Whipsawed Definition & Meaning

This evolved into a straight, stiff blade without a frame, up to 14 feet long and with a handle at each end. The upper handle was called the tiller and the lower one the box, so called from its appearance and because it could be removed when the saw was taken out of one cut to be positioned in another. The whipsaw was used close to the felling site to reduce large logs to beams and planks. New York shares were whipsawed, with an early recovery giving way to a short-lived bloodbath at midday. Whipsaw describes the movement of stocks in a volatile market when a stock price will suddenly switch direction. Emerging markets like India can whipsaw as global investors who poured in money can pull it out quickly, particularly when central banks raise interest rates and attract investor capital.

whipsaw meaning

With little visibility over how higher interest rates will filter through the wider economy, money managers say trading has been thin and prone to whipsaw moves in both directions. Investors are pouring billions of dollars into annuities, as worries about stagflation and a U.S. recession whipsaw the stock and bond markets. The Parabolic SAR, or Parabolic Stop and Reverse, is a trailing stop-based trading system and is often octafx review used as a technical indicator as well. This fuckbag mouthed off to me in the bar and then turned his back, so I whipsawed his janky ass. Stocks that are trending up but have an RSI in overbought territory could keep trending up, but they could also be due for a whipsaw to get back into normal territory. Evaluating what’s causing the recent surge in buying demand can determine whether you should wait for better RSI numbers.

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Scalping is a type of daytrading where traders target a lot of small gains, quickly moving in and out of stocks. They wait for the whipsaw to happen and then jump into the stock after the sharp drop to pick up the move back up. If a trader opens a position because an indicator showed one thing and the indicator immediately changes to show a sell signal, the trader was whipsawed. A trader gets whipsawed if they buy a security immediately before its price drops or sell a security right before its price jumps, leading to losses. The term whipsaw is used in situations when the market is volatile, the trader misreads the signs, and the stock he or she purchases moves in an opposite-to-expected direction. Whipsaw refers to a loss that a trader incurs when a security suddenly and unexpectedly drops soon after it is purchased.

Swing traders can use volume indicators to evaluate whether a potential trade candidate may be heading toward whipsaw movement. When a stock moves sharply in one direction, and then sharply in another it is whipsawing. Though a whipsaw generally means the asset moves against the prevailing trend , it is also used for assets that don’t have an established trend.

whipsaw meaning

Stocks finished Wednesday lower after a whipsaw end to the day’s trading in the wake of the Fed’s latest interest-rate decision. Sometimes the price just eos price world jumps around without any apparent rhyme or reason. Such price action is characterized by trend line violations, false breakouts, and erratic behavior.

Needs to review the security of your connection before proceeding. Imagine you had bought XYZ shares after a 6-month decline, because you were convinced they would start rising. Imagine you have been monitoring the stock of XYZ Inc., a multinational tech giant. Over the past three months, XYZ stocks have been rising steadily, and you expect them to continue appreciating. Whether you’re a teacher or a learner, Vocabulary.com can put you or your class on the path to systematic vocabulary improvement. The word in the example sentence does not match the entry word.

However, Britons voted to leave, sterling fell to $1.30, and thousands of traders lost a lot of money – they were whipsawed. Futures are up, suggesting the broader stock market could eke out gains for the third quarter invast review despite recent whipsawed trading. Certain technical indicators are useful in identifying a whipsawing market. Envelopes, momentum indicators, parabolic SAR, and the vortex indicator are some good examples.


When there aren’t enough and traders start taking profits en masse, a whipsaw can happen. When traders see a trend, take a position, the stocks whipsaw the other way, and this happens again and again, we have a whipsaw series. The authors state that a trader needs to adapt their trading style to leverage the different phases in the stock markets. They also suggest that investors select asset classes in different market regimes to ensure a stable risk-adjusted return profile. There is no set rule as to how to manage whipsaw movements in a volatile market as it is an unexpected movement.

Long-term equity anticipation securities are options contracts with expiration dates that are longer than one year. Volatility measures how much the price of a security, derivative, or index fluctuates.

Long-term traders are generally able to ride market volatility and end up on the other side with desirable gains. Trend followers can be whipsawed out of a position if they buy when the stock is overheated. Seasoned trend followers using technical indicators like RSI to determine whether its time to buy or sell positions. Whipsaws can cause losses for traders by triggering closing trades, only to be reversed in short order. Traders are often stopped out when a market whipsaws, or moves sharply in one direction before returning to its original state. For example, a stock may whipsaw during an earnings announcement or other market moving event.

