Category: Knowledge
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Glossary 4
Liquidity trap (in a price range) → Meaning (simple): A liquidity trap in trading is a price zone where tons of orders, leverage, and attention are concentrated, so price keeps getting sucked back there. It feels like a strong level, but in reality it’s a trap where many traders get chopped up (buy high, sell…
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Glossary 3
Correction → Simple meaning: A noticeable drop in price (often 10–20% or more) after a strong rise, but not necessarily the end of the overall uptrend. Article example: Calls this “one of the worst corrections since 2017” and argues it’s not just a normal correction, but a bigger change. Drawdown → Simple meaning: How far…
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Glossary 2
Market Structure (Lower Highs & Lower Lows) → Simple Definition: The direction of the trend based on the “staircase” of price moves. The Concept: In a healthy uptrend, price makes a High, drops slightly (Higher Low), then pushes up to a new High (Higher High). In the Article: The author points out “Lower Highs and…
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Glossary 1
Oversold → Meaning: A technical term suggesting price has fallen too much, too fast compared to recent history. Example: Some indicators (like RSI) say oversold when many people have been selling and price is unusually low relative to recent weeks. It doesn’t guarantee a bounce, but it often hints at a possible short-term rebound. ETF…
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Why Inflation Favors Stocks
Stocks represent businesses that can raise prices as inflation rises, boosting revenues and earnings. Most bonds pay fixed coupons that lose value as inflation erodes purchasing power. You can think of stocks as rubber bands—their cash flows can stretch with inflation if the company has pricing power. Bonds are more like hard plastic—their cash flows…