What is Whipsaw?
A trader is said to be "whipsawed" when the price of a security suddenly moves in the opposite direction of a trade that he just placed.
How Does Whipsaw Work?
For instance, if a trader buys shares of Apple at $250/share, and over the course of the day the price drops to $230, the trader has been whipsawed.
Why Does Whipsaw Matter?
This usually occurs in a volatile market when traders are subjected to high risk. Short-term traders can be whipsawed often, but long term traders are likely to see better results over a longer time horizon.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
When a company dumps an executive, it's definitely a sign that it's time to step back, look at the big picture, and try to get a feeling for whether the news is a positive or negative for the...Read More →
Starting a business is both exciting and terrifying. First, there's finding the perfect idea that fills an obvious need. Then there's the challenge of gathering enough seed...Read More →
Many of the most famous names on Wall Street count poker as one of their favorite hobbies. David Einhorn, Steve Cohen, Steve Schonfeld and Carl Icahn are among the...Read More →