Return on Equity (ROE, Return on average common equity, return on net worth, Return on ordinary shareholders' funds) (requity) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus … [Read more...]
CD Basics (Certificates of Deposit)
A certificate of deposit or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions. CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings … [Read more...]
Swing Trading system
Swing trading is commonly defined as a stock, index, or commodities trading practice whereby the instrument is bought or sold at or near the end of an up or down price swing caused by daily or weekly price volatility.[1][2] A swing trade position is typically open longer than a day, but shorter than trend following trades or buy and hold investment strategies. Swing traders … [Read more...]
Absolute vs. Relative Return
Absolute return is simply the return on a particular asset, portfolio or investment. The return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage) that an asset - usually a stock or a mutual fund - achieves over a given period of time. Relative return is the difference between the absolute … [Read more...]
Paper Trading: Testing Investment Strategies
Paper trading (sometimes also called "virtual stock trading") is a simulated trading process in which would-be investors can 'practice' investing without committing real money. This is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets. Before the widespread use of online trading for the general public, … [Read more...]