, whereas in the past traders hadno such tools without paying for them, often at the rate of hundreds ofdollars per year.
Assessing Risk and OpportunityIn the modern world of lightning-fast trading, easy access to research andcharting tools, and low-cost transaction fees, swing trading makes goodsense. It would not have been practical in the past, however. Today manytraders are beginning to realize that they do not have to structure an investment strategy around a stockbroker, the cost of trading, or difficultyin locating research. For example, you can find an annual or quarterly report this instant for any listed company. You do not have to ask yourstockbroker to request a copy and then wait for two weeks until the mailarrives.This ultra-convenience makes it easier than ever to broaden yourinvestment opportunities; it also expands the related risks that go with
Key PointYou can still send away for a hard copy annual report. But whyshould you? These documents can be downloaded, studied andprinted online at a moment’s notice.
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any strategy. So it is just as important as ever to assess risk as part of yourexploration of a strategy. This includes swing trading and, of course, themethods you employ and their risks. Some aspects of swing trading demanding risk evaluation include:1. The overall strategy. How much swing trading should you do?How much capital should you place at risk and should you belong or short on every stock at the same time? Even investorswho subscribe to the buy-and-hold approach know that theyneed to diversify and the question should be raised for swingtrading as well. Even the true believer in swing trading may discover some wisdom in diversifying a portfolio by strategy, meaning that some capital may belong in long-term stocks, mutualfunds, or non-stock investments.2. Short-term long position costs and risks. The transaction cost of anystrategy is always an issue and there are costs involved in bothbuying and selling. This cost has to be factored in to the strategy.Using options if far cheaper than buying and selling round lots ofstock, and the use of multiple option contracts is extremely lowin comparison to stock trades. Depending on your percentage ofprofitable trades, you should be aware of the transaction cost aspart of your overall evaluation.3. Short selling stock. Most people will agree that selling short is ahigh-risk approach to the market. Those investors not willing totake this risk have to limit their swing trading to only the buysetup, so that half of all opportunities are lost. This risk may beacceptable to some people, especially if they place a lot of faith intheir setup pattern recognition. But this risk cannot be ignored.4. Option risks. The options market is risky for several reasons. Theterminology is strange and complex; time is always an issue; andthe complexity of option valuation can deceive you. If you emphasize trading in short-term, in-the-money options with little orno time value, you can minimize the risk. If you buy puts insteadof shorting stock, you eliminate the short sale risk. However, “experience risk” is also a factor with options. You need to understand the market thoroughly before executing actual trades.
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Key PointProfit opportunity and risk are two aspects to the same phenomenon. Recognizing this inseparable fact makes you a smart investor—and one less likely to lose money on unacceptablelevels of risk.
5. Diversification risks. All investors and traders need to understandthe many forms of diversification, and to identify the degree theyrequire in their own portfolio. For example, you can diversify inthe stocks you use for swing trading, the use of many differentsectors within the market, and even in combinations of buy setups and sell setups. However, also be aware of the potential fordiversification between swing trading and other strategies, such aslong-term buy-and-hold, option speculation, covered call writingagainst long stocks in your portfolio, and the use of exchangetraded funds.The comparison between opportunity and risk cannot be undertaken separately. It is a common mistake. Some people like to focus onthe profit potential of a particular strategy but forget to also consider thedirectly corresponding risk. The two cannot be looked at as different aspects of an investment decision; they are two aspects of the same attribute. The profit potential and risk to any strategy are inseparable. Thisis a fact worth remembering, because it is all too easy to focus only onthe optimistic side of things.Risk may also be viewed as a means for checking yourself. On paper, many strategies appear both exciting and profitable. It is easy to convince yourself that you have a “sure thing.” In swing trading, you mayobserve the consistency of past price behavior follow a narrow range dayor engulfing line and become convinced that these setups always work.However, that is not the case. They work most of the time, but it remainsquite possible that stock price will defy the signals and move in the“wrong” direction. This is defined as a direction that produces a loss instead of a profit—a point to always keep in mind.
