BROWSE

Weak Hands

What is 'Weak Hands'

1. The intention of futures contract holders not to receive delivery of the underlying.

2. Retail traders in the forex market who abide by the conventional wisdom that when a pattern is broken, get out.

Explaining 'Weak Hands'

1. Futures contract holders with weak hands are generally considered to be small speculators without the financial resources associated with the delivery and storage.

2. For example, retail traders with weak hands would place a stop at the bottom of a double bottom or at the top of a double top and once the pattern is broken, they would automatically be stopped out. Conversely, dealer and institutional traders will exploit this behavior by staying in once the pattern is broken, forcing the weak hands out before allowing the price to change direction and the pattern to correct itself.


Further Reading


African weak states and commercial alliances
academic.oup.com [PDF]
… the signals of change from product markets or capital mar- kets are at first weak and do not … a good one for this book would have been The Visible Hand, because the visible hand of politics … which he has exercised in the past over such processes will pass into other hands.1 That …

Weak efficiency of the cryptocurrency market: a market portfolio approachWeak efficiency of the cryptocurrency market: a market portfolio approach
www.tandfonline.com [PDF]
… the signals of change from product markets or capital mar- kets are at first weak and do not … a good one for this book would have been The Visible Hand, because the visible hand of politics … which he has exercised in the past over such processes will pass into other hands.1 That …

Intermediate goods and weak links in the theory of economic developmentIntermediate goods and weak links in the theory of economic development
www.aeaweb.org [PDF]
… the signals of change from product markets or capital mar- kets are at first weak and do not … a good one for this book would have been The Visible Hand, because the visible hand of politics … which he has exercised in the past over such processes will pass into other hands.1 That …

Financial development and economic growth: the role of stock marketsFinancial development and economic growth: the role of stock markets
www.jstor.org [PDF]
… the signals of change from product markets or capital mar- kets are at first weak and do not … a good one for this book would have been The Visible Hand, because the visible hand of politics … which he has exercised in the past over such processes will pass into other hands.1 That …

The failure of the weak state in economic liberalization: liberalization, democratization and the financial crisis in South KoreaThe failure of the weak state in economic liberalization: liberalization, democratization and the financial crisis in South Korea
www.tandfonline.com [PDF]
… the signals of change from product markets or capital mar- kets are at first weak and do not … a good one for this book would have been The Visible Hand, because the visible hand of politics … which he has exercised in the past over such processes will pass into other hands.1 That …



Q&A About Weak Hands


Who are considered to have weak hands?

Futures contract holders with weak hands are generally considered to be small speculators without the financial resources associated with the delivery and storage.

What is weak hands?

Weak hands are those who do not wish to receive delivery of the underlying.

What is a double bottom or top?

A double bottom or top is a chart pattern that forms when prices fall twice, but then rise above their previous low point (or vice versa). The second low point may be higher than, lower than, or equal to its predecessor. Double tops and bottoms can also occur in an uptrend as well as a downtrend. When they occur at resistance levels, they often mark reversals from up trends into down trends (and vice versa). They can also mark reversals from short-term corrections into long-term trends (and vice versa). The two troughs should be approximately equal in value if it is assumed that there has been no significant change in trend between them; otherwise it would be called a "triple bottom" or "triple top". In other words, if there were any significant changes in trend during this period then it would not really qualify as a double bottom/top because it would not represent two distinct lows/highs made by the market. For example, if prices fell significantly after reaching their first low point but then rose again before falling for good at their second low point then you could say that there were actually three distinct lows made by the market during this time period - hence why we call it triple bottoms/tops instead of double bottoms/tops."

How does one exploit this behavior?

Dealer and institutional traders will exploit this behavior by staying in once the pattern is broken, forcing the weak hands out before allowing the price to change direction and correct itself.

Leave a Reply

Your email address will not be published. Required fields are marked *