Investor Glossary-whipsawInvestor Glossary-whipsawInvestor Glossary-whipsawInvestor Glossary-whipsawInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Whipsaw

The HTML to link to this page
 

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...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: 401a, real GDP, inflation, command economy, in escrow, cancelled check, ex-dividend, 1035 exchange, required rate of return, Key Rate Duration, stock market close, margin rate, average price per share, current ratio, deferred tax, Zero Cost Collar, stock split, EBITDA, implied volatility, LIBOR, balance sheet, risk management, FTSE, deferred revenue, per diem, labor relations, retained earnings, debt service coverage, phantom income, ex-dividend date, liquidity ratio, FICO score, 1031 exchange, annual return, option premium, covered put, 144a, wholly-owned subsidiary, irrevocable trust, APR, reverse mortgage, minority interest, open position, VIX, quality assurance, class C shares, dividends payable, limit order, diluted share


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use