Should You Trust Popular Trading Proverbs?

February 5, 2024
When navigating the world of stock trading, what kernels of truth can you take from some of the most ubiquitous trading proverbs?
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After you listen

Sometimes an oft-repeated axiom, maxim, or cliché has at least a small piece of truth to it. Others make sense and are true in some situations, but not others. 

The world of finance and investing is no exception to the coining of popular axioms and the misconceptions that can go along with them—especially when it comes to trading stocks. Traders are well-supplied with frequently repeated sayings that speak to perceived data patterns. And they must work to gut-check choices plagued by their own emotional biases.

On this episode of Financial Decoder, host Mark Riepe is joined by Nathan Peterson, director of derivatives analysis, to unpack a handful of these more ubiquitous expressions around investing and trading and give insight into how much weight they should carry in your decision-making.

To read the study Mark references on the connections between risk tolerance and visceral pain, check out "Relating the Visceral Factor of Pain to Domain-Specific Risk Attitudes" in the Journal of Behavioral Decision Making.

If you enjoy the show, please leave us a rating or review on Apple Podcasts.

What is it like to trade with Schwab?

Today's Options Market Update

Investors are on edge as volatility spiked this morning as they await Nvidia earnings after the close. Expectations are for a sharp move in either direction depending on the results. Fed minutes are also anticipated later.

Looking to the Futures

Diverging inflation readings reaffirm the Canadian dollar’s downtrend.

Weekly Trader's Outlook

Stocks have remained buoyant this week, despite higher yields and hotter inflation data. Will Nvidia's earnings alter recent bullish sentiment?

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