What Does Relative Performance Mean?
Relative performance (RP) measures how a stock is performing relative to a specific market or index. Using RP lines is a good way to gauge a stock's health.
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Investing Lessons
The Importance of Cutting Losses Short
Our method of cutting losses short rests on a set of rules developed over 45 years of investment advisory experience. Here's how it works.
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Investing Books
August 15, 2017 | by Paul Goodwin
I have just three points to make about investing books.
First, don't expect an investing book to change your work life or your investing life.
You got to be the investor you are through a lifetime of experience, and one...
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Options Trading Terminology
Options trading has its own vernacular. To get started trading options, it's important to familiarize yourself with the following terms.
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Technical Analysis of Stocks
Technical analysis of stock trends helps investors to determine how the markets, and their stocks in particular, are likely to behave in the days ahead.
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Our 3 Best Market Timing Indicators
Cabot's proven Market Timing Indicators are Cabot Trend Lines, Cabot Tides and Two-Second Indicator. Here's how each of them works.
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Double Bottom Chart Pattern
A double bottom chart pattern is a chart pattern used in technical stock analysis to describe the fall in price of a stock or index, followed by a rebound, then another drop to a level that's roughly similar to the original drop, and another...
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Earnings Season and How to Handle It
How should you play earnings season? There is no one, perfect way. But I'll highlight the good and bad of three different, realistic scenarios.
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What Does Buy-on-Stop Mean?
A buy-on-stop is a trade order used to limit a loss or protect a profit. It's a buy order held until the market price hits the stop price.
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What Is Investment Leverage?
Investment leverage, which in investment terms is just a fancy word for "debt," can move worlds of money if used properly.
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Why Is Trading Volume So Important?
Trading volume reflects overall market activity, indicating the sheer amount of buying and selling of securities. Here's why it's so important.
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Advanced Technical Analysis
This page deals with topics discussed in advanced technical analysis. If you're new to technical analysis or need a refresher, click here.
Double Top
A double top occurs when a stock attempts to break out above a recent peak but fails. (Remember, that first peak resistance!)...
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Small-Cap Confidential FAQs
Q: How should I systematically use Cabot Small-Cap Confidential to invest? (Do I invest in every recommended stock, etc.?)
Tyler Laundon: For starters, it’s important to recognize that every investor is different. We all have different risk profiles, different amounts of capital to invest preferences...
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Value Investing FAQs
Q: What is your investment process and criteria for investments?
Roy Ward: I am a value investor. I look for high-quality companies that are undervalued, and companies with strong balance sheets and low price to earnings (P/E) ratios. I use the criteria spelled out the...
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Options Trading FAQs
Q: What is an option
Jacob Mintz: Before you read any further, make a cup of coffee. For the uninitiated, options can get complicated.
An option is a contract that gives its owner the right (but not the obligation) to purchase or sell an underlying at...
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Growth Stock Investing FAQs
What are the best practices of growth investors?
Here are some keys to becoming a successful growth stock investor:
1. Work to identify truly great growth companies
2. Cut your losses short
3. Let your winners run
4. Hold stocks of good companies long term
5. Avoid buying on avoid...
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How Do I Plan for Investment Risk?
Investment risk is a fact of life. Without risk, there would be no reward. The important thing is to know how to plan for it.
Since I was a sophomore in college, my passion has been the stock market—learning its history, finding what methods and...
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Stock Investing FAQs
Q: What is your position on averaging up as a stock advances?
A: If I had a choice with any stock, I'd prefer to average up, but each stock has its own personality. The stock you mentioned has proceeded forward in price only after consolidation periods. said...
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High Frequency Trading
High frequency trading is the implementation of online stock trading strategies noted for extremely quick holdings, to exploit short-term market inefficiencies.
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What are Considered Bull Markets and Bear Markets?
The markets are governed by two overarching macrotrends: bull markets and bear markets. If you properly identify each, you can improve your returns.
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