Glossary

Above/below volume point of control:
It shows us the volume above or below the POC.
Mentioned in Contenders TPO series part 4: TPO meanings on 20. 5. 21 (6:53)

Average Candle Range:
It says what the average candle size is during the day.
Mentioned in Contenders TPO series part 4: TPO meanings on 20. 5. 21 (9:25)

Aggressive orders are when a trader executes the order to buy or sell at market. They take place when spreads and depths are relatively low and they remove liquidity.

Automatic rally (refer to the WYCKOFF accumulation):
It occurs because of intense selling (SC). It does not take a lot of buying pressure for the price to rally up. It is also fuelled by shorts covering.

Automatic reaction (refer to the WYCKOFF distribution):

A very sudden and very sharp price retracement (usually) back to the area of PSY. It is big and unexpected and it happens on high sell volume. Mentioned in Champion’s live stream on 24. 5. 20 (4:25).  https://portal.chartchampions.com/video-library/champions-livestream-54

All-time high:

An asset reaches its highest value ever recorded.

Daniel explains how to find targets for ATH in Contenders Fibonacci part3 – fib expansion + how to interpret ‘trading updates sheets’ stream on 13. 11. 19 (21.12)

All-time low:

An asset reaches its lowest value ever recorded.

Daniel explains how to find targets for ATL in Contenders Fibonacci part3 – fib expansion + how to interpret ‘trading updates sheets’ stream on 13. 11. 19 (21.12)

Average True Range:

An indicator that measures volatility. It shows how much price moves on average during a certain TF. Daniel uses it for stocks.

Daniel mentions ATR in the Contender’s Indicators stream on 16. 10. 19 (31.52)

It is an ADVANCED method because you are adding to a losing position as you are presented with another setup. Daniel usually closes trade on break even after a bounce and reviews it. If he sees it is a good trade, he enters again with a fresh mind.

Backtesting evaluates the viability of a trading strategy by discovering how it would play out using historical data.

Bollinger Bands:

An indicator developed by John Bollinger.

Bollinger Bands are composed of three bands: upper and lower band and a simple moving average in the middle. Bands measure deviation – they tighten together when the market is quiet and widen when the market is volatile. They determine oversold (buying opportunity) and overbought (selling opportunity) levels.

Buying climax (refer to the WYCKOFF distribution):

Buying volume reaches a climax (retail buying). There may also be some very bullish news accompanying this occurrence.

Break even:

Neither a loss nor a win. 

A bear market occurs when the price is continuously declining over a longer period of time. Price is making lower highs and selling pressure is bigger than buying pressure. 

During a bear market, the general sentiment of the market is pessimism and fear among investors, leading to a decrease in demand for assets and ultimately a decline in their prices. This can be caused by various factors, such as economic slowdowns, political uncertainty, rising interest rates, or negative news about a particular asset or sector.

A bull market is the opposite of the bear market  when the price is continuously inclinesg over a longer period of time. Price is making higher highs and buying pressure is greater than selling pressure. 

A bull market is a financial market characterized by a period of rising prices. In the context of cryptocurrency, a bull market is a period of time during which the prices of many assets are on the rise (20% or more), often driven by increased demand and positive market sentiment.

During a bull market, investors and traders may be more likely to buy and hold onto their cryptocurrencies, as they expect the prices to continue to rise. This can lead to further price increases, as more demand drives up the price. 

Buying tail:

It is formed at the low of the TPO profile and signifies that a larger trader stepped in quickly to reject the price.

Covered in Contenders TPO series part 5: Single prints on 16. 6. 21 (16:40)

Bitcoin:

The first decentralised, digital cryptocurrency that enabled peer to peer payments to anyone and anywhere in the world, without the need for a central authority, meaning a permission-less system.  It was developed in 2009 by Satoshi Nakamoto, an unidentified person or group.

Bitcoin is based on a distributed ledger technology called blockchain, which records in blocks and verifies all transactions linked together in a chain, forming a transparent and secure record of all activity on the network.

Bitcoin is not controlled by any government or centralized institution. Instead, it is supported by a network of computers that validate and secure transactions, and can be used to store value and transfer funds worldwide. 

Backup (WYCKOFF accumulation):

Old highs of AR are being tested, price flips the resistance into support and moves up higher.

