FAQ

What Does Hawkish Mean?

Posted in FAQ | Miscellaneous, Submitted by Trading Critic on Sun, 2006-12-10 03:50.
What does Hawkish mean? We've heard it a lot lately in the financial news. Here is the definition for Hawkish.

What does Hawkish mean? We've heard it a lot lately in the financial news. "RBA maintaining a hawkish stance", "Yen gains as BOJ keeps up hawkish rhetoric", "Paris shares close higher, supported by less hawkish ECB comments", " Euro gains brief boost from hawkish Trichet comments" and "RNBZ Gets Hawkish, And Does Nothing". We all know that a hawk (noun) is a, "relatively small diurnal bird of prey with short rounded wings and very good eyesight which hunts by pouncing on small birds and mammals." To go hawking (verb) is to hunt with a hawk. To be hawkish – the adjective form of the word is simply described as "like a hawk". So in financial terms, what is the definition for hawkish?

The definition of hawkish is this: it is an aggressive stance. Just as a hawk is aggressive in hunting its prey, being hawkish relates to the aggressive stance taken with regard to the topic. For example, if there is a threat of high inflation, to describe the reserve bank of a country being hawkish in any official statement may mean they are leaning towards a stronger action such as favouring an increase in interest rates to dampen high inflation. The antonym (opposite) to hawkish is dovish. Good luck in your trading!

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About Price to Earnings (P/E) Ratio

Posted in FAQ | Traders' Delusions, Submitted by Trading Critic on Wed, 2006-11-22 02:40.
The Price to Earnings (P/E) Ratio is the most commonly used valuation metric used by investors

The Price to Earnings (P/E) Ratio is the most commonly used valuation metric used by investors to help determine is individual stocks are reasonably priced. It is a simple ratio to calculate but can be confusing to interpret. The ratio can be useful in some cases yet useless in others. The ratio was popularized by Benjamin Graham - author of "The Intelligent Investor" (a must read for all serious investors). Graham used this financial ratio as a quick way to determine if the company stock was trading on an investment or speculative basis.

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What does the term "go short" mean?

Posted in FAQ, Submitted by Trading Critic on Sat, 2006-07-08 00:51.

To go short in a trade in simple terms means that you have a bearish view on the stock, contract or currency you are trading. So as a trader, are looking to profit from a decreasing equity price.

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What does the term "go long" mean?

Posted in FAQ, Submitted by Trading Critic on Sat, 2006-07-08 00:50.

To go long in a trade in simple terms means that you have a bullish view on the stock, contract or currency you are trading. So as a trader, are looking to profit from an increasing equity price.

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What is a stop loss?

Posted in FAQ, Submitted by Trading Critic on Sat, 2006-07-08 00:48.

A stop loss is a defined level at which a trader would exit their short or long position. A stop loss can take a mental or a physical form. A mental stop loss is when a trader takes note of the price at which the stop loss resides, and only executes the exit order if they so wish. A physical stop loss is when an actual stop loss order is placed with the broker to exit the relevant trade at the predetermined level.

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