   
|
|
Whipsaw
|
| FYI - For 2011, Dow up, Dogs of the Dow up more (double digits) |
| |
Whipsaw refers to the rapid movement of stock prices, either up or down, in a volatile market. In other words, when a share price moves in one direction but abruptly reverses, it is known as a whipsaw. Some investors jump on the stock before it has reversed and caused the whipsaw. Thus a whipsaw can cause an investor to lose money. The investor loses money from a whipsaw by buying a stock right before the price falls or by selling a stock just before the price rises. Whipsaw is therefore related to "chasing the market," when an investor seems to lag behind the market. A whipsaw is dangerous to traders because it throws up an initially misleading signal to buy or sell. Because of the whipsaw condition, a volatile market can punish active traders.
Rate this whipsaw definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: option premium, deferred revenue, annual return, per diem, inflation, 144a, Zero Cost Collar, current ratio, 1035 exchange, labor relations, retained earnings, 401a, liquidity ratio, irrevocable trust, Key Rate Duration, risk management, debt service coverage, balance sheet, deferred tax, quality assurance, dividends payable, class C shares, ex-dividend date, stock split, ex-dividend, 1031 exchange, command economy, reverse mortgage, stock market close, EBITDA, margin rate, LIBOR, required rate of return, FICO score, VIX, limit order, APR, minority interest, open position, implied volatility, average price per share, phantom income, FTSE, real GDP, diluted share, wholly-owned subsidiary, in escrow, cancelled check, covered put
|
|
| |