that have shown strong recent performance and are likely to continue their upward trajectory.
Open Range Breakout (Orb)
The Open Range Breakout strategy involves waiting for the price to move decisively above the opening range high or below the opening range low.
Opening Range
The opening range is typically established by marking the highest and lowest prices reached within a specific timeframe immediately following the market open.
Position Trading
Position trading strategy is a longer-term approach where traders hold positions for weeks, months, or even years, largely ignoring minor price fluctuations.