Mentioned in Contenders live trading stream on 17. 12. 19 (25.46)
Briefly explained in Champions live stream on 22. 12. 19 (41.48)

It is a sign that is falsely showing a decreasing trend in an asset has reversed and is now heading upwards, when in fact it will continue to decline.

Champions Channel:

The Fibonacci ratios between .618 and .66

Trading education service that provides content for traders and is known for his fib range as CC.

Chart Champions Value setup or the 80% rule:

Is valid when the market opens outside the previous day’s VAH or VAL but then becomes accepted back into the VAH or VAL. The acceptance back inside the VAH or VAL is classed by two consecutive 30-minute candle closes. In that situation, there is an 80% chance for the price to touch the previous day’s VAL or VAH.

Explained in Contenders 57 on July 2, 2020

Chart Champions Wizardry:

A really good system to remove emotions. Recommended for beginners.

When you are already in a trading setup and then another setup presents within the setup. If you take it, it means you compound into your current position. You would take this trade regardless – it is a trade itself.

Covered in Contenders Compounding, averaging down and laddering stream on 24. 7. 19 (24:34)

Price is moving in a sideways range. It is a natural pattern from which it can break up or down through the continuation of a trend is favoured.

Commitment of traders

A weekly sentiment report that can provide traders with important information on the positioning of different trading pairs.

Chart of the week:

A “Skill Sharpener” exercise created to help Contenders and Champions learn how to identify high probability trade setups.

You have to identify the setup before the next Live Stream. You can post it in the Discord channel along with your details of why you would take the trade and where would you put your entry, exit and stop loss

Crypto Twitter

A part of Twitter, where users predominantly talk about cryptocurrency and trading.

Cumulative Volume Delta:

It is the running total of the delta. CVD is adding and removing delta together – transactions occurring on the ask (buy) are added to the total, and those occurring on the bid (sell) are subtracted from the cumulative total.

Dollar-Cost Averaging:

This is a strategy for investors – they place a certain (fixed) dollar amount into an asset on a regular basis (for instance every month)

Dead Cat Bounce:

A small, temporary recovery in a price of a declining asset. It is the most common retracement in a bear market.

Delta is a sum of aggressive trades. It shows us who was in control during that candle. 

To calculate the delta of a price we subtract the sells from the buys. Delta is either positive or negative, it helps us confirm the breakout instantly.

Covered in Contenders volume part 7 – Delta stream on 20. 5. 20 (12:20)

Decentralised Exchange:

Decentralised exchanges are cryptocurrency exchanges that operate without a central authority. Trades occur directly between users (peer-to-peer) through an automated process

Depth of Market:

It is a list/window that shows how many open limit buy and limit sell orders there are at different prices in real-time. Depth of Market measures the liquidity of a particular market.

It occurs when the price gets acceptance into a larger row of SPs between two distribution profiles. Double distribution cannot occur on the same day, but it can occur the next day or up to one week after.

Covered in Contenders Ledges + DD setups stream on 23. 6. 21 (9:50)

A downtrend is a series of lower highs and lower lows.

Daily point of control

See POC

Daily value area high

See VAH.

Daily value area low

See VAL

Do your own research

A term used to warn people; not to blindly follow other investors and traders, but to analyse and research an asset themselves.

Exactly as predicted

A Chart Champions abbreviation that’s used when a trading plan results in a complete win.

Exponential moving average

An exponential moving average measures trend directions over a period of time. It is a type of moving average that places a greater weight and significance on the most recent data points. 

It is a lagging indicator.

Contenders Exponential moving average strategy on 22. 5. 2019 (20.30)

Equilibrium:

Equilibrium is the state in which market supply and demand balance each other.

Elliott Wave;

Elliott Wave theory is a theory developed by Ralph Nelson Elliott. He believed that stock markets (also applies to any other market) traded in repetitive patterns. He realised that stock prices move in waves and he also recognised the “fractal” nature of markets and he analysed them in great detail. He discovered price patterns and began to look at how these repeating patterns could be used as predictive indicators of future market moves.

EW are very complex.

Fundamental analysis:

It is a method used by investors and traders to assess the intrinsic value of an asset by examining its most qualitative and quantitative factors.

Fully Diluted Valuation in crypto

Fully diluted valuation (FDV) is the total value of a cryptocurrency project considering all of its tokens that are in circulation. It is used by investors to gauge the future potential of the project, just like the total number of issuable shares in the stock market.  

