Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Markets Whipsaw, 2008 Financial Crisis Causes and Consequences

InvestorEducation / Learn to Trade Oct 03, 2011 - 01:38 AM GMT

By: Joseph_Russo

InvestorEducation

Best Financial Markets Analysis ArticleWhat Does Whipsaw Mean?

Simply stated, a whipsaw market condition is present when a security's price heads in one direction then reverses sharply and abruptly in the opposite direction.


Derived from the push and pull action used by lumberjacks to cut wood with a type of saw with the same name, the term has become synonymous with large fast-moving head-fake-type swings in the financial markets.

Whipsaw is an ever-present challenge in the trading and investment arena. According to one of Jack Schwagers original Market Wizards Ed Seykota, the only way to avoid whipsaw losses is stop trading and investing. Disengagement may work for a time however; I do not believe that Seykota intended for people to interpret his quote as a serious solution.

Seykota, best known for his extremely successful trend-based strategies, concedes that each is subject to whipsaw drawdowns and losses. In addition to being one of the best-in-class trading systems developers, Seykota has musical talents and a rather keen sense of humor as well.

The video below is of Ed Seykota and his blue grass band performing "The Whip-Saw Song." Embedded within the artistic levity are numerous pearls of wisdom. Do enjoy.

If you want to get insight and exposure to successful trend trading strategies like those used by Ed Seykota, subscribe to the NAVIGATOR today.

Roller Coaster Ride of the Stock Markets

RELATED NEWS

2008 Financial Crisis Causes and Consequences

John Allison, Retired Chairman and CEO, BB&T Corporation recently spoke to the Harvard Law School Tea Party about the causes and consequences of the 2008 financial crisis.

The hour and a half C-Span coverage of the event is well worth the time. Allison's talk clarifies succinctly all that is going on in the global financial sphere and its impact on regional economies around the world.

Apart from the bounty of illuminating financial and political aspects of Allison's talk, the one thing that also struck a chord were his thoughts and philosophy regarding individuals' sense of purpose and self-esteem relative to their chosen career paths.

Deriving passion from ones chosen field of expertise aligned with a mission to assist others and make the world a better place is the underlying theme of Allison's philosophy.

After soaking in all of the shared wisdom, I asked myself three things:

  1. Am I passionate about my work?
  2. Am I assisting others?
  3. Am I attempting to make the world a better place?

Though there is always room for improvement on every front, to my delight, I was able to answer yes to each of these three essential questions.

Whipsaw

Nothing Risked-Nothing Gained

There is no way to avoid regular bouts of occasional and sometimes extended periods of whipsaw.

In a choppy market riddled with whipsaw, the only strategy that may deliver alpha is a successful counter-trend strategy however; they too are subject to their own brand of whipsaw.

Trade Better/Invest Smarter

Elliott Wave Technology provides a suite of Winning Solutions designed to assist those who wish to trade better and invest smarter based upon the practice and deployment of proven trading strategies in concert with expert and unbiased chart analysis.

By Joseph Russo

Chief Publisher and Technical Analyst
Elliott Wave Technology
Email Author

Copyright © 2011 Elliott Wave Technology. All Rights Reserved.
Joseph Russo, presently the Publisher and Chief Market analyst for Elliott Wave Technology, has been studying Elliott Wave Theory, and the Technical Analysis of Financial Markets since 1991 and currently maintains active member status in the "Market Technicians Association." Joe continues to expand his body of knowledge through the MTA's accredited CMT program.

Joseph Russo Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules