Price Shocks: Anticipation Is Everything by Perry J. Kaufman
A major selloff in the market can happen suddenly or build slowly. When the market is dropping, how can the trader decide when it’s time to move from risk-on to risk-off? Here’s a method you can use based on volatility of returns and a few simple rules.
Price shocks are ugly. By definition, they produce huge losses for most investors because they move in the opposite direction from the positions held by nearly everyone. When price shocks cause upward moves in the stock market, no one seems to complain about them. They don’t threaten to wipe out your investment ...