The Secret Trading 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. On the right side of the box.
ATNH - all time new highs (as a general guideline when new ATNH are printed daily pivots are good s/r zones for targets and markets tend to sell off in the AM session and creep higher in the doldrums)
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 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. On the left side of the box.
Breakout (BO)- A Breakout is a price movement that pierces the upper or lower boundaries of a trading range.
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 cant be applied so its 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 15:50 for counter directional mini squeeze-hold into closing time!)
EOM - end of month (be aware that at last and first day of the month both the open and the close 30 min can vastly differ from regular trading behavior )
ETRI - early triangle (anticipated triangle breakout )
Fade - To take a position that is counter to the current trend of a stock. 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
Friday rule - this is a psychological rule to come into a new week fresh and with a psychological advantage to achieve this instead of following purely procedure on a Friday on stops trading after small small losses or small winnings if that Friday isn't an ideal trading day - the logic behind this is that turning a small winning day on a Friday into a loosing day sets the negative tone for the upcoming week regardless of how successful actually the whole week was since we remember always our last actions-the same counts for tuning a small loosing day into a big loosing day-so Fridays afternoon session trades are disproportional in psychological value and as such it is warranted to call it an early day when trading isn't absolutely conducive to one system.
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 indices,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 metho used in the first 12 min of the opening session 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 in my mind lower probability setups as well and as such post those in the room-do NOT EXECUTE those trades!)
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 stock. What you are holding; either short or long.
Pullback – When a stock 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 % who 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) example: prepping LONG entry NQ stop: 12 ticks 1st.target exit: 12 (18)ticks 50% of total position size out 2nd. target exit: 18 (26)ticks 50% of total position size out stop adjust: after price moved 14 ticks from entry set stop to BEand trail 1 tick for each tick advance from there)
Range - The difference between the high and low price of a commodity, futures, or option contract during a given period
Rev time - reversal time-statistical edge of a market direction turning point (10:00,10:30,11;00,11:30,12:00,...,13:30,14:00,14:30,15:00,15:30)
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 stock.
Selling off – When a stock or the futures are 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.
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 refereed 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)
Tick - The minimum fluctuation/movement (up or down) in the price of a security.
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: ( NY TIME ZONE )
Pre market – Trading between 8:00 and 9:30 A.M.
Morning session (opening session) – Trading between 9:30 and 11:15 A.M.
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. (4PM LONDON)
Doldrums – Trading between 11:15 A.M. and 2:15 P.M.
Afternoon Session - Trading between 2:15 and 4:00 P.M.
After-hours – Trading between 4:00 and 8:00 P.M.
RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.
NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.
EARNINGS DISCLAIMER: EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES, IDEAS OR PRODUCTS PRESENTED. EXAMPLES PRESENTED ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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