Outside the
U.S.A. a lot of people don’t know what a “Buck” is, so this post will explain
it to everyone.
Reading Time: 4 minutes Financial activity: Trading Knowledge level: Beginner
Summary
What Is a “Buck”?
The origins
of the word “Buck”
How is used
today the word “Buck”
A famous
trading system about “Bucks”
Conclusions
What Is a “Buck”?
Buck is simply
an informal reference to one U.S. dollar! It’s a popular slang term that every
trader/investor must know.
The origins of the word “Buck”
The origins
of the term date back to the American colonial period. In frontier areas,
barter was more common than money. One of the most valuable commodities traded
on the frontier was deerskins, also called “buckskins” (deer and buck are
synonyms). Deer skins were used to make shoes (moccasins) and clothes and could
also be exchanged for food. So this practice of valuing things concerning
buckskins became habitual and the term “Buck” became e synonym for “Money”.
How is used today the word “Buck”
A person (a
trader!) who wants to make money in a short amount of time with little effort
is a man that wants “make a fast buck”.
Making “a
quick buck” may refer to scams, and making “an honest buck” refers to someone
who wants to make money in a licit way.
On foreign
exchange trading desks, a buck commonly refers to a trade worth $1 million of a
currency transaction.
A famous trading system about “Bucks”
“Huck loves
her bucks!” and she tries to make these bucks with the help of a very simple
mechanical trading system (applied to the 1-hour charts of EUR/USD, GBP/USD, USD/JPY):
BUY when
the 5 EMA crosses above the 10 EMA from underneath and the RSI crosses above
the 50.0 mark from the bottom.
SELL when
the 5 EMA crosses below the 10 EMA from the top and the RSI crosses below the
50.0 mark from the top.
Add ADX > 25 as a parameter to weed out the bad signals (HLHB System updated).
Close the trade when a new signal materializes.
Close all trades by the end of the week.
Use a 150-pip trailing stop and a 400-pip profit target.
I've never
used this trading system, but I think it's a great place to start programming
on any trading platform. Do it as exercise!
Conclusions
Every area
of daily life has its lingo and economics is no exception.
Today you
learned that a “Buck” is an informal reference to $1.
This
information led us to discover a simple mechanical trading system called the “Huck
Loves Her Bucks (HLHB) System”. Try to program it on your trading platform to
see if it makes bucks or not!
A sincere wish of good work to all!
Written by F. GRAMOLA (*).
(*) Member of S.I.A.T., the Italian Society of Technical Analysis (member society of I.F.T.A. – International Federation of Technical Analysts).
Warning
We merely cite our personal opinions for educational purposes only.
All trademarks are the property of their respective owners.
Investing and trading are risky. Don't invest or trade money that you cannot afford to lose.
Initial photo by Zahrin Lukman on Unsplash.
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