Concepts
One idea at a time, explained in plain words and shown at work in a real week.
287 concepts, A to Z
Risk of ruinWhat is the chance that a run of losses wipes out a trading account before the edge can show up?Risk parityWhy do risk parity portfolios hold more of a quiet asset than a wild one, and what happens when the wild one moves anyway?Risk premiumWhat extra return do investors demand simply for holding something risky, and how can you see it in prices?Risk-on and risk-offWhat does it mean when markets rise or fall together on shifts in appetite for risk?Robustness checkHow can you tell whether a market finding is real, or just an accident of the method used to measure it?Round-number levelsWhy do traders watch prices that end in zeroes, and what does the data actually prove about them?Sample sizeHow many past weeks does a comparison actually rest on, and what does a thin sample hide?Sampling frequencyWhy can hourly, daily and weekly data describe the same market week so differently?Scenario analysisWhy do traders plan for several possible paths through a week instead of betting on one forecast?SeasonalityWhy do traders look for calendar patterns in prices, and why can a few years of data never prove one exists?Second-order effectsWhy does the damage from a market fall often extend past the initial cause, through consequences of the first consequence?Selection biasHow does picking which examples to show quietly decide the conclusion before any analysis begins?Sensitivity analysisHow do you test whether a conclusion survives when one input behind it is changed?SettlementWhen is a crypto trade finally complete, and why does that happen so much faster than in traditional markets?Sharpe ratioHow do you judge whether a return was worth the price swings you had to sit through?Short sellingHow can a trader make money when an asset falls, by selling something they do not yet own?Short squeezeWhy does a market sometimes rise fastest when betting against it was most comfortable and best paid?Signal and noiseHow can you tell whether a price move carries real information or is just ordinary randomness?Signal decayWhy does a trading pattern stop working once many traders notice and use it?Simple and log returnsWhy do a gain and a loss of similar percentage size not cancel out?SkewnessDo a market's biggest moves tend to land on the upside or the downside, and how can you tell?SlippageWhen a stop order fires in a fast hour, why can the filled price differ from the price the stop was set at?Sortino ratioHow do you judge a return against only the downside moves, ignoring the upside volatility that a position can tolerate?Speculative bubbleWhat makes a price a bubble, and why is that judgment so hard to make while prices keep rising?Spot marketWhat does it mean to buy the asset itself for immediate settlement, rather than a contract about its future price?Square-root-of-time ruleHow can you scale a week's volatility up to a year, and when does that shortcut mislead?Stablecoin quoteWhy are most crypto prices quoted in a dollar-pegged token, and what does that choice hide?StationarityCan a market's recent statistical behaviour be trusted to hold, or does the series change its own rules over time?Statistical significanceIs a market result big enough to count as real, or could ordinary chance have produced it?Stop cascadeWhy does a price fall sometimes accelerate as it passes levels where many stop-loss orders sit?
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.