Library

Trading Library Bid Price tl;dr The bid price is the price that buyers are willing to pay for an asset. When you sell, you receive the bid price, and when you buy, you deal with the ask price. The difference between these two is the spread, and understanding the bid price helps you assess market … Read more

Trading Library Beta tl;dr Beta measures how much a stock’s price moves in relation to the overall market. A stock with a beta of 1 moves with the market, while stocks with betas above 1 are more volatile, and those below 1 are less volatile. Traders use beta to assess risk, manage portfolios, and make … Read more

Trading Library Bearish tl;dr A bearish market is when prices are expected to fall, and traders anticipate further declines. Signs of a bearish market include price drops, breaking support levels, and negative sentiment. Traders can profit from a bearish market by short-selling or using put options, but risk management is key to avoid big losses. … Read more

Trading Library Bear Trap tl;dr A bear trap happens when the price of an asset drops below a key support level, fooling traders into thinking the market is going bearish. However, the price quickly reverses and moves higher, trapping those who sold in the process. Traders should be cautious and wait for confirmation before acting … Read more

Trading Library Barycentric Coordinates tl;dr Barycentric coordinates in trading are used to assess the market’s position relative to three key levels or indicators (like support, resistance, and moving averages). By assigning weights to these levels based on where the price is located, traders can determine whether the market is likely to continue a trend or … Read more

Trading Library Balance of Power (BOP) tl;dr The Balance of Power (BOP) indicator shows who’s in control of the market—buyers or sellers. A positive BOP means buyers are in control (bullish), while a negative BOP suggests sellers are in control (bearish). Traders use the BOP to identify trends, spot divergences, and confirm market direction. Definition. … Read more

Trading Library Backtesting tl;dr Backtesting is a way to test a trading strategy using historical data to see how it would have performed in the past. By applying your strategy to past market conditions, you can analyze whether it’s profitable and make adjustments before using it with real money. Definition. The process of testing a … Read more

Trading Library Backtest Strategy tl;dr A backtest strategy is a way to test a trading strategy using historical data to see how it would have performed in the past. By inputting your strategy’s rules into a backtesting tool, you can simulate trades and analyze potential profits and losses before trading in real-time. Definition. The process … Read more

Trading Library Average True Range (ATR) tl;dr The Average True Range (ATR) measures how much a stock’s price moves up and down, helping traders understand market volatility. A high ATR shows large price swings (more risk), while a low ATR indicates steadier price movement (less risk). Traders use the ATR to set stop-loss and take-profit … Read more

Trading Library Ask Price tl;dr The ask price is the price at which a seller is willing to sell a stock. If you want to buy that stock, you’ll pay the ask price. The difference between the ask price and the bid price is called the spread, and it helps traders understand the liquidity and … Read more