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whipsaw
What does whipsaw mean?
A whipsaw is a rapid price swing in one direction immediately followed by a sharp reversal, often stopping out traders on both sides. It is common in highly volatile markets.
"The choppy tape whipsawed me out of both my long and my short."
Origin
From the back-and-forth motion of a two-person whipsaw used to cut timber.
Frequently asked questions
What is a whipsaw in trading?
It's a rapid price swing in one direction immediately followed by a sharp reversal, often stopping out traders positioned on both sides.
When do whipsaws happen?
They're common in highly volatile or choppy markets, where prices lurch back and forth without a clear trend.
Where does the term come from?
From the back-and-forth motion of a two-person whipsaw used to cut timber — the price 'saws' traders in both directions.
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