Axe
Candlefocus EditorTraders use the concept of an axe to establish their desired outcomes in the markets. By having a specific point they wish to achieve, they can begin to formulate a trading plan to reach thatgoal. Traders can establish long-term and short-term axes, and can use them either to create profits or to offset losses. They may use an axe to take advantage of a mispriced security or to arbitrage between different markets. They may also use it to hedge other positions or to speculate on the movement of a particular security.
When a trader is said to have an axe to grind, it simply means that they are trying to achieve a certain result in the markets. While this can be done by keeping the desired position private, it is better to share it, as doing so can open up more opportunities for collaboration and information exchange. By forming alliances and actively seeking out partners, a trader can better ascertain their chances of success in the markets.
Axe is an important trading term to understand, as it allows traders to identify their desired outcomes and create an actionable plan to reach them. Before beginning any trading activity, a trader should assess their needs and wants, and determine the axes they will pursue. By doing so, they can maximize their potential returns while minimizing their risks.