whipsaws

Whipsaw is a term used in woodworking and finance to describe two distinct concepts. In woodworking, a whipsaw is a traditional two-man crosscut saw used to segment large timbers. The blade is long and thin, and each worker holds an end, alternately pulling and pushing to advance the cut. The blade’s flexing can create a whipping motion, which gives the tool its name. Whipsaws are valued for their portability and lack of powered equipment, but they require careful technique to maintain a straight cut and to avoid binding or pinching the wood.

In finance, a whipsaw refers to a rapid, adverse price move that triggers stop-loss orders or trading signals, only to reverse and move in the opposite direction shortly afterward. The pattern typically involves a market moving beyond a level that triggers exits, then retracing, leaving traders with losses or missed opportunities. Whipsaws are more common in volatile or illiquid markets, around earnings announcements, or during news-driven events. Traders often address whipsaw risk through risk-management practices, such as wider stops, conditional orders, and diversification of signals rather than reliance on a single indicator.