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☑️The trading effect is the difference in performance between an active investor's portfolio and a chosen benchmark. Active investing takes a hands-on approach and requires that someone act in the role of the portfolio manager. With active investing, the aim is to see if the chosen composition of the investor's portfolio, including any alterations that were made during the observed period, performed better or worse than the benchmark. The trading effect can also be used to determine whether active investing (trading) is better than more passive buy-and-hold investing strategies. The chosen benchmark has to have relevancy to the portfolio being measured and must be widely recognized and used. The trading effect serves as a way for investors to quantify a portfolio manager's performance. It answers the simple question of whether the manager (or investor) added value by making adjustments to the portfolio. 🔷If the benchmark, such as the Dow Jones Corporate Bond Index, outperforms the actively managed bond portfolio, then the portfolio manager subtracted value for the investor. If the bond portfolio earns more than the bond index, then the changes in portfolio composition have increased investor value, indicating a good management strategy. 💲Although the techniques for evaluating stock portfolio performance have been in existence for decades, comparable techniques for examining bond portfolio performance were initiated more recently, when the bond market volatility increased dramatically. The evaluation models for bonds typically consider the overall market factors and the impact of individual bond selection. This technique for measuring the trading effect breaks down the return based on the bond's duration as a comprehensive risk measure, but it does not consider differences in the risk of default. Specifically, the technique does not differentiate between an AAA bond with a duration of eight years and a BBB bond with the same duration, which could clearly affect the performance. A portfolio manager that invested in BBB bonds, for example, could experience a very positive trading effect simply because the bonds were of lower quality. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

Equities markets are increasingly trending toward 24-hour trading .For investors, this may change the calculus of how to go about managing a portfolio and participating in trades. For now, many investors are relegated to trading on weekends or holidays examples of after-hours trading as a means of accessing certain financial markets during periods in which primary exchanges are closed. 🔷Access to Markets Some markets are more conducive to weekend trading than others. For example, the cryptocurrency market is famously open 24 hours per day, seven days per week. This gives cryptocurrency traders the opportunity to conduct transactions anytime they wish due to the decentralized and international nature of many crypto tokens, this is a crucial feature of the space. Another market with extended trading hours is forex. Foreign exchange markets are typically open for 24 hours per day, five days per week. This means that, depending upon the location, the investor may be able to trade on the weekends in local time. Holding forex positions open over the weekend is possible, but it can lead to price gaps, volatility, and other unanticipated effects related to global news and events. Rarely, brokers may facilitate trading oftentimes in synthetic markets on weekends. This is often limited to particular indices, commodities, cryptocurrency, and forex. ☑️Weekend and Holiday Trading:What You Can Do Place Orders Most brokers will allow investors to place an order even when markets aren’t open, such as over the weekend or on holidays. However, these orders will be kept pending and will not be executed until the market reopens, by which point prices, liquidity, and many other factors may have changed. Trade Cryptocurrencies Because of the 24/7 nature of the cryptocurrency space, investors can execute crypto trades on weekends or holidays without concern. However, that’s not to say that trading volumes will always be the same, and investors may find it more difficult to execute trades at their desired price if fewer traders are active. Trade Certain Stock Indices As mentioned above, certain specialized stock indices such as the Weekend U.S. Tech 100 or other weekend indices offered by IG do offer weekend trades. Nonetheless, investors should be sure to understand the charges, risks, and processes associated with brokerages allowing trades on the weekend, as they are likely to be different from trades done during normal market hours. ☑️Weekend and Holiday Trading: What You Can’t Do Execute Trades on Most Traditional Assets One thing that investors are not able to do when trading on the weekend or over holidays is execute trades for most traditional assets. This is a reason why weekend or holiday trading is inherently risky: the bid-ask spread you encounter during those periods may change significantly, along with the price and many other factors, by the time the trade actually executes upon the market reopening. Directly Trade Stocks on Major Exchanges Similarly, it is not possible to directly trade stocks on major exchanges during the weekend or on a holiday. However, it is possible to place orders for execution on the next day the exchange is open. Further, as mentioned above, there are specialized exchanges that are open on weekends. Additionally, investors may utilize electronic communication networks (ECNs), systems that match buy and sell orders without the use of an exchange, to make indirect trades. However, there are often limitations to what ECNs can accomplish, and they often come with lower liquidity and increased volatility. Access Immediate Market Liquidity Even if you are able to find a way to complete trades over the weekend, on a holiday, or at a time when markets are generally not available, you should expect to have a difficult time accessing liquidity. This may be true even in the case of trades that would be easy to facilitate during regular trading hours. 🔹There are drawbacks to 24-hour trading, including lower liquidity, higher volatility, and the possibility of skewed bid-ask spreads.

