# back to top

200DMA

The 200 period Simple Moving Average on the Daily.

34EMA Wave

The 34 period Exponential Moving Average on the high, the close, and the low.

A back to top

Aggro

Aggressive.

B back to top

Baby Bear:

A balance between Price Movement Range Volatility (Shock Absorption) and Proximity to Entry.

"BTG" (Between the Greens)

The "greens" being the 13 and 21 period EMAs on the close.

Book (or Trading Book)

It's usually an institutional portfolio. For me: All the positions I have open.

Breadcrumb(s)

Recent or Near-Term or Previous highs and lows. Where has the market been?

Break Even or BE Stop Loss

A stop loss order that represents none to limited risk of your capital if hit.

Building Block (time frames)

The five and 15-minute charts. Used to confirm price level reaction for typically a longer-term trade entry.

C back to top

Carry Trade

It should be thought of as "a trade with a carry". The "carry" is the interest differential. Typically between the JPY and a higher interest rate currency. If you sell or "borrow" the JPY and use the borrowed funds to purchase a higher yielding asset, then that's a carry. It works BEST when the JPY is weak and the base currency strong.

Catch the Wick

Eludes to "wick" of a candlestick. Catching the wick implies exhaustion on a volatility event (think: economic calendar) and the support or resistance that would be tested. That support or resistance can be breadcrumbs OR is could be based on PMR (daily or hourly).

Chop. Congestion

Volatile sideways price movement. "Chop & Slop" Even more volatile sideways price movement. Usually Distribution. A "two to four o'clock" 34EMA Wave angle.

CISL

"Sizzle" Cheated-In Stop Loss. Always optional.

Clarity aka Clarity Criteria

Measuring the 34EMA Wave Angle for 1) Smoothness 2) Established 3) Respected (applicable on a correction of trend) "Do I need to see "x" number of candles to confirm Clarity?" No. There's no set number we're looking for RATHER it's the culmination of steady green or red GRaB candles for non-trend (consolidation) we want to see steady blue and for congestion a mix of red, blue, and green. THEN you qualify the emerging trend in stages: fresh trend, young trend, (these first two are vulnerable or the "two V's" which is vulnerable and volatile), and established.

"Classic Swing Zone"

The zone of entry for a buy between the 20 SMA/C and the 34 EMA/H or the zone of entry for a short between the 20 SMA/C and the 34 EMA/L.

"Coiled Spring"

Narrow Sideways Channel. More of frequency of blue GRaB candles. A more defined ceiling and floor preferably "solid" (under five pips/point/ticks of variance between the highs or lows)

Comm Dolls (or Commodity Currencies)

Individual currencies whose country's economy relies on producing/exporting commodities like gold, crude, natty gas, lumber. e.g. AUD, CAD, NZD

Common Level

A level that has been both support and resistance. "The bulls and bears or the buyers and sellers have something common." Goes back to Charting 101: What was once support becomes a consideration for resistance and vice versa.

"Conservative Swing Zone"

Moving from the Point of Validity to (usually) the 34 EMA/C.

D back to top

"Death Cross"

On a daily time frame, the 50 period SMA on the Close crossing DOWN through the 200 period SMA on the Close.

Decision Level

Support and Resistance levels where we expect a "reaction".

Directional Bias or DB

A trend on the daily time frame.

"D.B. Scan"

Scanning across DAILY TIME FRAMES looking for CLARITY (think: the three Clarity Criteria) via 12-2 to 4-6 o'clock 34EMA Wave angles. In this phase of TRIAGE do not distract yourself with the intraday time frames! This is how we create our Watchlist.

Dissecting

Looking at a pair's individual currencies to see which is weak and/or strong and the data/fundamentals/psychology that affects each INDIVIDUALLY. (related Harmony, Driver, Individual Currency Story)

Distribution Fade (Buy or Sell)

Selling into a resistance area or ceiling or Buying into a support area or floor within the context of a two to four o'clock Wave.

Driver

Related to the Individual Currency Story and is the MAIN reason we are long or short a pair and it's the driver that's expected to create most of the follow-through or as I say "the heavy lifting."