Key Takeaways

1. Fully diluted valuation (FDV) is the total value of a cryptocurrency project assuming all of its tokens are in circulation.
2. The total supply of tokens may change due to the minting of new tokens, or due to token burning, which removes tokens from circulation. 
3. FDV is calculated using the formula Token Price X Total Supply, which gives a projection of the cryptocurrency’s market cap when all tokens are in circulation.

Fully diluted valuation is a statistical representation of the maximum value of a cryptocurrency project, assuming all of its tokens are already in circulation. It gives investors a view of the project beyond the given point.

For most cryptocurrency projects, the total token in circulation could vary constantly. Total tokens in circulation increase as more tokens are generated through mining, rewards for staking or providing liquidity, the release of vested tokens, or minting of new tokens. For deflationary tokens, total tokens in circulation decrease as tokens get  burnt.

The practice of releasing a small portion of the maximum supply of its token at launch is becoming more popular in the crypto space. With a relatively small number of tokens in circulation, these projects are presumed to be ‘undervalued’ considering the current market cap and fundamentals.

As more and more tokens are released and introduced into the market, the value per token may start to drop if there isn’t a relative increase in demand. Investors who fail to consider these future supply changes might suffer losses as more tokens are sold into the market. The FDV is a simplified mathematical expression that presents data that averts this scenario.

REFERENCE:

https://www.coingecko.com/learn/what-is-fully-diluted-valuation-fdv-in-crypto

Fear of missing out:

Fear of missing out happens to many (especially newer) traders who do not have a strict discipline with taking trades. The Crypto market is often driven by emotions rather than rationality, so FOMO is a huge issue in trading. Missing the profit you might make if you don’t buy a coin instantly, regardless of its current price and the feeling of missing out could lead to entering trades without any thought.

One should always have a trading plan, a clear point of entry, a clear point of invalidation, and clear take profit areas.

A fractal is a price action similar to a previous movement.

Covered in Contenders Fractal stream on 24. 3. 21 (5:07)

Fear, uncertainty, and doubt:

FUD is believed to cause a drop in the price of a ‘targeted’ asset. Very often the bad news is not even grounded in reality.

FAIR VALUE GAP:

FVG in trading means the gap or difference between the current value of an asset or currency and its fair value due to inefficiency or imbalance in the market. It can be used as a target or trade entry level.

Types of fair value gaps: Based on fair value difference, the FVG is categorised into two types:

i) Undervalued FVG
ii) Overrated FVG

Golden pocket:

The Fibonacci ratios between .618 and .66

Explained in Contenders Fibonacci part1 – retracements stream on 30. 10. 19 (41.47)

Good till Cancelled:

A type of order (buy or sell) that remains active until either being filled or being cancelled by the trader/investor.

Higher high:

Price forms a high that is higher than the previous one.

Higher high:

Price forms a high that is higher than the previous one.

A play on the word ‘hold’.:

Hold On for Dear Life: Some people believe in certain assets so much that they buy/accumulate a position and have no intention of selling it any time soon.

Head and shoulders

It is a top reversal pattern that consists of three peaks – the outside two are about the same in height and the middle one is the highest.

Covered in Contenders Head and shoulders patterns stream on 10. 7. 19 (18.11)

High time frame

A 4 hour + time frame

High volume cluster

An area where a large amount of volume has traded.

Covered in Contenders Volume Part 3 – VPVR stream on 8. 4. 20 and other volume series

High volume node

An area where a large amount of volume has traded.

Covered in Contenders Volume Part 3 – VPVR stream on 8. 4. 20 and other volume series

Initial Balance

The price range in the first hour of the market open.

Initial balance low

See IB

Mentioned in Contenders TPO series part 4: TPO meanings on 20. 5. 21 (9:19)

They are used by really good traders to fill their very big positions. It will only show part of the order visible – the order is bigger than it looks like (it keeps on getting refilled). You want to get the order filled with nobody knowing.

Covered in Contenders: Order-book stream on 31. 3. 21 (4:14)

Inverse head and shoulders

It is a bottoming pattern after a big sell-off that consists of three peaks – the outside two are about the same in height and the middle one is the highest.

Covered in Contenders Head and shoulders patterns stream on 10. 7. 19 (31.10)

In-the-money option

A call (put) option whose exercise price is below (above) the current price of the underlying asset..

