LIST OF TERMS USED IN THIS BOOK xv
doji A candle with a small body or no body at all. On a 5 minute chart, the body would be only one or two ticks; but on a daily chart, the body might be 10 or more ticks and still appear almost nonexistent. Neither the bulls nor the bears control the bar. All bars are either trend bars or nontrend bars, and those nontrend bars are called dojis.
double bottom A chart formation in which the low of the current bar is about the same as the low of a prior swing low. That prior low can be just one bar earlier or 20 or more bars earlier. It does not have to be at the low of the day, and it commonly forms in bull flags (a double bottom bull flag).
double bottom bull flag A pause or bull flag in a bull trend that has two spikes down to around the same price and then reverses back into a bull trend.
double bottom pullback A buy setup composed of a double bottom followed by a deep pullback that forms a higher low.
double top A chart formation in which the high of the current bar is about the same as the high of a prior swing high. That prior high can be just one bar earlier or 20 or more bars earlier. It does not have to be at the high of the day, and it commonly forms in bear flags (a double top bear flag).
double top bear flag A pause or bear flag in a bear trend that has two spikes up to around the same price and then reverses back into a bear trend.
double top pullback A sell setup composed of a double top followed by a deep pullback that forms a lower high.
early longs Traders who buy as a bull signal bar is forming rather than waiting for it to close and then entering on a buy stop at one tick above its high.
early shorts Traders who sell as a bear signal bar is forming rather than waiting for it to close and then entering on a sell stop at one tick below its low.
edge A setup with a positive trader’s equation. The trader has a mathematical advantage if he trades the setup. Edges are always small and fleeting because they need someone on the other side, and the market is filled with smart traders who won’t allow an edge to be big and persistent.
EMA See exponential moving average (EMA).
entry bar The bar during which a trade is entered.
exponential moving average (EMA) The charts in these books use a 20-bar exponential moving average, but any moving average can be useful.
fade To place a trade in the opposite direction of the trend (for example, selling a bull breakout that you expect to fail and reverse downward).
failed failure A failure that fails, resuming in the direction of the original break- out, and therefore a breakout pullback. Since it is a second signal, it is more
LIST OF TERMS USED IN THIS BOOK xv
doji A candle with a small body or no body at all. On a 5 minute chart, the body would be only one or two ticks; but on a daily chart, the body might be 10 or more ticks and still appear almost nonexistent. Neither the bulls nor the bears control the bar. All bars are either trend bars or nontrend bars, and those nontrend bars are called dojis.
double bottom A chart formation in which the low of the current bar is about the same as the low of a prior swing low. That prior low can be just one bar earlier or 20 or more bars earlier. It does not have to be at the low of the day, and it commonly forms in bull flags (a double bottom bull flag).
double bottom bull flag A pause or bull flag in a bull trend that has two spikes down to around the same price and then reverses back into a bull trend.
double bottom pullback A buy setup composed of a double bottom followed by a deep pullback that forms a higher low.
double top A chart formation in which the high of the current bar is about the same as the high of a prior swing high. That prior high can be just one bar earlier or 20 or more bars earlier. It does not have to be at the high of the day, and it commonly forms in bear flags (a double top bear flag).
double top bear flag A pause or bear flag in a bear trend that has two spikes up to around the same price and then reverses back into a bear trend.
double top pullback A sell setup composed of a double top followed by a deep pullback that forms a lower high.
early longs Traders who buy as a bull signal bar is forming rather than waiting for it to close and then entering on a buy stop at one tick above its high.
early shorts Traders who sell as a bear signal bar is forming rather than waiting for it to close and then entering on a sell stop at one tick below its low.
edge A setup with a positive trader’s equation. The trader has a mathematical advantage if he trades the setup. Edges are always small and fleeting because they need someone on the other side, and the market is filled with smart traders who won’t allow an edge to be big and persistent.
EMA See exponential moving average (EMA).
entry bar The bar during which a trade is entered.
exponential moving average (EMA) The charts in these books use a 20-bar exponential moving average, but any moving average can be useful.
fade To place a trade in the opposite direction of the trend (for example, selling a bull breakout that you expect to fail and reverse downward).
failed failure A failure that fails, resuming in the direction of the original break- out, and therefore a breakout pullback. Since it is a second signal, it is more
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