Secret Glossary
5T - upon open of a new 5 min candle a 60-90 second move in one direction gets faded for the last 3 min of the candle in the
other direction
(in steep directional markets upon open counter directional move up to 4 min which gets faded entirely in the last 60 seconds
Act/react- action/reaction principle (extended moves come back to their mean)
Ask (or Offer) – The price that people are willing to sell at.
ATNH - all time new highs (as a general guideline when new ATNH are printed daily pivots are good s/r zones for targets as well as Fibonacci extensions)
Baldwin exit - exit strategy that has a mental stop but allows for running the stop temporarily to get on large size orders the better fill after the first bounce back into liquidity and possibly better fill prices than the original stop (this exit strategy requires an in depth knowledge of the markets of a professional)
Bamboo - chart pattern formation - sideways market with color alternating price bars
Beauty principle 1. Events come in pairs: review the prior days trading behavior and assume similar trading circumstances today 2. measure the price distance the last time price hugged the MA that it is trading near right now and assume the same trading behavior right now 3. use "beauty" (chart harmony) as a filter for engaging or disengaging in the market
BO - breakout
Bid – The price that people are willing to buy at.
Breakout (BO)- A Breakout is a price movement that pierces the upper or lower boundaries of a trading range or other defined s/r zone
CEOD - cheapest entry of the day (proprietary chart pattern setup: a counter directional trade which requires price for a long setup on a 5 min chart to be at least 90 min below the simple 20 MA-penetrate the 20 MA and touch or violate the 40 MA-retrace back to the 20 MA where the long entry is to be considered)
Confirmation - Traders often look more than one signal to confirm their opinion on the price direction of a security. Confirmation refers to a subsequent signal that validates or reinforces the traders opinion on where the issue is heading
Cover – To close out a short position.
Dir rel - directional reload a: 20MA 1 min chart touch entry (very aggressive) b: 40MA 1 min chart penetration + retest of that price level (aggressive)
Creep - directional slow market on 5 or 15 min charts with "bearded"(wicks) candles (nothing stronger than a creep, because the action/reaction principle can’t be applied so it’s hard to fade it since there is no washout or otherwise action and the even stronger part is that its counter intuitive since it feels actually as if the direction is over any minute and one wants to fade the direction into the counter direction => don't fade a creep)
EBO - early breakout (anticipated breakout)
EOD - end of day
EODrev - end of day reversal play (entry on or shortly after 19:00 for counter directional mini squeeze)
EOM - end of month
ETRI - early triangle (anticipated triangle breakout )
Fade - To take a position that is counter to the current trend of a trading instrument. The position is established at the end of an up or down leg.
FED 123 - entry strategy for FED news release : a price movement right at news release sets for trading direction b wait for a 80-120% retracement of this initial move c fade this move as soon as momentum seizes in the direction of original move (,pattern development between 2-8 min,FED123 is not applicable for FED minutes release)
Fly - MA continuation pattern entry setup - often also an EBO
Get Flat – To close out a long position.
H&S - head and shoulders (reversal chart pattern)
HOD - high of the day
inflection point - high likely reversal point in multiple markets
Intraday High & Low – The high and low for that day
Intraday Support & Resistance – The support and resistance levels for that day
Liquidity - Describes the level to which a security can be traded without significantly affecting price. A liquid security can undergo a high volume of trading without a significant change in price.
LOD-low of the day
Market Order - An order to buy or sell a security at whatever price is obtainable at the time
OMT - (one more time) momentum based entry method used as an early entry method of a BO
Opening Price - The price (or price range) recorded during the period designated by the exchange as the official opening.
Opening - The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the opening."
P&L – Profit & Loss. What a trader has made or lost in a given day.
Paper trade - (depending on market conditions I have about 3 high probability trades per day but to keep scanning focus for setups and to release energy built up to not over trade low probability setups i execute lower probability setups as well and as release built up energies)
Pinch play - (chart pattern formation) prices getting "pinched" between 20 and 200 MA forming a triangle
POI– Point of Interest
Position – The side that you are in a trading vehicle. What you are holding; either short or long.
Pullback – When a trading instrument is strong (going up) and comes off (goes down) a little bit. The thought is that it will probably go back up again at some point.
Quad Exit -I use QUAD EXITS to honor the principal of "Choices" (hence emotional freedom while being in a trade)
quad exits for immediate risk reduction: I am all in and my system has a high expectancy of immediate profits
so i exit half of my position for immediate financing of the trade so i get out with half for small profits which
mitigates risk to a BE (break even) situation without needing to raise the stop for the remainder of my position.
I take another 25% of position on my first target and now am emotionally free on the last 25 %
which either hit another target or run smoothly with a trail stop if it develops into a directional move
(this is the scenario of a trade working out,the other scenario is after financing i get stopped out = a BE situation since I took 50% off for a profit which mitigates the other 50% being stopped out for a loss and the third scenario is a full loss on 100% of the position)
Range - The difference between the high and low price of a trading instrument during a given period
Rev time - reversal time-statistical edge of a market direction turning point (these times vary for various markets)
RiPs - representation is psychology (set chart work spaces in alignment to market condition and system procedures)
Scalping – When a trader takes small profits and trades quickly in and out of a trading instrument.
Selling off – When a trading instrument is going down and the thought is that it will continue to do so.
Slippage - a failure to meet expectation with regard to the execution of an order. Slippage also describes the difference between estimated transaction costs for a trade and the amount paid due to market conditions, poor execution etc.
Spread – The difference between the bid and the ask.
Short Squeeze - When those that are short have to cover to avoid excessive losses. Leads to a seemingly inexplicable up move.
Stop Loss Order – This is an order that becomes a market order when a particular price level is reached. A sell stop is placed below the market a buy stop is placed above the market.
S/R-support resistance
Swing Trading - Trading in a time frame of one to four days. Swing Traders attempt to exploit short-term price momentum.
Tape - Level 2 screen showing bid and ask and inside and the amounts of contracts offered at these levels (also at times referred to as dome,L2,matrix,ABV)
TCIP - trading comes in pairs (markets have a short term memory, often prior days trading behavior is mirrored in the present day, or last times price behavior at a MA is mirrored in present time behavior)
TD-trend day
Tick - The minimum fluctuation/movement (up or down) in the price of a security.
TL-trend line
TP - turning point
Trend – The pattern a stock is following. It is best NOT to fight the trend.
TRI - triangle (chart pattern formation)
V - chart pattern formation of a >80% price bounce (similar to Japanese candlestick patterns of a bullish engulfing pattern or a piercing pattern) (principle rule: never fade a V)
Volatility—The amount of price movement in a given stock
Volume – Total number of contracts traded as of that point in the day.
Times: ( all in NY TIME ZONE )
Pre market – Trading between 8:00 and 9:30 A.M. (index futures)
Morning session (opening session) – Trading between 9:30 and 11:15 A.M (index futures)
Expiry - Currency options are typically set to expire at the New York expiry 10 A.M. (or the Tokyo expiry 3 p.m. Tokyo time)
The Fix – London Closing Time 11:00 A.M. (4 PM LONDON)
Doldrums – Trading between 11:15 A.M. and 2:15 P.M.
Afternoon Session - Trading between 2:15 and 4:00 P.M.(index futures)
After-hours – Trading between 4:00 and 8:00 P.M.(index futures)
Crypto Currency – Trading 24/7 (sessions from 19:00PM to 19:00PM)