Investopedia

Continue to Site »

Whipsaw

Filed Under »
Dictionary Says

Definition of 'Whipsaw'

A condition where a security's price heads in one direction, but then is followed quickly by a movement in the opposite direction. The origins of term is derived from the push and pull action used by lumberjacks to cut wood with a type of saw with the same name.
Investopedia Says

Investopedia explains 'Whipsaw'

There are two types of whipsaw patterns. The first involves an upward movement in the share price, which is then followed by a drastic downward move, which causes the share's price to fall relative to its original position. The second type involves the share price to drop for a little while, and then suddenly, the price abruptly surges towards positive gains relative to the stock's original position.

Articles Of Interest

  1.

    Where's The Market Headed Now?

    Whether up, down or sideways, learn about some of the factors that drive stock market moves.

  2. Tips For Investors In Volatile Markets

    Find out what to look out for when trading during market instability.

  3. Understanding Volatility Measurements

    How do you choose a fund with an optimal risk-reward combination? We teach you about standard deviation, beta and more!

  4. What burst the Mississippi bubble?

    In 1715, France was essentially insolvent as a nation. Even though taxes were raised to extremely high levels, the hole that warfare had left in the French treasury was too deep. France began ...

  5. Turnaround Stocks: U-Turn To High Returns

    Find out which catalysts can turn struggling stocks around to create a tidy profit.

  6. Do Adaptive Moving Averages Lead To Better Results?

    These complex indicators can help traders interpret trend changes, but are they too good to be true?

  7. What is a stock ticker?

    A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the various stock exchanges. A "tick" is any change in price, whether that ...

  8. Institutional Investors

    Learn more about the advantages that financial institutions enjoy when buying and selling securities.

  9. Weighted Average

    Learn how to weigh the relative importances of data points in a calculated average.

  10. Bid-Ask Spread

    Find out more about this frequently referenced, but often misunderstood, term used to describe the price at which a stock is bought or sold at.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center