The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. To subject to pressure or attack from two different sources or directions at the same time.

The whipsawed house in which the girls lived had been built more than sixty years before. The message had warned her to retreat, to return to the whipsawed cabin and wait. It seemed to her that the hard, whipsawed planks were pushing through the soft flesh to the bones. The narrative whipsaws between two protagonists who occupy the same physical space but are separated in time by exactly 100 years. Reactivity is what makes traders and investors bearish or bullish at precisely the wrong moments, Dr. Reid added.

Swing Trading

Many analysts seek models that explain patterns in the markets so that an investor can select the right asset classes. Whipsaw describes the movement of a security when, at a particular time, the security’s price is moving in one direction but then quickly pivots to move in the opposite direction. Charles is a nationally recognized capital markets specialist and educator with over 30 years of experience developing in-depth training programs for burgeoning financial professionals. Charles has taught at a number of institutions including Goldman Sachs, Morgan Stanley, Societe Generale, and many more. The economic whipsaw unleashed by the pandemic gets most of the blame, said John Auers, executive vice president at Turner, Mason & Co., an oil-industry research firm in Dallas. The whipsaw moves were reminiscent of the early stages of the Covid-19 pandemic, another time of deep uncertainty about the economic outlook.

  • She was watching men use the difficult two-man whipsaw when she noticed that half of their motion was wasted.
  • Swing traders can use volume indicators to evaluate whether a potential trade candidate may be heading toward whipsaw movement.
  • A trader is considered to be “whipsawed” when the price of a security they have just invested in abruptly moves in the opposite and unexpected direction.

This strategy countered the union strategy of engaging in whipsaw strikes against individual firms and forcing them to concede individually. “Buck the trend” is a colloquialism that refers to when a security’s price moves in the opposite direction to the broad market. A hedge is a type of investment that is intended to reduce the risk of the effect of adverse price movements in an asset. A head-fake trade is when a security’s price makes a move in one direction, but then reverses course and moves in the opposite direction over a period of hours or days. The real-estate market has been whipsawed by high interest rates and unemployment. Over the course of one day, January 24, the Dow Jones Industrial Average plunged 1,000 points in early trading only to whipsaw and regain all its value by the market close.

Meaning of whipsaw in English

Whipsaw can hurt swing traders when they enter into a position at a bad time and the stock immediately whipsaws against them. If a trader, perhaps due to misleading signals, buys stocks just before they fall and/or sells them just before they rise in a volatile market, he or she has been whipsawed. While it may look like a sideways market, whipsaws imply that there are large up and down swings within a certain trading band. This can be profitable for swing traders who can catch momentum both up and down as the market oscillates. Buying long straddles in the options market is another strategy that can profit as prices move both up and down. The first involves an upward movement in a share price, which is then followed by a drastic downward move causing the share’s price to fall relative to its original position.

Sawyers either dug a large pit or constructed a sturdy platform, enabling a two-man crew to saw, one positioned below the log called the pit-man, the other standing on top called the top-man. The saw blade teeth were angled and sharpened as a rip saw so as to only cut on the downward stroke. On the return stroke, the burden of lifting the weight of the saw was shared equally by the two sawyers, thereby reducing fatigue and backache. Fluctuations in world energy prices have whipsawed the fortunes of oil companies for decades. Whipsaw often happens when a stock is either overbought or oversold. Trend traders buy stocks that have been going up and short stocks that have been going down.

Whipsaw – definition and meaning

Improve your vocabulary with English Vocabulary in Use from Cambridge. Whipsaw in trading securities often results in trading losses. The global pandemic has swung us from pessimism to optimism as we near the end of the long dark tunnel, only to whipsaw us back again. Scene transitions whipsaw with the speed of an ERG handle, all quilted together with that addictively rhythmic sound design. Our yearly fluctuations are dramatic, and even an average year feels like a bit of a whipsaw. When the history of American hardship is written in some distant decade, two recent events may capture the whipsaw forces of the age.

Conversely, some investors, specifically those who short sell, can face a whipsaw at the bottom of a market. For example, an investor may anticipate a downturn in the economy and purchase put options on the S&P 500. However, almost immediately after purchasing the put options, the market unexpectedly rallies, and the investor’s options quickly become “out of the money,” or worthless. In this case, the whipsaw occurs during a recovery phase, and the investor loses the investment. Stocks that are overheated are at the risk of a whipsaw because the further away they move from fair value, the fewer traders there will be to keep up the buying or selling demand on shares.

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