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Diversification by Risk ProfileOf the many varieties of diversification, one of the most important isbased on your personal risk profile. Any discussion of risk is based on abroad assumption that each individual possesses a singular, specific risklevel and all investments in the portfolio have to conform to that profile.In practice, this is rarely true. Most people are more complex than thatand cannot be defined so narrowly.For example, you may assume a highly conservative stance regarding your family’s home and savings accounts, but a higher risk stance foryour stock portfolio. Your home is insured and maintained, and youmight even resist the temptation to mortgage it excessively, being awareof cash flow and equity versus debt levels. Your savings account may yieldrelatively low rates but it is in an insured account. These are very conservative forms of investment.Your stock portfolio may be set up with a somewhat more aggressivestance. You might be willing to take some degree of risk hoping to beatmarket averages. You may buy some stocks for long-term hold, put somefunds into mutual funds, and use the remainder of your funds in optionsor speculation in stocks. This is where swing trading comes into play; youmight divide your overall portfolio into many different segments andidentify varying levels of risk appropriate to each. Your “safety net” investments (home and savings) should be very conservative; your stock portfolio may be somewhat risky; and some portion of your equity may bedevoted to swing trading, using either stock positions or long options.As long as you define each of these segments, and control the levelsof funds placed into each, you will have diversified not only by the typeof investment (real estate, money market, and equity) but also by riskprofile. This strategy of managing your portfolio, called asset allocation,is not always described in terms of personal risk. It is more commonly
Key PointYou do not have to accept a single definition of “appropriate”risks and then invest only in products meeting that definition.You are likely to find that you can involve yourself with manydifferent risk levels.
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discussed in terms of diversifying by markets. It isalso possible to diversify among markets while stillasset allocationconforming to a narrowly defined risk level. Thea method of manpreceding example demonstrates how asset allocaaging a portfoliotion can be used to enrich your own risk diversifiby dividing fundsamong severalcation as well.different markets;Asset allocation is most often described inan advancedtechnique forterms of percentages. And while every investor isdiversifying adifferent, some market observers have attempted toportfolio.assign a universal percentage recommendationbased on current economic conditions. In this variation, the assumption is that every investor should react in the same wayto changing economic conditions. It makes more sense, however, to viewasset allocation as a risk-based form of variation within a portfolio. Itmight not be appropriate, for example, to devote all of your investmentassets to swing trading. For example, you may have diversified your portfolio for college education, retirement, and current income. The ultimategoals of each of these segments to your portfolio dictate the appropriatelevels of risk; with this in mind, swing trading may be appropriate butshould be determined by the conservatism of the investment goal itself.No one individual can be accurately described as being a “conservative” investor or a “speculator” in all instances. The actual determinationof the products and risks you select is going to be based on many factors,including:1. Your understanding of a specific market. If you thoroughly understand a market you are going to be more likely to take part in it.Some markets frighten people away because they are complex;options, for example, are not as high-risk as they are perceived bymany people. But the definitions and unique characteristics of
Key PointContrary to what the financial planning industry has claimed foryears, “risk” is not simply unique to a person or family. It shouldvary based on the goals within the portfolio, and that oftenmeans that you will have several different appropriate risk levels.
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options make them especially troubling to anyone not familiarwith how they work. The more you understand how a marketworks, the better suited you are to identifying ways that you canmake use of the products.2. Preferred risk levels and ability to place funds at risk. People do tendto invest money in specific ways. Some are highly conservativeand, as a general rule, will be willing to accept lower than averagereturns to avoid risk. Others are more likely to speculate, seekingexceptionally high returns in exchange for much greater risks.Most people find themselves somewhere between these extremes.3. Current income and asset levels. Your risk profile changes as yourincome increases and as your overall net worth grows or shrinks.So a new career or job, divorce, or other significant economicchanges in your life are also going to directly affect your risk profile. It is important to be aware of these changes and to be able tochange your portfolio to match your actual situation.4. Apprehension level concerning the economic future. As perceptionsabout economic and political conditions change, so will your riskprofile. Even if you are not affected by changing interest rates oroil prices, the market as a whole reacts to these matters, and thatmeans your ability to profit in a specific market or strategy are affected as well.
A Place for Swing TradingEven in the most conservative portfolio, swing trading can play a role. Forexample, every investor focusing on a buy-and-hold strategy needs to decide how to deal with sudden price changes, both upward and downward.Swing trading solves this dilemma without violating the long-term goal.Key PointSwing trading does not have to be used only as an alternative tobuy-and-hold. It can also provide better management of a permanent portfolio, in several ways.
