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
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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Our Three 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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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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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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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 Is a 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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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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How Averaging Up Works
Buying more of your best stocks, also called averaging up or pyramiding, is something most great investors through the years have practiced.
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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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Stock Market Analysis
Successful stock market analysis must always be mindful of Jesse Livermore's famous quote: "Markets are never wrong; opinions are."
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Market Timing
It has been said that timing is everything. In investing, market timing may not be everything, but it is a big thing. By using market timing strategies, you can identify the best times to buy and sell a stock, thereby maximizing your profits.
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How to Improve Your Investing Habits
Consider this list of 10 ideas to help improve your investing habits. Adopt one of them or all of them—find what works for you. I try to use all of them in my own investing.
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