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Lagging indicators use past price data to provide entry and exit signals, while leading indicators provide traders with an indication of future price movements, while also using past price data. When faced with the dilemma of leading vs lagging indicators, which should traders choose? The answer to this question ultimately comes down to individual preference after understanding the advantages and limitations of each. Lagging indictors Lagging indicators are tools used by traders to analyse the market using an average of previous price action data. Lagging indicators, as the name implies, lag the market. This entails that traders can witness a move before the indicator confirms it — meaning that the trader could lose out on a number of pips at the start of the move. Many consider this as a necessary cost in order to confirm to see if the move gathers momentum. Others view this as a lost opportunity as traders forgo getting into a trade at the very start of a move. L...

Financial risk is a term that can apply to businesses, government units, the financial marketplace as a whole, and the individual. This risk is the risk or likelihood that shareholders, stakeholders, or other fiscal stakeholders will lose money. There are numerous specific risk factors that can be considered as a fiscal risk. Any risk is a threat that produces damaging or unwanted results. Some more shared and diverse financial risks include credit risk, liquidity risk, and operational risk. The Basics of Financial Risk Financial risk is a type of risk that can affect the loss of capital to interested parties. For governments, this can mean they are incapable to regulate economic policy and default on bonds or additional debt issues. Corporations also face the likelihood of default on debt they undertake but may also experience failure in an undertaking the causes a financial weight on the business. Individuals face financial risk when they make conclusions that m...

The security of personal data, especially that which is stored online, is a human right. It has failed to evolve and actually been deteriorating in recent years. Blockchain technology has the potential to entirely change this. All of our data is stored online. We concede some of our most private information to the platforms that we use on a daily basis and we are often unaware which of our personal data is collected. Many users still conceal some of their most valuable data behind the shockingly weak combination of a username and password, with over half of users openly admitting they use the same password for all of their logins. Is Blockchain Secure? Yes, blockchain is innately secure. It utilises powerful  cryptography to give individuals ownership of an address and the cryptoassets associated with it, through a combination of public and private keys, made up of combinations of random numbers and letter. This solves the issue of stolen identity as ...

A one-cancels-the-other order (OCO) is a pair of orders stipulating that if one order executes, then the other order is automatically cancelled. An OCO order combines a stop order with a limit order on an automated trading platform. When either the stop or limit price is reached and the order executed, the other order automatically gets cancelled. Experienced traders use OCO orders to mitigate risk and to enter the market. Basics of a One-Cancels-the-Other Order - (OCO) Traders can use OCO orders to trade retracements and breakouts. If a trader wanted to trade a break above resistance or below support, they could place an OCO order that uses a buy stop and sell stop to enter the market. For example, if a stock is trading in a range between $20 and $22, a trader could place an OCO order with a buy stop just above $22 and a sell stop just below $20. Once the price breaks above resistance or below support, a trade is executed and t...

A trendline is a line drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trendlines are a visual representation of support and resistance in any time frame. They show direction and speed of price, and also describe patterns during periods of price contraction. The trendline is among the most important tools used by technical analysts. Instead of looking at past business performance or other fundamentals, technical analysts look for trends in price action. A trendline helps technical analysts determine the current direction in market prices. Technical analysts believe the trend is your friend, and identifying this trend is the first step in the process of making a good trade. To create a trendline, an analyst must have at least two points on a price chart. Some analysts like to use different time frames such as one minute or five minutes. Others look at daily charts or weekly charts. Some analysts put aside time altogether...

An options contract is an agreement between two parties to facilitate a potential transaction on the underlying security at a preset price, referred to as the strike price, prior to the expiration date. The two types of contracts are put and call options, both of which can be purchased to speculate on the direction of stocks or stock indices, or sold to generate income. For stock options, a single contract covers 100 shares of the underlying stock. The Basics of an Options Contract In general, call options can be purchased as a leveraged bet on the appreciation of a stock or index, while put options are purchased to profit from price declines. The buyer of a call option has the right but not the obligation to buy the number of shares covered in the contract at the strike price. Put buyers have the right but not the obligation to sell shares at the strike price in the contract. Option sellers, on the other hand, are obligated to transact their side of the...

To understand the functions of a Perpetual Future Contract it is important to first fully understand the meaning of a future contract . A futures contract is an arrangement to buy or sell a commodity, currency, or another tool at a prearranged price at a definite time in the future. Unlike an old-fashioned spot market, in a futures market, the trades are not ‘settled’ promptly. Instead, two counterparties will trade a contract, that defines the clearance at a future date. Also, a futures market doesn’t allow users to unswervingly purchase or sell the product or digital asset. Instead, they are trading a contract representation of those, and the actual trading of assets (or cash) will happen in the future - when the contract is exercised. As a simple example, consider the case of a  futures contract  of a physical commodity, like wheat, or gold. In some traditional futures markets, these contracts are marked for delivery, meaning that there is a physical delivery of ...

This article is a continuation of the introduction blog written on the Stochastic RSI . The StochRSI was developed by Tushar S. Chande and Stanley Kroll and comprehensive in their book "The New Technical Trader," first published in 1994. While technical pointers already existed to show overbought and oversold levels, the two developed StochRSI to improve sensitivity and generate a greater number of signals than traditional pointers could do. The StochRSI deems something to be oversold when the value drops below 0.20, meaning the RSI value is trading at the lower end of its predefined range, and that the short-term direction of the underlying security may be nearing a low a possible move higher. Conversely, a reading above 0.80 suggests the RSI may be reaching extreme highs and could be used to signal a pullback in the underlying security. Along with identifying overbought/oversold conditions, the StochRSI can be used to identify short-term trends by looking...

The Stochastic RSI (StochRSI) is an indicator used in technical analysis that varies between zero and one (or zero and 100 on some charting platforms) and is shaped by applying the Stochastic oscillator formula to a set of relative strength index (RSI) values rather than to typical price data. Using RSI values within the Stochastic formula gives traders an idea of whether the current RSI value is overbought or oversold. To put it simply, Stochastics and RSI are based off of price, Stochastic RSI originates its values from the Relative Strength Index (RSI); it is essentially the Stochastic indicator applied to the RSI indicator. The StochRSI oscillator was developed to take benefit of both motion indicators in order to create a more delicate indicator that is tuned to a specific security's past performance rather than a comprehensive analysis of price change. The Formulas For the Stochastic RSI (StochRSI) are: StochRSI = RSI − min [ RSI ] ​  ...

MACD is an abbreviation for  M oving  A verage  C onvergence  D ivergence. This tool is used to recognize moving averages that are representing a new movement, whether it’s bullish or bearish. Our utmost significance in trading is being able to find a trend, because that is where the most money is made. With an MACD chart, you will usually see three numbers that are used for its settings. ·        The first is the number of periods that is used to calculate the faster-moving average. ·        The second is the number of periods that is used in the slower moving average. ·        And the third is the number of bars that is used to calculate the moving average of the difference between the faster and slower moving averages. How to Trade Using MACD Because there are two moving averages with dissimilar “speeds”, the faster one will no...