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In the typical scenario, you buy stock with the idea that you are going to keep shares indefinitely. The plan includes purchasing more sharesif and when you can afford it, reinvesting dividends, and seeking stockswith similar attributes to expand the portfolio. And then one of threethings occurs and the whole plan falls apart. These events are:1. The stock price rises. When the price rises, even the most conservative investor is tempted to take profits; and many do just that.So now you have a different problem: You have gotten your profits but you now need to reinvest funds, and chances are all of thestocks you have been following are up at the same time.The danger in profit-taking is damaging to your long-term goalsbecause it results in selling the strongest stocks. As a result, youare likely to end up with a portfolio full of stocks that have notrisen in price or that have fallen in price. The goal of accumulating profits has not occurred.2. The stock price falls. Another problem occurs when the price falls.It is a common reaction to want to cut losses and sell the stock.So again, the long-term plan falls apart and is replaced with animmediate gut reaction. Investors who consider themselves oriented toward long-term hold strategies should carefully pickstocks and then keep them. But in the emotional turmoil of theday-to-day market, that advice is not as easy to follow.3. Bad news or rumor brings doubt into the equation. The marketthrives on rumors. They are continually going around and manyprove to not be true. Whether news is obtained from wire services or chat rooms, a lot of information is of questionable value.Even the reliable news leads to an over-reaction. For example, acompany whose profits exceed previous years may see its stock godown because the outcome is one cent lower than analysts’ predictions. The unending swell of news, both true and false, andthe tendency for investors to rely so heavily on unreliable sources,leads to great chaos.The usual market reaction to these events is greed, fear and uncertainty. These are the three emotions that drive the market and define theopportunities swing traders are able to exploit. Because the price trendsare likely to evolve over a two- to five-day period, swing trading matches
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SWING TRADING IN YOUR INVESTMENT PORTFOLIOKey PointRemember, the market is dominated by three emotions: greed,fear and uncertainty. You can use swing trading to respond tothose emotions rather than falling into the common trap ofover-reacting.
these common cyclical price movements. The wise swing trader may alsobe a long-term investor, but recognizing the role of price swings is important, if only to remind long-term investors that they should not react tooemotionally to short-term changes. To do so contradicts the advantage toswing trading.Long-term investors are tempted to take profits when prices rise, orto cut losses when prices fall. It makes more sense to stay with the longterm plan and leave the stock in place; and to employ swing trading contrary to the usual tendencies based on emotion. When prices riseunexpectedly, look for a sell setup and use long puts or covered calls toprovide downside protection (and, through swing trading, to take profitswithout selling stock). When prices fall, remain calm and look for buysetups, and then use long calls in anticipation of an offsetting uptrend.The point to be made here is that the long-term approach involvinga buy-and-hold strategy does not necessarily contradict how swing trading works. In many respects, using swing trading to augment a long-terminvestment strategy is both wise and profitable. It helps avoid the temptation to take profits or to sell to cut losses. It protects positions and creates short-term income while leaving equity positions in place. Whenyou employ covered calls at sell setups, you create immediate incomefrom the sold option, which is a form of profit-taking—especially if thestock’s price does retreat. You will be able to close the call at a profit, offsetting a reduced stock price. This also protects your equity in the longstock position.You may also employ variations to swing trading. The day traderhas the goal of moving in and out of positions within a single tradingday, often in distrust of the gap between trading cycles and at times as away to get around margin requirements. However, day traders executinghigh volume may be required to deposit $25,000 as pattern day traders,so the system does not get around the margin rules effectively.
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Key PointSwing traders are by definition focused on a two- to five-daywindow. However, this can be varied depending on personalpreferences and circumstances.