🔷The first decade and a half of the cryptocurrency space have often taken traditional definitions of volatility and magnified them, enhancing both the risks and the potential benefits of this phenomenon. The newness of crypto and the vast and rapidly changing field of tokens contribute to volatility, as do shifts in supply and demand dynamics over time, massive speculation, a deeply engaged investor base with a potent sense of fear of missing out (FOMO), and aspects of the structure of the crypto market itself. Though this volatility can be unsettling, we’ll explore below ways crypto investors can stay steady-both financially and emotionally-through those swings. 💲Volatility in the crypto space is often defined similarly to the world of traditional finance and refers to the degree of variation of a series of trading prices of an asset over time. However, cryptocurrencies often experience significant price fluctuations-10% or more in a single day, in many cases, relative to traditional securities. Why Crypto Is So Volatile? Liquidity plays a significant role in crypto volatility. With crypto markets open 24/7, and with execution based on technology rather than a third party, liquidity can be unpredictable. The result may be quick changes in a cryptocurrency’s price. Investors commonly use leverage in cryptocurrency transactions, leading to magnified gains and losses. In turn, price movements up or down can trigger a chain reaction of investor moves and a greater cumulative price shift.Other elements contributing to cryptocurrency volatility include external factors such as regulation or the lack thereof and the impact of regulatory uncertainty on investor behavior, rapid changes in sentiment across the world of crypto investors, and influence by the media. Cryptocurrencies can be much more volatile than other types of assets because of their unique trading ecosystem, including 24-hour access and a lack of regulation, as well as their speculative nature, the developing and crowded industry, and rapid changes in market sentiment, among other factors. ☑️While diversification may not be able to impact the price swings of a cryptocurrency, it can help investors to protect their holdings in the face of downturns. Though much of the crypto market tends to move in tandem, distributing a crypto portfolio across a variety of big names, up-and-coming tokens, stablecoins, and other categories of digital assets can help to reduce risk. Perhaps even more importantly, ensuring that crypto holdings are just part of a well-balanced overall investment portfolio is key for many investors. Volatility is part of crypto’s DNA and learning to manage it can make investors stronger, not just wealthier. The goal isn’t to predict every wave, but to ride them with understanding and discipline. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

🔵Bitcoin halving refers to an event that takes place about every four years and reduces the block reward by 50%. This lowers the supply of bitcoins entering the market, which increases scarcity and can act to raise its price if market conditions remain the same.Block rewards are part of the blockchain’s automatic process of validating transactions and opening new blocks (called mining). Miners, participants who compete in a race to solve a cryptographic puzzle, are given new bitcoins if they are the first to solve it. Their block is added to the blockchain, they receive a reward, and the network starts another race. All miners confirm the data in the newly added block while trying to solve the puzzle for their own new blocks, hoping for an ever-decreasing reward. 🔷One of the key concepts behind halving the reward is to address inflation concerns. Inflation occurs when a currency buys fewer goods over time. Bitcoin halving counters inflation by reducing rewards and maintaining scarcity. However, this inflation “protection” mechanism does not protect Bitcoin users from the inflationary effects of the fiat currency to which it must be converted to be used in an economy. ❗️Gains made regarding market value might offer inflation protection for investors, but they don’t for the cryptocurrency’s intended use as a payment method. The Role of Halving in Bitcoin Investment Bitcoin started as a payment method aimed at eliminating regulatory agencies or third parties in transactions.It became popular with investors once it was noted that there was the potential for gains. Investors poured into the new asset space, creating demand that the cryptocurrency’s designers may not have anticipated. For investors, a halving represents a reduction in the new coin supply, but it also offers the promise of an increase in investment value if the event’s effects remain the same. This places Bitcoin investing into the realm of speculation because those invested in the cryptocurrency are hoping for gains. When halving reduces new bitcoins, demand typically rises. This can be noted by looking at Bitcoin’s price after each previous halving event it has typically risen. The historic increase in demand has driven price increases, which is a good thing for investors and speculators. 🔷Bitcoin consumers may feel the impact of halving on their holdings' value. Those who buy Bitcoin to make purchases will generally only be affected by price fluctuations, which may or may not remain similar to those before the halving occurred.For those using Bitcoin for remittances, a halving means the same thing as it does for shoppers. The value of their remittances will depend on Bitcoin’s market price after the halving event. 🔹Each halving of the mining limit affects the Bitcoin network, increasing scarcity and potentially increasing demand and price, although it also reduces the profitability of mining for small companies, which can lead to consolidation in the industry. Investors should remember that although historical trends show price increases after halving the mining limit, future results are uncertain and carry no guarantees. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

