Understanding stock market regulatory and compliance definitions is essential for anyone looking to trade confidently and legally. This page provides clear, concise explanations of the most important regulatory and compliance concepts you need to know. From Anti-Money Laundering (AML) requirements to insider trading regulations, KYC procedures, and market manipulation rules, we've got you...
Understanding trading psychology definitions helpful if you want to reduce the impact of psychology on your trading. The mental and emotional aspects of trading can significantly influence decision-making and ultimately determine your success or failure. I have found that half the battle is awareness of the psychological issues. This page provides simple, beginner-friendly explanations of the...
In my stock market update last week we discussed the two likely scenarios for the US markets in the near term (Continued rally OR Another leg down). This week started strong, but with the US Political $&!% show continuing to rattle the markets the US markets fell back towards the recent lows. I truly can't comprehend why Trump feels it is ok to attack the sovereignty of other nations,...
Salience bias is a cognitive shortcut where the most noticeable or emotionally striking information disproportionately influences decision-making. Imagine watching the news about a plane crash. Even though air travel is statistically safe, the vivid imagery can make you irrationally fear flying. This aligns with principles in behavioral economics, where individuals react more to prominent...
The Bull/Bear Ratio, also known as the Bull-Bear Spread, is a market sentiment trading indicator that helps traders and investment advisors gauge the overall attitude of investors toward the stock market. This indicator is published weekly by Investor Intelligence, a financial data provider that tracks market psychology through a poll of investment advisors. The ratio is a measure of market...
Dear Trader, If you’re reading this, chances are you’ve purchased a stock trading course before - or at least thought about it seriously. But something’s not quite clicking. Maybe you’ve followed courses that promised "quick profits" only to find yourself second-guessing every trade. Maybe you've been glued to the charts, making impulsive decisions, or stuck in analysis paralysis. The truth?...
Learning how to start stock trading can be one of the most rewarding ways to build personal wealth. However, the journey from curious beginner to confident trader is often filled with potential missteps, conflicting advice, and overwhelming information. Without a clear, structured system in place, it’s easy to get lost in the noise and end up making costly mistakes. But with the right guidance...
The Elder's Force Index (EFI) is a widely used trading indicator developed by Alexander Elder to measure buying and selling pressure in the market. By combining price movement with volume, this technical analysis tool helps traders determine the strength of a trend and identify potential trading opportunities. Since the index is a valuable technical indicator, it provides insights into future...
Let’s get real for a minute. You’ve got your trading strategy, your backtest results look solid, your rules are locked in. On paper, everything checks out. But then, out of nowhere, you hesitate on a perfectly valid trade. You skip an entry. You downsize a position. You start second-guessing your system. Sound familiar? That’s not a strategy issue. That’s a mental drawdown—and it can quietly...
Normalcy bias is a cognitive trap that convinces people everything will remain the same, even when clear signs suggest otherwise. This bias occurs because individuals tend to underestimate the likelihood of a disaster. It’s why some people ignore evacuation warnings during natural disasters, as they can’t imagine the status quo changing. This psychological blind spot is particularly treacherous...
Have you ever played the lottery, knowing the odds were stacked against you, but you bought a ticket anyway because the jackpot was too tempting? That’s the neglect of cognitive bias at work: a fallacy where we overlook statistical likelihoods when making decisions. This is an example of how a heuristic can lead to poor decision-making—a common theme explored in trading psychology. Every day,...
Have you ever noticed how you suddenly see a specific car everywhere after thinking about buying one? That’s selective perception: a cognitive bias where your mind filters information to match your beliefs or desires—an effect deeply explored in trading psychology. In the noise and chaos of financial markets, our minds desperately seek patterns that confirm what we already think we know. A...