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A Simple Definition of Anchoring A behavioral bias where we fixate on an initial price, value, or piece of information and use it to make ongoing decisions—often leading to bad financial choices.

Definition of Overconfidence Overconfidence (in finance) is a behavioral bias where investors believe they have better knowledge, sharper instincts, or more accurate predictions than they actually do. This confidence leads them to take bigger risks, ignore danger signs, and make decisions based on gut feelings instead of solid strategy.

Definition of Herding Herding is when investors blindly follow what everyone else is doing instead of making decisions based on actual research, fundamentals, or strategy. It’s jumping into the market simply because “everybody’s buying” or dumping your investments just because “everyone is selling.”

Definition of Efficient Market Hypothesis (EMH) The Efficient Market Hypothesis (EMH) says this: All publicly available information is already baked into current stock prices — instantly. In other words, you can’t consistently “out-smart” the market by finding hidden gems, secret tips, or under-the-radar opportunities… because the market has already priced those in. Like, immediately. According to EMH, the only way to beat the market is by taking more risk — not by being s

What Is Asset Allocation? Asset allocation is the strategy of dividing your investments across different “buckets” — typically stocks, bonds, and cash — based on your goals, your time horizon, and how much risk you can stomach without losing sleep or stress-eating Chips Ahoy at midnight. Think of it like building a balanced meal. Stocks = protein Bonds = veggies Cash = carbs

What Is Rebalancing? Rebalancing is the periodic process of adjusting your investment portfolio back to its original target mix. In plain English: the market shifts, your allocations drift, and you move things around to get everything back where it’s supposed to be. If your plan says 70% stocks and 30% bonds, but stocks had a monster year and now you’re sitting at 82/18, rebalancing is the reset button.

Definition of Dollar Cost Averaging Dollar Cost Averaging (DCA) is an investing strategy where you invest a fixed amount of money at regular intervals—say, every week or every month—regardless of whether the market is up or down. Over time, this approach smooths out your purchase price and reduces the risk of buying everything at the market’s peak.

Definition of Buy and Hold Buy and Hold is a long-term investment strategy where an investor purchases assets—typically stocks, ETFs, or index funds—and holds them for an extended period, regardless of market fluctuations. The idea is simple: time in the market beats timing the market. Instead of jumping in and out based on daily trends or short-term news, the buy-and-hold investor focuses on the long-term growth of their investments.

Definition of Momentum Investing Momentum investing is an investment strategy where investors buy assets that have shown strong recent performance and sell those that have shown weak performance. It’s based on the idea that rising stocks often keep rising for a time, and falling stocks often keep falling, because of market psychology and herd behavior.

Definition of Growth Investing Growth investing is a strategy focused on buying shares of companies that are expected to grow faster than the overall market. These companies typically reinvest their profits back into expansion—through new products, technology, or market share—rather than paying dividends to shareholders. The goal? Long-term capital appreciation.

Definition of Value Investing Value investing is a long-term investment strategy focused on buying stocks (or other assets) that appear to be undervalued by the market. In plain English, it means finding strong companies selling for less than they’re truly worth—and holding them until their true value is recognized.

Definition of Contrarian Investing Contrarian Investing is a strategy where investors go against the prevailing market trends—buying when others are selling and selling when others are buying. The idea is simple but gutsy: when the crowd runs in one direction, look carefully at the opportunities they’re leaving behind. Contrarians believe markets often overreact to news, creating mispriced assets that can offer outsized returns once emotions settle.

Definition of Trend Trading Trend trading is an investing strategy that aims to profit by identifying and following the direction of a market trend — whether that trend is moving up or down. The basic idea: the market tends to move in trends, not random zigzags. Traders use price charts and technical indicators to figure out which direction the trend is heading and then ride that momentum until the trend starts to lose steam.

Definition of Position Trading Position trading is a long-term investing strategy where traders hold assets—like stocks, ETFs, or commodities—for weeks, months, or even years. Instead of reacting to daily price swings, position traders focus on the big picture—economic trends, market cycles, and company fundamentals. They’re not trying to “time” the market day by day—they’re aiming to catch major price movements over time.

Definition of Swing Trading Swing trading is a short- to medium-term trading strategy that aims to capture “swings” in a stock, ETF, or crypto asset’s price over a few days to several weeks. Unlike day traders who enter and exit within a single day, swing traders hold positions longer to ride momentum—buying when prices are poised to rise and selling when the trend starts to slow or reverse. The goal is simple: capitalize on market waves without being glued to a screen all

Definition of Day Trading Day trading is the practice of buying and selling financial instruments—like stocks, options, or currencies—within the same trading day. The goal is to profit from small price movements rather than long-term appreciation. By the end of the trading day, all positions are typically closed, meaning no holdings are carried overnight.

Definition of Scalping In trading, scalping is a short-term strategy where a trader aims to make many small profits by quickly buying and selling an asset — sometimes holding it for just seconds or minutes. The goal is to “scalp” tiny price movements, stacking up small wins that, over time, can add up to meaningful gains.

Definition of a Tick Chart A tick chart is a type of financial chart that plots price movement based on a specific number of transactions — or “ticks” — rather than time. Unlike traditional charts that show how a stock or asset performs over minutes, hours, or days, a tick chart updates only when a set number of trades have occurred.

Definition of Order Book An Order Book is a real-time, continuously updated list of buy and sell orders for a particular financial asset—like a stock, cryptocurrency, or commodity—organized by price level. It shows how much demand and supply exist at each price point and helps traders see market activity as it unfolds.

Definition of Volume Profile Volume Profile is a trading tool that shows how much trading activity (volume) occurred at specific price levels over a given period of time. Instead of focusing on when trades happened (like a traditional volume chart does), it focuses on where they happened — revealing price zones where the most buying and selling took place. Think of it as an X-ray of the market. It tells you where traders cared most, not just when they were active.