🔹A bond is simply a loan taken out by a company. The company gets the money from investors who buy its bonds instead of going to a bank. The company pays an interest coupon in exchange for the capital, which is the annual interest rate paid expressed as a percentage of the face value. The company pays the interest at predetermined intervals, usually annually or semiannually, and returns the principal on the maturity date, ending the loan. Unlike stocks, bonds can vary significantly based on the terms of their indenture, a legal document outlining the characteristics of the bond. Each bond issue is different, so it's important to understand the precise terms before investing. There are six important features to look for when considering a bond. Types of Bonds: 🔹Corporate Bonds Corporate bonds refer to the debt securities that companies issue to pay their expenses and raise capital. The yield of these bonds depends on the creditworthiness of the company that issues them. The riskiest bonds are known as junk bonds, but they also offer the highest returns. Interest from corporate bonds is subject to both federal and state income taxes. 🔹Sovereign Bonds Sovereign bonds, or sovereign debt, are debt securities issued by national governments to defray their expenses. The issuing governments are very unlikely to default, so these bonds typically have a very high credit rating and a relatively low yield.Bonds issued by the federal government in the United States are called Treasuries. Those issued by the United Kingdom are called gilts.Treasuries are exempt from state and local tax, although they're subject to federal income tax. 🔹Municipal Bonds Municipal bonds, or munis, are bonds issued by local governments. Contrary to what the name suggests, this can refer to state and county debt, not just municipal debt. Municipal bond income isn't always subject to most taxes, making it an attractive investment for investors in higher tax brackets. Risks of Bonds Bonds are a great way to earn income because they tend to be relatively safe investments. But they do come with certain risks, just like any other investment. Interest Rate Risk Interest rates share an inverse relationship with bonds. When rates rise, bonds tend to fall and vice versa. Interest rate risk comes when rates change significantly from what the investor expected.An investor faces the possibility of prepayment if interest rates decline significantly. They'll be stuck with an instrument yielding below market rates if interest rates rise. The greater the time to maturity, the greater the interest rate risk to an investor because it's harder to predict market developments further into the future. Credit/Default Risk Credit or default risk is the risk that interest and principal payments due on the obligation won't be made as required. When an investor buys a bond, they expect that the issuer will make good on the interest and principal payments, just like any other creditor. An investor should weigh out the possibility that the company may default on the debt when they're looking into corporate bonds. Safety usually means the company has greater operating income and cash flow compared to its debt. If the inverse is true and the debt outweighs available cash, the investor may want to stay away. Prepayment Risk Prepayment risk is the risk that a given bond issue will be paid off earlier than expected, normally through a call provision. This can be bad news for investors because the company only has an incentive to repay the obligation early when interest rates have declined substantially. Investors are left to reinvest funds in a lower-interest-rate environment instead of continuing to hold a high-interest investment Bonds have historically been more conservative and less volatile than stocks, but there are still risks. There's a credit risk that the bond issuer will default. There's also interest rate risk, where bond prices can fall if interest rates increase. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

What You Need to Know for Trading Next Week: 🔹Meta Faces EU Antitrust Investigation Over WhatsApp AI Policies The European Commission has launched a new investigation into Meta Platforms (META), as the EU's enforcement arm continues its recent trend of investigating big tech companies. The Commission will evaluate whether Meta's new policy blocking AI companies from being able to reach users directly through the app violates EU competition law. Currently, users can communicate with several AI companies that offer their chatbot services through WhatsApp, but as of Jan. 15, 2026, those companies may be blocked from talking to users thanks to a new Meta policy. 🔹Salesforce Tops Earnings Estimates as AI Drives Growth Salesforce (CRM) topped profit estimates in its latest earnings report and lifted its outlook for the full year, citing momentum from its AI offerings. The customer relationship management software leader late Wednesday reported revenue that came in roughly in line with estimates, while adjusted earnings per share of $3.25 was about 40 cents higher than analysts had projected. 🔹Stocks Little Changed as Major Indexes Back Near Record Highs Stock futures are hovering near unchanged this morning after the major indexes gained for the seventh time in the last eight trading sessions on Wednesday. Futures tied to the Dow Jones Industrial Average and the benchmark S&P 500 were up 0.1% recently, while those linked to the tech-heavy Nasdaq were fractionally lower. The Dow and S&P 500 enter today's session less than 1% away from new record closing highs. Stocks have rallied as investors have grown increasingly confident that the Federal Reserve will cut interest rates at its policy meeting next week. 🔹Paramount, Netflix Continue Sweetening Bids for Warner Bros. Discovery Shares of Paramount Skydance (PSKY) and Netflix (NFLX) have stabilized this morning after sliding yesterday amid reports that the companies had sweetened their respective bids to acquire Warner Bros. 🔹Discount Retailers Report Strong Earnings as Consumers Seek Value Shares of Dollar Tree (DLTR), Five Below (FIVE) and Dollar General (DG) are all rising this morning as investors digest strong earnings reports from the discount retailers. Dollar Tree, which released its better-than-exepected results yesterday morning, said it continues to see "value-seeking behavior" from consumers and that it gained market share with higher-income households. Stock futures are holding steady Thursday as investors await more economic data that could influence the Federal Reserve's decision on interest rates next week; Meta is facing a new antitrust investigation over its artificial intelligence policies in WhatsApp; Salesforce earnings topped estimates after the bell Wednesday; Paramount Skydance and Netflix are reportedly continuing to modify their bids for Warner Bros. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