International trade management

You place multiple buy or sell orders when wanting to enter a trade setup and get an average entry price.

Covered in Contenders Compounding, averaging down and laddering stream on 24. 7. 19 (41:04)

Ledges are the same as poor highs and poor lows but formed inside of the TPO chart. Two or more TPO blocks at the same price create a ledge

Lower high

Price forms a high that is lower than the previous one.

Liquidity refers to the ease with which an asset can be converted into ready cash without affecting its market price. Liquidity is extremely important without it you lose money.

We cover this in one of our modules plus in our strategy modules 

https://tradetoprospa.net/understanding-liquidity/

Lower low

Price forms a low that is lower than the previous one.

London Open

Is defined by the trade direction
> Long = when price goes up and you profit from it. Likewise, Short is when price goes down and you profit from it.

Last point of support (WYCKOFF accumulation)

After ‘jumping across the creek’ price retraces, flips resistance into support and bounces up showing SOS.

Mentioned in Contenders live trading stream on 17. 12. 19 (25.46)

Briefly explained in Champions live stream on 22. 12. 19 (41.48)

Last point of supply (WYCKOFF distribution)

Price rallies from support (usually SOW) into resistance on declining volume. Demand is weakening, LPSY represents the exhaustion of demand. Price will not reach the previous high (resistance area) due to weakness.

Mentioned in Champions’ live stream on 24. 5. 20 (4.25)

Lower time frame

A 1 hour or lower time frame

Low volume cluster

An area where a small amount of volume has traded.

Covered in Contenders Volume Part 3 – VPVR stream on 8. 4. 20 and other volume series

Low volume node:

An area where a small amount of volume has traded.

Moving average:

A very popular indicator used by many traders. Moving average is a lagging indicator because it is based on (calculations from) past prices. It can help identify trend direction and can act as a support or resistance.

Moving average convergence/divergence

MACD is a trend-following momentum indicator that shows the relationship between two moving averages of price. It is calculated by subtracting the 26 EMA from the 12 EMA. It is designed to reveal changes in momentum, strength, direction and duration of a trend in an asset’s price.

Market maker:

An individual, financial institution, or exchange that quotes both a buy and a sell price of an asset to provide a measure of liquidity.

Monthly point of control mPOC

See POC.

Market structure:

Market structure is the support and resistance level on the charts, swing highs, and swing lows. These are levels which are easily identified. It is a trend-following tool that traders read and follow based on how the asset moves. It can be bullish or bearish.

Monthly value area high

See VAH.

Monthly value area low

See VAL

This is where a POC from the previous session (24 hour periods for Crypto) has not been tapped. It generally gives a bounce when approached for the first time, but as always look for confluence.

Naked Point of Control nPOC

This is where a POC from the previous session (24 hour periods for Crypto) has not been tapped. It generally gives a bounce when approached for the first time but as always look for confluence.

Order block

Order block is a different way to look at supply and demand. It is the initial opposite move before the trend resumes making new highs or lows.

On balance volume:

OBV is the cumulative total of positive and negative volume. It is a leading indicator – volume leads price. OBV can be used for identifying divergences at the tops and bottoms.

Order flow:

Order flow is a form of data of the contracts sold and bought at a certain price that moves prices up and down.

Open interest

Open Interest represents the total number of contracts, including both net longs (buy) and net shorts (sell) positions.

Out-of-the-money Option:

A call (put) option whose exercise price is above (below) the current price of the underlying asset. OTM is the most aggressive options trading method with an extremely high profit and risk potential.

Price action

Price action is a trading technique that consists of analysing basic price movement across a time frame. PA traders read the market and make subjective trading decisions based on the recent and actual price movements.

Passive orders add liquidity to markets. They are limit, bid(buy), and ask(sell) orders which usually are not immediately executed.

Previous day Equilibrium – pdEQ

0.5 fib retracement from the previous day’s swing high to swing low. 

Previous day point of control pdPOC

See POC.

Previous day value area high pdVAL

See VAH.

Previous day value area low pmVAL

See VAL.

Previous month point of control pmPOC

See POC.

Previous month point of control pmPOC.

See POC.

