Concepts
One idea at a time, explained in plain words and shown at work in a real week.
287 concepts, A to Z
Maximum adverse excursionHow far did a position move against its holder during the week, before the final result was known?Maximum favourable excursionHow much profit did a position show at its best point before it was finally closed?Mean reversionWhy do prices that fall far below their recent level sometimes snap back quickly, and what does that tell a trader?Median and meanWhen does the average return misrepresent the typical week, and what does the median show instead?Model riskWhat happens when the assumptions a risk model rests on are wrong, and how do the resulting losses show up?MomentumWhat does it mean when a market's weekly returns keep coming in with the same sign?Moving averageWhat is a moving average, and how does it separate a trend from the noise of daily prices?Moving-average crossoverWhat does it mean when a short-term price average crosses a long-term one, and why does the signal arrive late?Multiple testingWhy does the best-performing rule out of many tested rules usually look better than it really is?Narrative fallacyWhy do we invent causes for market moves that the data itself cannot confirm?Negative fundingWhy would traders holding short positions pay the traders holding long ones, and what does that payment reveal about the market?Normal distributionWhat does the bell curve assume about market returns, and where do real markets depart from that assumption?Null hypothesisWhat do we assume when a market looks ordinary, and how do we decide that something unusual has actually happened?Open interestHow many contracts are still open in a market, and what does that tell you that trading volume cannot?Opening extremeWhat does it mean when a week's high or low is set within its first hours, and how should the rest of the week be read?Opportunity costWhat does choosing one use of capital actually give up, and how do you measure it?OptionalityWhy is keeping the ability to act later sometimes worth more than committing to a position right now?Order bookWhat is an order book, and why can trade records alone never show it?Out-of-sample testHow do you check whether a trading rule works, rather than merely having been fitted to the past?OutlierWhat makes a value an outlier, and when should a researcher keep it rather than throw it away?Overbought and oversoldWhat do traders mean when they call a market overbought or oversold, and what do those labels not tell you?OverconfidenceWhy do traders trust their forecasts more than their actual track record would justify?OverfittingHow can a trading rule that looked perfect on past data fail as soon as the market writes new data?Pair ratioWhat does dividing one asset's price by another's reveal that neither price shows on its own?Panic sellingWhat does it mean when people sell mainly to make a painful feeling stop, not because of a plan?Percentage and point movesWhy does the same dollar move in BTC mean different things depending on its price level?Percentile rankHow do you place one unusual week against every week that came before it?Perpetual futuresWhat is a futures contract that never expires, and what keeps its price tied to the underlying market?Point estimate and rangeWhen data is noisy, why should a forecast be given as a range instead of one number?Point-in-time dataHow do you judge a week honestly, using only the information that existed by the end of it?
Research notes on real market weeks, not investment advice. Sources: Binance spot BTCUSDT and ETHUSDT 1-hour candles and USD-M perpetual funding rates; weekly figures computed by WSTiger.