Few films manage to capture the atmosphere of an intraday trader's life. The tension that people experience, balancing on the edge between profit and imminent losses, is rarely shown in mass films. Although films such as "Wall Street" and "Boiler Room" romanticize the lifestyle associated with capital accumulation by any means, they do not fully convey the realities of trading. However, these five films demonstrate important lessons that every trader can learn in order to gain a deeper understanding of their profession. 🔵‘Revolver’: Strategy, Transparency, Lateral Thinking, and Ego The tactical application of chess strategy interwoven throughout this 2005 film underscores how lateral thinking is employed to decipher transparency. The greatest enemy hides where you least suspect it: the ego. Purposely appearing weak to camouflage strength and vice versa is the engine behind price action. Traders can identify with how closely trade strategy parallels chess strategy. What appears on the surface is rarely the true intent. This exemplifies the mentality embodied by seasoned traders. 🔵‘Rogue Trader’: Stop-Losses This film is the cautionary tale of trader Nick Leeson, who bankrupted Barings Bank in 1995 after accumulating $1.4 billion in hidden trading losses.1 The movie initially captures the exhilaration of turning a large loss into an equally large win. Ultimately, that false confidence leads toward the collapse of England’s oldest banking institution. The film depicts the consequences of adding a complete lack of trade management to a losing position.Any trader who has blown out an account can attest to the fact that desperate money never wins. This perpetual reminder resonates throughout the film as it places the viewer in the cockpit of a speeding race car heading over a cliff. Traders can identify with all the telltale signs of an impending blowout. A well-managed stop trumps a poorly managed win. 🔵 ‘Rounders’: Money Management and Spotting Fades This 1998 movie is a favorite among poker players, and it exemplifies the parallels that exist between playing poker and trading the markets. The two main characters literally represent the two sides that exist in the psyche of every trader. The contrast of styles between a “grinder” and a cowboy, and the repercussions of those styles, are illustrated throughout the film. The spotting of “tells” in poker is akin to spotting the “fades” in trading to determine the true order flow pressure behind the price action. “You can’t lose what you don’t put in the pot” resonates with trading and poker equally. 🔵 ‘Floored’: The Emotional Ups and Downs of Trading This 2009 documentary captures all the highs and lows of being a trader, moving from the trenches of the trading pits to the electronic trading screens. The repercussions for the old-school floor traders left behind by the electronic trading revolution are clearly portrayed. Their ardent stubbornness illustrates their downfall.Adapt or be eliminated is the universal theme in this film, very much like the markets. Candid interviews with both successful and struggling traders provide rare insights into the impact of this profession on lifestyle, family, and overall psyche. Traders will be inspired by many facets of this film, which truly captures the essence of trading for a living. 🔵‘Two for the Money’: Complacency, Humility, and Preparation This 2005 movie covers the rags-to-riches journey of a sports handicapper in the realm of sports betting. Traders can relate to the euphoria that accompanies overleveraged wins and the numbing disbelief in the wake of massive losses thereafter. This cautionary tale depicts the slippery nature of how win streaks can manifest into much larger losing streaks, as complacency creates blind spots in the trader’s psyche. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