Swing trading can also be modified to respondto specific changes between one day’s closing priceintradayand the next day’s opening. Price gaps and reversalstraderoften signal a change in the established trend—anda swing trader orthey may signal swing traders to reexamine theirday trader whomay modify posipositions and, perhaps, execute a trade respondingtions based onto the price trend. So an intraday trader is an indiprice gaps orreversals occurvidual who is acting as a day trader or swing traderring from onebut paying extra attention to day-to-day pricetrading day to thechanges, notably gaps.next.Another variation on swing trading involvesan accelerated period. Instead of observing a twoto five-day trend and tracking daily charts, the mimicro tradercro trader watches 5-minute and 15-minute chartsa trader wholooks for tradingas well as 20-period and 200-period moving aversetup patternsages. A moving average is usually described inwithin a singleterms of days, but micro traders involve periods ofday often involving the study oftime increments. So a 20-period moving averagefive-minute andconsists of 20 sequential five-minute periods; and a15-minute priceperiods.200-period moving average would involve 200 sequential five-minute periods.The micro trader also pays attention to specific reversal signals occurring at exact trading times during the day. These traders observe a tendency for the typical day to exhibit a morning and afternoon trend in thesame direction, with a middle period relatively flat and with low volume.These trends signal how and when to look for buy or sell setup signals ingreatly accelerated time. Rather than waiting up to five days, the microtrader may make trades within five five-minute increments.You may discover your own variations on swing trading as youstudy and practice the many techniques available. The valuable free online tools that make swing trading both practical and affordable can also
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SWING TRADING IN YOUR INVESTMENT PORTFOLIOKey PointEverything has changed in the market over the past two or threedecades—including the reality that investors are either smarteror should be smarter through access to so many market tools.
serve as educational tools as you master the candlestick chart, moving averages, and other features. In the past, swing trading was not practical because the average investor had no direct access to the markets. Today,your access is fast and much better than access for the stockbroker of thepast. Investor knowledge is also far more sophisticated today than everbefore.The exceptional opportunities for swing trading have made themarkets not only accessible, but easier to interpret. Only a few shortdecades ago, insiders held market facts close to the vest and promoted anaura of mystery, and most people trusted in the system. Today, you—theindividual investor—are the system, and now you are able to create andcontrol your own profits.
Glossary
Regulation T a Federal Reserve Board rule establishing and governing rules for margin borrowing in brokerage accounts.against the box a strategy for going short when the trader owns shares. The short saleis made against the shares in the portfolio rather than borrowed from another investor.ascending channel a channel with a rising trading range over time. Short-termswings in price occur, but the longer-term price trend is upward.asset allocation a method of managing a portfolio by dividing funds among severaldifferent markets; an advanced technique for diversifying a portfolio.at the money a situation where an option’s strike price is identical to the stock’s current market value.bearish engulfing line a candlestick engulfing line—one extending above and belowthe previous trading day’s main body—with a black main body.black candlestick a candlestick with a black real body showing that the stock moveddown on the day.blocks large trades of stock executed by institutional investors in most cases, usuallydefined as 10,000 or more shares or stock with current value of $200,000 or more.breakaway gap a gap involving price movement into new territory beyond the established trading range.breakout a pattern in which price moves above resistance or below support and establishes a new trend and, eventually, a new trading range.broadening formations chart patterns showing widening trading range for a stock,developing over time and providing specific signals for swing traders.broker call rate the rate many brokers charge clients for borrowing funds on margin;the rate a firm charges is normally found on the brokerage website.bullish engulfing line a candlestick engulfing line—one extending above and belowthe previous trading day’s main body—with a white main body.buy stop a type of order that generates an automate buy if and when the stock movesto or above a specified price.buy to close an order that closes a short investment, which involves buying the security and number of shares to cancel out the open position.
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buy to open the first order in a long position, which instructs the broker to purchasethe indicated security and number of shares or contracts.buying power the margin allowance a brokerage firm provides to a pattern daytrader, which is a multiple of available equity balance in the portfolio.call an option granting its owner the right (but not the requirement) to buy 100shares of a specific stock at a fixed price per share.candlestick a chart formation showing each day’s trading range; high and low price;opening and closing price; and the direction the price moved for the day. A white (orclear) candlestick reveals that the price closed higher than its open; and a black candlestick reflects a lower close for the day.capitalization the total funding of an operation, include equity (stock) and debt(bonds and long-term loans).cash flow the cash available from operations to pay current and long-term expensesand liabilities; fund business expansion; and pay dividends.channel the overall direction of a stock’s price movement; the trend, which may beflat, upward, or downward over many months.chartists technical analysts who rely primarily on recognition of specific price patterns and short-term trends to predict and anticipate the next price direction in a stock’sprice.combination any option strategy involving the use of two or more options with dissimilar terms (call versus put, long versus short, strike price, or expiration date).common doji
another name for the doji, distinguished from other doji variations.