Previous week value area low
See VAL

Rotation factor 

Each 30-minute column is given a score of +1 or -1, and the rotation factor is the overall number which shows us which way the market attempted to push.Mentioned in Contenders TPO series part 4: TPO meanings on 20. 5. 21 (30:02)

Risk:Reward
The risk to reward ratio shows how much profit a trader can potentially make if the trade turns into a winner, and how much a trader can lose if the trade turns into a loss. The R:R ratio should be at least 2:1, preferably 3:1.

Relative strength Index:

It is a lagging indicator used to measure the strength or weakness of an asset. RSI is based on the closing prices of a recent trading period.
Also refer to Stochastic RSI

Satoshi

The smallest sub-unit of Bitcoin. 1 Satoshi = 1/100,000,000 of a Bitcoin

Selling climax (WYCKOFF accumulation)

Heavy selling (especially by retail) occurs that is suddenly absorbed by professional interest. It does not require a lot of volume to push the price back up (AR).

Selling climax does not always have to occur on high sell volume though but it is better if it does.

A trading style that specialises in profiting off small price changes in a short period of time. It requires discipline and focus and good knowledge of TA.

Securities and Exchange Commission

The mission of the SEC is to protect investors, maintain fair, orderly, efficient markets, and facilitate capital formation.

Swing failure pattern

Price takes out the high and closes back below the high OR price takes out the low and closes back above the low = SFP (it can be bullish or bearish)

Short refers to the type of trade and its direction.
Short = when price goes down and you profit from it.

In finance and trading, “short” or “shorting” refers to the practice of selling an asset, typically a security like a stock, that the seller does not own at the time of the sale. Instead, the seller borrows the asset from someone else (usually a broker or another investor) and agrees to return it at a later date. The goal of short selling is to profit from a decline in the price of the asset.

Here’s how short selling works:

1. Borrowing the Asset: The trader or investor who wants to short an asset first borrows it from another party. This is typically done through a brokerage firm, which facilitates the borrowing process.

2. Selling the Asset: Once the asset is borrowed, the trader sells it in the open market. They receive the sale proceeds in their account.

3. Waiting for a Price Decline:*The trader hopes that the price of the asset will decrease in the future. If the price does indeed drop, they can buy the asset back at a lower price.

4. Buying Back and Returning: To close the short position, the trader buys back the asset at the lower price and returns it to the lender. The difference between the initial sale price and the purchase price represents their profit (or loss, if the asset’s price has risen).

Short selling is often used for various reasons, including:

– Profit from Price Declines:Traders short sell to profit from falling prices. If they believe an asset is overvalued or anticipate a downturn in the market, shorting allows them to benefit from the expected decline.

– Hedging: Investors may use short positions to hedge against potential losses in their long (owned) positions. Shorting can help offset losses in a falling market.

– Arbitrage: Traders may short an asset on one exchange while buying it on another exchange where it’s priced differently, aiming to profit from the price difference.

-Market-Making: Some market makers use short positions to facilitate liquidity and smooth out price fluctuations.

It’s important to note that short selling involves significant risks and potential losses. Unlike buying a stock where the maximum loss is the initial investment, the losses in short selling can be unlimited if the asset’s price rises significantly. Traders engaging in short selling must be vigilant, have a clear exit strategy, and often use stop-loss orders to limit potential losses.

Short selling is subject to regulations and may not be available for all assets or in all markets. Additionally, short selling can impact market dynamics and contribute to price volatility, which is why it is closely monitored and regulated by financial authorities.

A short position is a trading strategy in which an investor sells a borrowed asset, such as a cryptocurrency or stock, with the expectation that the price of the asset will decrease in value. Investor hope to buy back the asset at a lower price and return it to the lender, thereby profiting from the difference in price.

In order to hold a short position in crypto, investors must have access to a crypto exchange or trading platform that offers margin trading or derivatives like futures or options. Then, after borrowing crypto from the exchange or other platform users, they can sell it on the open market and watch for a price drop.

Stop loss

A “stop loss” is a risk management tool used by traders to limit potential losses on a specific trade. A stop-loss order is placed to buy or sell an asset when the asset reaches a certain predetermined price to close a losing position or a percentage level below the current market value. It is a must in trading. Literally, no one only wins all trades, losses are a very natural part of trading. There should be a clear invalidation and SL should ALWAYS be placed.

The purpose of a stop-loss order is to protect traders from significant losses in case the market moves against their position. When a trader sets a stop-loss order, they are defining the maximum amount of loss they are willing to tolerate on a trade. If the market price reaches or falls below the specified stop-loss level, the exchange executes the sell order, limiting the trader’s losses to the predetermined amount. 