The tick index compares how many stocks are rising versus how many are falling on the New York Stock Exchange (NYSE). The index measures stocks making an uptick and subtracts stocks making a downtick. For example, there are roughly 2,800 stocks listed on the NYSE. If 1,800 stocks rise and 1,000 stocks fall, the tick index reads +800. ☑️Traders can use it to quickly gauge market sentiment. It's unreliable for long-term strategies but helpful in rangebound and trending markets. A tick index is a short-term indicator, often only relevant for a few minutes. A positive tick index signals market optimism, suggesting more stocks are on an uptick than a downtick. However, the tick index is speculative and unreliable for traders with long-term strategies. Day traders use the tick index to gauge market sentiment at a specific time. The ratio of rising to falling stocks helps traders make quick decisions based on market activity. Readings of +1,000 and -1,000 are extreme; traders should watch for overbought and oversold signs. Rangebound Market: The tick index can be used to help time entries and exits in choppy markets. Traders could open a long position when the tick index falls below -1,000 and exit when the indicator gives a reading of +1,000. Traders could match these readings with key support and resistance levels from an existing trading range before entering the market. Trending Market: The tick index can remain above or below zero for extended durations when a stock is trending. If a market is trending higher, traders could take entry when the indicator returns to zero instead of waiting for it to return to – 1,000. Other indicators could be used in conjunction with the tick index to increase the probability of a successful trade. For instance, traders might use a moving average with the tick index to confirm the market is trending. Traders can look for divergence between the tick index and price to gauge the underlying strength of a market. For example, if a stock's price is making lower lows, but the tick index is making higher lows, it indicates that the sellers may be losing momentum. Conversely, if a stock's price is reaching new highs while the tick index is failing to register new highs, it suggests possible weakness in the prevailing trend. 🔷The tick index is a tool for comparing rising and falling stocks on the NYSE, providing insights into market sentiment. It's useful for day traders who leverage it for short-term market sentiment analysis, but its reliability is limited for long-term strategy. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

A reverse stock split is when a company consolidates its shares into fewer, higher-priced shares. For example, in a 1-for-10 reverse split, one new share is issued for every 10 old ones, making each share 10 times as valuable while reducing the number available. Importantly, this maneuver doesn’t change the overall value of the company or improve its business prospects; it just adjusts the supply of shares. 🔷When a company announces a reverse stock split, experienced investors typically view it as a warning sign. The move, which boosts the share price by shrinking the number of shares outstanding, is rarely a sign of business strength. The market often interprets reverse splits as a company's last-ditch effort to cover up more serious problems, so investors usually react with skepticism or outright selling. Reverse stock splits are a red flag because they are common (for companies coming out of bankruptcy… or when the share price declines to a low value). Experienced investors know that high-quality firms don’t need to artificially boost share prices. Some companies use reverse splits to boost their profile, believing that a higher share price might attract more interest from retail traders or lend an air of stability. ☑️Reverse stock splits are rarely the success stories that companies (or their press releases) want investors to believe. While they might provide temporary relief from exchange rules or attract certain types of investors, they do nothing to address core business issues. For investors, a reverse split should prompt a hard look at the company fundamentals. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).

The Chaikin oscillator identifies trends and potential reversals, which helps technical analysts seeking to predict market movements. The Chaikin oscillator is named after its creator, Marc Chaikin. The oscillator is used in technical analysis to measure the accumulation-distribution line of moving average convergence-divergence (MACD). The primary components in calculating the Chaikin oscillator are the Money Flow Multiplier, Money Flow Volume, and exponential moving averages (EMAs). To calculate it, subtract a 10-day EMA of the accumulation-distribution line from a three-day EMA of the accumulation-distribution line. This measures momentum predicted by oscillations around the accumulation-distribution line. 🔹Picture an auction to understand how an oscillator works. Buyers (accumulators) are on one side and sellers (distributors) on the other. More sellers than buyers lower the price, while more buyers increase it. Technical analysts use the Chaikin oscillator more than fundamental analysts, who focus on business performance for predicting stock prices. Fundamental analysts emphasize gathering the most information for market forecasts. Technical analysts believe that all known information is already priced into stocks and that patterns in the ups and downs of equity prices can better predict the market’s movements. Technical analysts use the Chaikin oscillator to find directional trends in momentum. The Chaikin oscillator is used to calculate how much money is moving into a market, relative to the amount of money leaving the market. A positive Chaikin oscillator indicates net buying pressure, while a negative oscillator indicates net selling pressure. 🔵The Chaikin oscillator should be used with other technical indicators to enhance the accuracy of market predictions and investment strategies. Positive divergences in the Chaikin oscillator can indicate potential buying opportunities, while negative divergences can signal potential selling opportunities. These oscillator signals aid traders in decision making and offer a clear gauge for market momentum. Learn more about the future of financial technology at [daoti.io](http://www.daoti.io).