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DEFINITIONS - TERMINOLOGY
The following explanations of selected trading terms are how I define them for use on my blogs. The ideas I present here may not always be in agreement with the conventional wisdom...for the most part they are based on my personal observations of the way markets function.
DEFINITIONS - TERMINOLOGY
The following explanations of selected trading terms are how I define them for use on my blogs. The ideas I present here may not always be in agreement with the conventional wisdom...for the most part they are based on my personal observations of the way markets function.
HH, HL, LH, LL - Higher High, Higher Low, Lower High, Lower Low
P/A or Price Action - description of price movements, i.e. a series of HH's & HL's describes an up trend
TLB - Trend Line Break, price moving above a down trend line (or below an up trend line).
TLB-ReTest - price returning to the level at which it broke a trend line
DIVERGENCE - Price going in one direction while an indicator or indicators do the opposite
These occur at bottoms: DIV or regular divergence...Price makes a LL while indicators make a HL
2xD - two indicator divergence...3xD - three indicator divergence
These occur in up trends: RD or REV DIV - reverse or hidden divergence...Price makes a HL while indicators make a LL
These occur at trend tops: Reversing Divergence ...Price makes a HH while indicators make a LH...
MOF - Money on the floor, a pull back that reverses before reaching a previous low...
(often it's the first HL that marks the reversal of a down trend)
Slingshot - describes a pattern in the stochastic indicator, usually from the over-sold area.
SLING - a continuation slingshot ... usually referring to one that suggests the continuation of a new trend or an established trend.
MACD X - The point where the MACD EMAs can be seen to cross each other
MAC Trend or MT- Refers to the short term or long term direction of the MACD EMAs
BZ or Brach Zone - A method using the 61.8% and 78.6% Fibonacci levels to describe potential target and reversal areas
2B Dragon or 2B - A specific double bottom pattern characterized by features of the mythical creature...
Starting at the upper left hand side of a chart:
A 'Top-of-Tail' followed by 'rear feet and front feet' with a 'hump' in between
followed by a consolidation area that defines the Dragon's 'head'
Other Double Bottom patterns:
BAT WING - A consolidation pattern that usually forms in up trends...These can be either bullish or bearish.
Sometimes they mark current trend continuations and at other times they mark tops before reversals.
They are a fun pattern that describes Price Action after the fact...they are not used for entering trades
PRANCING Pony - Another fun name for a particular reversal pattern that forms within a diamond.
I was inspired to name it after a Joni Mitchell tune...A more in depth description is available here
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Sharpshorts Day Trading...(Main blog)
Everything related to Trading for a Living, not a killing
I post short reviews of the day's market action, chart links and miscellaneous thoughts related to my trading
PRICE ACTION & DEFINITIONS
Descriptions of trading terms including: Price Action, Trends within Trends, Short Term Trading...
Reason vs. Rationalization, Discretionary Trading and Indicator Divergence.
RECORD KEEPING & STATISTICS
Spreadsheets including Daily & Monthly Trade Logs, Projection Workbook and Tax form...
AND how to create them using Freeware Office programs.
Also an Image Capturing program from Gadwin Systems.
MOF and SLINGSHOTS ---- 2B DRAGONS ---- BRACH ZONE
Definitions of regularly repeating patterns that occur on charts
of any market and on any time frame.
PUTTING IT ALL TOGETHER
A summary of how I trade using all the tools described..
Sharpshorts Daily Trade Results...(2nd blog)
Home Page and Introduction - A simple Trade Set Up -- My trading method in a nutshell.
Daily trade charts, comments with pages grouped by month
Monthly , weekly and/or daily charts...Updated once a month or so...
and daily Trade Chart Archives going back to 2013
