Investing Education Stories

Skewness is a term that is typically found in statistics, and statistics is used in standard deviation and other investing and trading setups. Skewness is taking a point on a data set and seeing how far is varies from the normal distribution within that data set. If you look at chart, it can skew left or right of the normal distribution area.

When you evaluate a position for a portfolio, you always look at the risk and try to measure it. With market risk adjusted performance, this is taking the market risk and quantifying it. Understanding market risk is important because each market will have different risk levels and variables.

Market facilitation index or MFI for short, helps people in finding the price movements of the market. Learning how price and volume move together can certainly help to give you an edge in your current trading and investing setup.

Price to Book is a widely used ratio and is used to compare market value to book value, giving you a ratio that can be compared against others in the industry. Learning the different ratios that look at the fundamental health of a company is key, because they are used in various reports.

Book value per share is taking the total shareholder equity and subtracting out the preferred equity, and then dividing it by the shares outstanding. A simple formula that will give you the book value you are searching for.

Earnings per share or EPS is taking the company’s net income, subtracting dividends, and dividing that by how many shares are outstanding. EPS is used as a measuring tool to value a stock and compare it against others in the industry.

The PEG ratio or price to earnings to growth ratio is used when evaluating the health and growth of a company. These ratios allow for people to compare companies on a more consistent level and bring efficiency to the process.

The inverted hammer is a technical analysis occurrence when there is a downtrend in the market, and a candle appears with a small body, minimal bottom shadow, and a long top shadow and forms an upside down hammer.

The spinning top technical pattern is one of the more easier ones to identify, meaning there are not many preceding patters to watch or after patters to look for. Searching for the spinning top is simply looking for a trend reversal in the current market you are analyzing.

Technical analysis is something many people in the trading and investing community use, so it is important to understand what certain terms and formations mean. For this write up, we are going to go over a ladder bottom and what that may mean for you.