Hard stop loss – it is placed in an order book (mandatory for beginners and intermediate traders.

Soft stop loss – it is only mental stop loss (requires discipline, only for professionals)

A “hard stop-loss,” also known simply as a “stop-loss,” is a predefined price level set by a trader or investor to limit potential losses on a position. When the market price of an asset reaches or breaches this specified level, a hard stop-loss order becomes a market order and is automatically executed. The purpose of a hard stop-loss is to help manage risk and prevent significant losses in a trade or investment.

Here’s how a hard stop-loss works:

Setting a Price Level:  A trader determines a specific price level at which they are willing to sell an asset to limit potential losses. This price level is often based on technical analysis, risk management principles, or the trader’s strategy.

Placing the Order: The trader places a stop-loss order with their broker or trading platform. The order includes the asset to be sold, the stop-loss price, and the quantity to be sold if the stop-loss is triggered.

Automatic Execution: When the market price of the asset reaches or falls below the specified stop-loss price, the stop-loss order becomes a market order and is executed immediately. The asset is sold at the prevailing market price, which may be lower than the stop-loss price if there is a gap or rapid price movement.

The primary advantages of using a hard stop-loss include:

Risk Management: It helps traders and investors limit potential losses and protect their capital.

Discipline: It enforces a predetermined exit strategy, reducing the emotional aspect of trading decisions.

Automation: Once set, a hard stop-loss order does not require continuous monitoring and will be executed automatically when needed.

However, there are some important considerations when using hard stop-loss orders:

Slippage: In fast-moving markets or during gaps in trading, the execution price of a hard stop-loss may differ significantly from the stop-loss price.

Whipsaws: A market may briefly dip below the stop-loss level and then reverse, triggering the stop-loss order before recovering. This can result in exiting a position prematurely.

Market Orders: Once a hard stop-loss is triggered, it becomes a market order, meaning it is executed at the prevailing market price. In highly volatile markets, this can result in a less favorable execution price.

Traders should carefully consider their risk tolerance, market conditions, and trading strategy when setting hard stop-loss levels. It’s essential to strike a balance between setting a stop-loss that’s too tight, which can lead to premature exits, and one that’s too loose, which can result in larger losses. Additionally, some traders may use trailing stop-loss orders that automatically adjust as the market price moves in their favor to capture profits while still limiting potential losses.

When something drops quickly and there is low liquidity. For instance, have SL set at 5% but you get filled at 25%. Your loss is very big = rekt.

Simple Moving Average

It is basically the average price over the specified period with equal weighting given to the price of each period.

You do your TA and know the level you’d like to buy. When the price comes to that level you check the order book to see if people are buying here, are people stacking their bids and if the asks are simultaneously getting removed. It is a very fast occurrence so you have to know what you are looking for and react very quickly.

Sign of Strength (WYCKOFF accumulation)

Price moves up with an increase in volume showing strength.

The “Sign of Strength” (SOS) is a term often associated with the Wyckoff method of technical analysis, specifically within the context of Wyckoff accumulation. The Wyckoff method, developed by Richard D. Wyckoff, is a trading and investing approach that focuses on analyzing price and volume to identify potential market trends and reversals. Within this method, the Sign of Strength is an important concept.

The Sign of Strength typically occurs during the accumulation phase of a market, which is a period when smart money (informed, large-scale investors) is accumulating an asset while the general public is still skeptical or bearish. The SOS is a bullish signal and suggests that a potential uptrend is likely to follow. Here are the key characteristics of a Sign of Strength:

1. Higher Highs and Higher Lows: During the accumulation phase, the price of the asset may have been moving in a range or forming lower lows and lower highs. The Sign of Strength marks a significant shift in this pattern. It is characterized by the formation of higher highs and higher lows, indicating that buyers are gaining control.

2. Increased Volume: A crucial aspect of the SOS is an increase in trading volume. As the price makes higher highs and higher lows, the accompanying volume should also expand. This increase in volume suggests that there is strong buying interest behind the price rise.

3. Resistance Breakout: The Sign of Strength often involves breaking through a key resistance level, which was previously acting as a barrier to upward price movement. This breakout signifies that buying pressure has overwhelmed selling pressure.

4. Confirmation: To validate the Sign of Strength, traders often look for confirmation through continued bullish price action and volume. If the price continues to rise with strong volume and maintains the higher high and higher low pattern, it provides additional confidence in the bullish trend.

5. Backing Up Action (BU): Following the Sign of Strength, there is typically a period known as “Backing Up Action” (BU). During this phase, the price may retrace to test the previous resistance (now turned support) or consolidate before resuming its upward move. The BU phase helps confirm the strength of the accumulation.

Traders and investors who follow the Wyckoff method use the Sign of Strength as an entry signal, suggesting that it may be an opportune time to initiate long positions. However, it’s essential to use other technical indicators, risk management strategies, and consider the broader market context when making trading decisions, as no single indicator or pattern is foolproof, and false signals can occur.

Sign of weakness (WYCKOFF distribution)

In the Wyckoff method of technical analysis, the “Sign of Weakness” (SOW) is a key concept that is associated with the distribution phase of a market. The Wyckoff method, developed by Richard D. Wyckoff, is a trading and investing approach that focuses on analyzing price and volume to identify potential market trends and reversals. The Sign of Weakness is a bearish signal that suggests a potential downtrend may follow during the distribution phase.

Single Print

They are like a wick on a candlestick but in the middle of the price action

In the context of market analysis, “single prints” are a term often used in reference to market profile charts, a graphical representation of price and volume data that provides insights into market behavior and structure. Single prints are specific price levels within a market profile that did not experience trading activity during a particular trading session. They are notable because they represent price areas where there was a lack of trading interest or volume.

Here’s a more detailed explanation of single prints:

1. Market Profile: A market profile chart consists of a histogram that represents the volume of trades that occurred at different price levels during a specific trading session. It also includes a letter-based time histogram, which shows the amount of time the market spent at various price levels.

2. Single Prints: When a market profile shows a price level with a single vertical bar (or a letter in the time histogram) and no other bars or letters in that price area for a specific trading session, it is considered a single print. This means that there was only one trade (or very few trades) at that particular price level during that session.

3. Significance: Single prints can be significant because they often represent areas of price discovery or areas where the market moved rapidly through without much trading activity. Traders and analysts may view single prints as potential areas of interest in future trading sessions because they may act as support or resistance levels, depending on whether they are above or below the current market price.

4. Market Behavior: Traders who use market profile analysis may pay attention to single prints as they can provide clues about the market’s behavior and where price acceptance or rejection may occur. If a market revisits a single print area and finds significant trading interest, it can lead to price consolidation or reversals.

Single prints are just one aspect of market profile analysis, and traders often use them in combination with other technical and fundamental factors to make trading decisions. They are particularly relevant for day traders and short-term traders who focus on intraday price movements and market structure.

A fake order – somebody places an order but has no intention to get it filled. When price comes to the order it disappears – you are fooling newer traders.

It is a difference between a buy and sell (for instance buy bid is 25$, sell ask is 26$ – spread is 1$). You do not want to trade something with a big spread because it means liquidity is low = you will lose money

Support/resistance

A price area where price finds enough demand to bounce or reverse = support.

A price area where there is a lot of supply and price finds it difficult to break through = resistance.

The more times they are tested the weaker they become.

Secondary test (WYCKOFF distribution)

Price revisits the area of BC, tests supply and support flips into resistance. After this flip price makes a new low.

Secondary test (WYCKOFF accumulation)

Price revisits the area of SC, tests demand and resistance flips into support. After this flip price makes a new high.

To rekt as much retail as possible price is pushed down again for another ST, price SFP the lows and bounces back up.

Adding to the order book limit orders

Covered in Contenders Order-book stream on 31. 3. 21 (4:14)

You only enter if the market moves in your favour (breakout), you get into the trade
Pros: Enter the trade with momentum
Cons: You might enter a false breakout

A strategy that attempts to force some traders out of their positions by pushing the price of an asset to a level where many would have chosen to set their stop-loss orders.

A “stop hunt” is a term used in trading to describe a situation where market participants intentionally drive the price of an asset in the direction that triggers stop-loss orders placed by other traders. The primary purpose of a stop hunt is to cause these stop-loss orders to execute, which can lead to a cascade of selling (or buying) and potentially create price spikes or sharp reversals.

Here’s how a stop hunt typically works:

1. Identifying Stop-Loss Orders: Traders often place stop-loss orders to limit their potential losses. These orders become market orders when the specified stop-loss price is reached or breached.

2. Intentional Price Movement: Traders or market participants who engage in a stop hunt intentionally move the price of the asset toward the price level where they suspect a concentration of stop-loss orders. This movement can involve a rapid and sharp price change.

3. Triggering Stop Orders: When the market price reaches the level of the stop-loss orders, they are executed as market orders. This often leads to a swift price movement in the direction of the stop hunt.

4. Profit for the Manipulators: The traders or entities conducting the stop hunt aim to profit from the price movement generated by triggering the stop-loss orders. They may buy (in the case of a bearish stop hunt) or sell (in the case of a bullish stop hunt) the asset at more favorable prices.

5. Market Reversal: After the stop-loss orders are executed and the stop hunt is complete, the market may revert to its previous direction, leaving traders who were stopped out at a disadvantage.

It’s important to note that stop hunts are considered a form of market manipulation and are generally frowned upon in the trading community. Such practices are unethical and can create mistrust in the market. Regulatory authorities and exchanges have implemented measures to detect and prevent market manipulation, including stop hunts.

To protect themselves from potential stop hunts, traders can:

1. Use Mental Stops: Consider not placing physical stop-loss orders in the market but rather monitor positions closely and manually execute trades when necessary.

2. Use Trailing Stops: Employ trailing stop orders that automatically adjust as the market price moves in your favor, reducing the likelihood of being stopped out too early.

3. Avoid Obvious Levels: Avoid placing stop-loss orders at round numbers or obvious technical support/resistance levels where stop hunts are more likely to occur.

4. Diversify Trading Platforms: Consider spreading your trading activities across multiple trading platforms or exchanges to reduce exposure to potential manipulation on a single platform.

5. Stay Informed: Be aware of market news and events that could lead to heightened volatility and the potential for stop hunts.

Traders should always conduct thorough research and develop a risk management strategy to mitigate the impact of stop hunts and other market risks.

A style of trading where swing traders hold their position for longer than a day or even weeks.
Swing trader’s goal is to identify an overall trend and capture larger gains within it.

Technical analysis

Analysis that is based solely on analysing the chart with technical tools and indicators.

Time Frame

Take profit

Take profit is an order that you place to (partially) close your position once it reaches a certain level of profit. One can have multiple TP points.

Time price opportunity

It displays the amount of trading activity based on time, for each price level the market traded at for any given time period. The TPO profile chart study allows you to clearly see the areas where the market is trading at most of the time. Refer to the Exochart template or Tradingview’s beta script / indicator.

The TPO indicator computes and displays historical values for TPO Profile price levels; POC, Value Area High (VAH), Value Area Low (VAL), developing POC, VAH and VAL. It enables review these values historically to see how price reacted when approaching these values.

In our toolset, we use Exocharts to provide these levels.

Trading Range

Trading range occurs when an asset consistently trades between a certain high and low price for a good amount of time. The top of the range is resistance and the bottom of the range is support.

The general direction of a market or asset’s price, essentially, momentum.

TradingView

TradingView is a social platform for traders and investors. It is a very popular site for charting. There are free and paid programs, depending on one’s trading level and desires.

Time value area high

See TPO and VAH.

Time value area low

See TPO and VAL.

An uptrend is a series of higher highs and higher lows with price action.

Upthrust (WYCKOFF distribution)

Price takes the high of the first push up (BC) on the lesser buy volume.

Upthrust after distribution (WYCKOFF distribution)

Price goes above resistance and previous peaks in the distribution trading range. Price rises with conviction and can stay above resistance for some days or even weeks. When the price breaks down it heads back to the support area. After UTAD price becomes weak and breaks through support and into a confirmed downtrend.

UTAD occurs only occasionally

Value area high

The value area high is the highest price in the value area that is marked on the chart. It acts as a resistance when the price ranges within the range.

Value Area Low
The value area low is the lowest price in the value area that is marked on the chart. It acts as a support when the price ranges within the range.

Volume weighted average price

VWAP incorporates price and volume, it is an S/R line. When the price is above VWAP it is ‘above value’ and when it is below
VWAP is ‘below value’.

Weekly point of control

See POC

Weekly value area high
See VAH.

Weekly value are low. See VAL

Bitcoin ticker for some exchanges