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The Bull Flag Set-Up
A sharp advance, then a shallow drift against it, and a ceiling on that drift which is the one price the whole set-up is read from.
The Bear Flag Set-Up
A sharp decline, then a shallow drift back up against it, and a floor under that drift which is the one price the whole set-up is read from.
The Bull Pennant Set-Up
The same pause as a bull flag drawn as a triangle rather than a channel: the highs step down, the lows step up, and the range squeezes toward nothing.
The Bear Pennant Set-Up
A hard decline followed by a coil rather than a bounce: highs stepping down, lows stepping up, and a range that runs out of room.
The Trend Pullback Set-Up
The plainest continuation shape there is: an established uptrend, a dip into a rising reference that has already held twice, and a resumption from it.
The Rally Fade Set-Up
The bearish mirror of the trend pullback: a downtrend, a rally into a falling reference that has already capped it twice, and a resumption from there.
The Gap-and-Go Set-Up
A stock opens well above the range it has been trading in and never trades back into it, with the first half-hour's range becoming the reference everything afterwards is read against.
The Gap-Down Continuation Set-Up
A stock opens well below its range on a repricing it cannot recover from, and the first half-hour's low becomes the reference the rest of the session is read against.
The Momentum Stair-Step Set-Up
An advance that moves in stages: a short run, a tight shelf that holds above the last one, another run, and a series of shelves that never gives one back.
The Flat Base Set-Up
A ceiling price has been turned back from several times, a range that tightens underneath it, and the session that finally closes above it.
The Ascending Triangle Set-Up
A flat ceiling with a rising floor underneath it: buyers arriving earlier at every dip while one price keeps capping the rallies.
The Descending Triangle Set-Up
A flat floor with a falling ceiling above it: sellers accepting less at every rally while one price keeps absorbing the declines.
The Cup and Handle Set-Up
A rounded decline and recovery back to a prior high, then a small drift below it, and a test of the level the whole structure is organised around.
The Inverted Cup and Handle Set-Up
A rounded top and decline back to a prior low, then a small drift above it, and a test of the level the structure is organised around.
The Volatility Squeeze Set-Up
A market whose range has contracted to the narrowest it has been in months, which says a large move is coming without saying anything at all about its direction.
The Range Break Set-Up
A rectangle with both sides working — a floor and a ceiling each tested more than once — and the session that finally closes outside one of them.
The Double Bottom Set-Up
Two lows at roughly the same price with a rally between them, and the high of that rally as the level the reversal is confirmed at.
The Double Top Set-Up
Two highs at roughly the same price with a dip between them, and the low of that dip as the level the reversal is confirmed at.
The Inverse Head and Shoulders Set-Up
Three lows with the middle one deepest, two rallies between them forming a neckline, and the break of that neckline as the confirmation.
The Head and Shoulders Top Set-Up
Three highs with the middle one tallest, two dips between them forming a neckline, and the break of that neckline as the confirmation.
The Rounding Bottom Set-Up
A decline that slows, flattens, and turns without ever making a dramatic low, over months rather than weeks — and the old high that ends it.
The Rounding Top Set-Up
An advance that loses speed, flattens into a dome, and turns down over months — with the price the advance came from as the level that ends it.
The Diamond Top Set-Up
A top that first broadens into wider and wider swings and then contracts back into a coil, leaving a diamond outline and a narrowing lower boundary that ends it.
The Three Rising Valleys Set-Up
Three successive lows, each higher than the last, under a ceiling formed by the rallies between them — a base that announces itself before the level goes.
What a Stock Actually Is
A share is a legal claim on a company's assets and earnings, ranked behind everyone else with a claim. That ordering explains most of how equities behave.
How a Stock Exchange Works
An exchange is a matching engine surrounded by rules. Understanding the order book, the market maker and the auctions explains why liquidity appears and disappears at particular moments.
Order Types, and What Each One Guarantees
Every order type trades certainty of price against certainty of execution. There is no order that guarantees both, and most execution surprises come from expecting one to.
The Bid-Ask Spread
The spread is the price of immediacy, paid on every round trip. It is also the most reliable live read on how liquid a stock actually is.
Market Hours, Premarket and After-Hours
US equities trade for six and a half regular hours and many more extended ones. The extended sessions run on different rules, thinner books and prices that frequently do not survive the open.
Market Capitalization
Market cap is price multiplied by share count. It is the market's price for the whole equity, and it is the single most useful number for deciding whether two companies are comparable at all.
Float and Shares Outstanding
Shares outstanding is every share in existence. Float is the portion actually available to trade, and the gap between the two explains a great deal of unusual price behaviour.
ETFs, Index Funds and Mutual Funds
A fund is a basket sold as one security. The differences that matter are how it trades, what decides its holdings, and what it charges.
Bonds: Coupon, Par, Price and Yield
A bond is a loan cut into tradable pieces. Its price and its yield move in opposite directions by arithmetic necessity, and that single fact drives most of what happens in fixed income.
The Treasury Yield Curve
The curve plots what the US government pays to borrow across every maturity. Its level, its slope and its changes are the most watched picture in macro.
Foreign Exchange and the Dollar
Currencies are quoted in pairs, so every quote is a ratio between two things that both move. For equity traders the dollar is the pair that matters most.
How Commodities Trade
Commodities trade mostly as futures with delivery dates, which introduces a cost of carry that equities simply do not have.
OTC Markets and the Tiers Beneath the Exchanges
Thousands of securities trade without an exchange listing, under tiers that differ enormously in how much a buyer is entitled to know.
Short Selling, Borrow and Short Interest
Selling short means selling borrowed stock. The borrow, the cost of carrying it and the disclosure schedule together explain most of what makes crowded shorts behave the way they do.
Options: Calls, Puts, Strikes and Expiry
An option is a right with a deadline. Because it expires, its value decays with time as well as moving with price, which is what makes it behave unlike a share.
Dilution, Offerings and Reverse Splits
Companies that need cash sell shares, and every new share issued shrinks the claim attached to the existing ones. All of it is disclosed, usually before it happens.
ADRs and Foreign Listings
A way of holding a foreign company through a US-listed security. The wrapper introduces a ratio, a fee, a currency exposure and a sponsor.
Circuit Breakers and Halts
Mechanisms that stop trading, at the market level and at the individual security level. They pause the market rather than preventing the move.
Settlement and Clearing
A trade is agreed in an instant and completed a day later. What happens in between involves a clearing house that stands between the two sides.
How an Index Is Built
An index is a set of rules about what to include and how to weight it. Those rules determine what the index measures and produce mechanical flows when they change.
Going Public: IPO, Direct Listing and SPAC
Three routes to a public listing, with different mechanics, different disclosure and different consequences for the shares that arrive on the market.
Short Sale Rules and Restrictions
Short selling is permitted and constrained. The constraints are specific, they change during stress, and they affect what is possible rather than what is advisable.
ECNs, Dark Pools and Market Fragmentation
Trading in a single security happens across dozens of venues. Some display their quotes and some do not, and the consolidated picture is assembled from all of them.
The Income Statement, Line by Line
The income statement records performance over a period. It runs from revenue at the top to net income at the bottom, and each subtraction along the way answers a different question.