common gap another term for the gap, which distinguishes it from other forms ofexceptional gap chart patterns.concealing baby swallow a bullish candlestick pattern consisting of a series of fourblack real bodies in a declining trend, anticipating a reversal in coming trades.confirmation a signals that provides additional indication to another signal, that reinforces the indicated timing of a buy or sell move.consolidation a time when price is not moving upward or downward, but remainingwithin a narrow trading range; a market dominated by uncertainty.contingent liability a liability that might or might not materialize, and whose dollarvalue may not be known. Typically, outstanding lawsuits that have not been settled ordecided are the best-known form of such contingencies.contingent order any order to buy or sell based on specific price levels being reachedor passed. This type of order is used to protect existing profits or to avoid large losses inthe event of sudden price movement.core earnings the earnings as reported by a company, adjusted to remove all reportedearnings that are not part of a corporation’s “core” business, including nonrecurring revenues and net earnings.
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correction the description of a market in which prices are falling, when the emotionof fear dominates the market.cover a short seller’s action in buying to close, in which the exposed short position iscovered through cancellation.covered call an option strategy in which a call is sold, but the seller also owns 100shares of the stock. In the event the call is exercised, the 100 shares are used to satisfythe call.current yield the percentage paid in dividends, calculating by dividing declared dividends by current price of the stock.day order a type of order placed with a broker specifying that if it is not executed bythe end of the trading day, it automatically expires.day trade call a requirement that investors deposit funds to satisfy pattern day trading deposit requirements based on the volume of trades (four or more trades in thesame security within five trading days).day trader an individual who executes trades within a single day or over the shortestpossible time, often moving in and out of positions within a matter of hours and employing a high volume of trading activity.debt ratio the portion of capitalization represented by debt; to compute, divide longterm liabilities by total capitalization, expressing the result as a percentage.deliberation a bearish candlestick appearing within at uptrend, involving three consecutive white real bodies closing higher than the previous day, with the final day opening with a gap above the previous close.descending channelmonths.
a trading range moving downward in price over a period of
diversification one of several methods of spreading risk, involving exposure to different products, markets, or stocks. For corporations, diversification also refers to investment in dissimilar lines of business.dividend yield the profit earned from dividends paid by corporations, expressed as apercentage of the current price. For calculation purposes, the percentage should alwaysbe based on stock purchase price rather than current price.do not reduce (DNR) instructions attached to an order to keep a limit price evenwhen cash dividends occur. Without the DNR, the limit price is automatically reducedfor dividends earned.doji a candlestick with little or no real body, shaped like a cross. This demonstratesvery little change between opening and closing prices, with trading occurring above andbelow those levels.double bottom a price pattern testing support with a price increase in between. Because support holds up against this two-part test, the double bottom anticipates a subsequent increase in the price level.
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double top a price pattern in which resistance is tested twice with a pullback in between. As long as resistance holds up, price is expected to decline after the double top.Dow Theory a major technical school of thought, a belief that overall market movement is predictable based on primary and secondary trends and confirming signals. TheDow Theory states that short-term trends are not reliable for predicting long-term pricechanges.downtrend a movement in a stock’s price to the downside; for swing traders, a downtrend is defined as three or more consecutive days in which the closing price was lowerthan the opening price.dragonfly doji a candlestick with little or no distance between opening and closingprices, but a trading range below that level for the day.efficient market hypothesis the theory that pricing of stocks reflects all informationcurrently known by investors at any given time, resulting in the conclusion that allstock prices are fair and reasonable.engulfing line a candlestick pattern in which the main body of a trading day extendshigher and lower than the main body of the previous trading day.equity investment a form of ownership in a corporation, the best-known form ofwhich is stock.ex-dividend the date of ownership for the purpose of paying dividends. The owner ofshares on the specified date is entitled to the dividend, even if shares are sold after thatdate but before dividend payment date (when shares are said to be trading ex-dividend).The ex-date is the dividing point.exhaustion gap a type of gap in the direction of an extended price movement, signaling that the current trend is about to end and prices will level out or begin moving inthe opposite direction.expiration the deadline for an option and the date on which it loses all of its value.extrinsic value the value of an option not counting any intrinsic value; the time valuepremium, given this alternate name to consider the non-time elements of volatilitywithin the stock, and of proximity between stock’s current market value and the option’s strike price.fill or kill (FOK) a condition attached to a limit order instructing your broker tocomplete the order immediately or, if that is not possible, to cancel the order right away.financial statement a report published by a corporation reporting activity over a period of time, such as a full year (the operating statement) or balances of asset, liabilityand net worth accounts at the end of a period (the balance sheet).flat channel a channel whose trading range remains the same over time, with neitherrising or falling price trend exhibited for a period of months.fundamental analysis the valuation of stocks based on a company’s financialstrength, earnings, and trends, including assessment of working capital, equity and debtcapitalization, and operating results.
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fundamental volatility the degree of consistency or change in reported revenues andearnings from one year to the next.gap a price pattern in which one day’s opening price is higher than the previous day’shighest price or lower than the previous day’s lowest price.go short a transaction beginning with a sell order, later to close with an offsetting buyorder.good ‘til canceled (GTC) a condition attached to an order to leave it open indefinitely until it can be filled on the terms the investor requires; brokerage firms will letsuch orders expire after a specified time period.gravestone doji a candlestick with little or no space between opening and closingprice, but a trading range above those levels for the day.hammer a candlestick pattern occurring at the end of a downtrend. It consists of along lower shadow and a small real body, and signals a reversal and the start of anuptrend.hangman a candlestick pattern occurring at the end of an uptrend. It consists of along lower shadow and a small real body and signals a reversal and the start of a downtrend.head-and-shoulders bottom the inverse of a top, consisting of a head testing supportwith two shorter shoulders before and after, creating a letter w shape. The pattern anticipates a price increase.head-and-shoulders bottom the inverse of a top, consisting of a head testing supportwith two shorter shoulders before and after, creating a letter W shape. The pattern anticipates a price increase.head-and-shoulders top a price pattern with three peaks, the middle one higher thanthe first and third. This letter m shape pattern tests resistance and anticipates a price decline to follow.hedge a position taken in a security to offset or eliminate risks in another position.For example, going short may be used as a way to protect paper profits in longpositions.house requirement the maintenance requirement set by brokerage firms, which isequal to or greater than the minimum 25 percent required under NASD and NYSErules.immediate or cancel a condition allowing a broker to fill part of an order if the entireorder cannot be completed; and on the stipulation that this be done right away and anyremaining portions canceled.in the money condition of an option when the strike price of a call is lower than current stock price, or when the strike price of a put is higher than the current stock price.initial margin a limit on the level of borrowing investors are allowed by the FederalReserve Board’s Regulation T. It specifies that you can only borrow up to 50 percent ofa security’s purchase price.
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institutional investors large investors such as mutual funds, insurance companies orpension plans, holding diversified portfolios of stock and trading in blocks rather thanonly a few hundred shares. Institutional investors account for most of the market’streading volume.internal diversification a form of corporate diversification of capital into dissimilarproduct or service lines of business.intraday trader a swing trader or day trader who may modify positions based onprice gaps or reversals occurring from one trading day to the next.intrinsic value the premium value of an option equal to the number of points it is inthe money (current market value higher than a call’s strike price or lower than a put’sstrike price).leverage an investing strategy using borrowed funds to broaden a portfolio beyondavailable cash resources.limit order a type of order specifying execution of a buy at or below a specified price,or of a sell order at or above a specified price.long position ownership of stock and other securities, entered by execution or tradesin the sequence buy-hold-sell.long-legged doji a candlestick with little or no distance between opening and closingprices but exceptionally broad trading range above and below.long-term hold description of a strategy for portfolio management, involving selection of stocks with the intention of holding shares for many years in order to build a secure base for long-term growth.long-term liabilities all liabilities due and payable beyond the next 12 months (thecurrent portion), including notes, contracts and bonds.lower shadow in a candlestick, the trading range between the day’s low price and thebottom of the real body (opening or closing price).maintenance requirement the percentage of current market value of securities thatmust be kept in a portfolio at all times. Minimum federal requirement is 25 percent,but some brokerage firms require higher maintenance levels.margin call a demand from a brokerage firm for additional deposits by investorswhose maintenance requirement has not been met due to portfolio losses. If the margincall is not met, the brokerage firm will sell securities from the account.margin investing using funds borrowed from a brokerage firm, with securities in anaccount used as collateral.market order an order to buy or sell as quickly as possible and at the best availableprice. Execution is guaranteed, but price is not.market risk the risk that a stock’s value will fall rather than rise (or rise after an investor sells). Market risk can be compared and judged based on fundamental trends andtechnical price history.
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203
marubozu a candlestick with a real body but no upper or lower shadow;