E back to top

Eject Button

A time based exit.

F back to top

Five versus Six Candle Week

The reality forex traders face in that this off-exchange market can be represented on the daily time frame with a Sunday candle or no Sunday candle thus leaving some charting platforms with a six candle week and others which combine Asia's "Sunday" open with Monday leaving a five candle week. This applies most notably to 200 period SMA on the daily aka 200DMA.

Finish Line Profit Target

Targets that are proactive exits with pending/parked orders.

Footrace

A pair whose individual currencies are moving together. e.g. A "footrace" in the USD/JPY would be seeing competitive (and sometimes simultaneous) weakness or strength.

Fuel in the Tank or Fuel Left in the Tank

How much of the daily PMR has the market already moved? Daily Price Movement Range - Current Price Price Movement Range = Fuel

G back to top

"Golden Cross"

On a daily time frame, the 50 period SMA on the Close crossing UP through the 200 period SMA on the Close.

GRaB Candle(s)

"Green Red and Blue" A traditional Japanese candlestick but with color coded "paintbars" that work with the 34EMA Wave. The lighter shade of green, red, or blue is an up candle while the darker shade is a down candle. The candles plot green is price action is above the 34 period EMA on the high, plots red if price is below 34 period EMA on the low, and blue in between the the 34 period EMA high and low.

Gravitational Pull

A level that is neither or resistance, usually a major psychological level that price cannot "escape" from in other words can't get too far below or above.

Guidance Trade

A confirmational trade of an existing position. Trade that you may not take, but the set up is valid, and it's basically confirmation of sentiment and momentum for a trade that you're already in.

Guillotine Syndrome

"nobody wants to stick their neck out" The sideways consolidation, range, "wait and see" effect where traders are not willing to move the markets significantly in front of a major economic or geopolitical event. (also tall poppy syndrome).

H back to top

Harmony

When you more than one entry in a specific individual (e.g. multiple EUR entries) you *typically* want to be in the same position in all of them (e.g. long EUR in EUR/USD, EUR/CAD, etc.) therefore avoiding basically hedging yourself. However this MAINLY applies to the DRIVER currency.

Heat

Unrealized losses. Sometime referred to as "pain". The price area between our entry(s) and the stop loss.

House Money

Unrealized Gains/Profits.

Hybrid

Two trades with similar entry zones in the same direction on two different time frames.

I back to top

Individual Currency Story (ICS)

Separating a pair into the two currencies and examining each currency's story/fundamentals.

J back to top

Jackhammer

An exhaustion at support or resistance at range lows or highs because price action remains at the levels "jackhammering" away at the bid (buyers) or the offer (sellers).

M back to top

Mojo (see also Swagger)

Higher highs on the daily in an uptrend. Lower lows on the daily in a downtrend. Implies the psychology and attention a new high or low (especially 52 week) has on the market.

Momo

Slang for momentum (an old daytrading term) but also a momentum entry.

Momentum Trade

Breakout or Breakdown from consolidation or three o'clock Wave

Musical Chairs (of getting your order filled)

Getting a fill at a populated/popular price level is like a game of musical chairs, everybody is scrambling to get their butt on chair (that means get their order filled) and some folks are just going to be landing on floor...someone's going to be left out. TO AVOID EVEN PLAYING THIS RIDICULOUS GAME: See "Stepping out in front of size"

MVP

Acronym for Minimum Margin Requirement, Volatility, Pip Price Value.

N back to top

No Man's Land

The price area between our profit target and the stop loss.

P back to top

"Park" or "Park an Order"

Place the limit or stop order on your order entry platform.

"Pass the Baton"

Entering the next leg of a trade, slightly before the stop loss that would exit the previous entry. In other words, there is an overlap between the two positions and does not leave you flat. (Think about the analogy being a relay race, the baton is ALWAYS in one of the runner's hands.)

PMR

Pip or Price Movement Range (Autochartist PowerStats)

Point of Validity or POV Stop Loss

Where the entry is no longer valid.

Pressing Validity

An entry taken right against/very close to the stop loss (POV) for the trade.

Proximity

Uses PMRs to determine if an entry or exit level is within reach. If it's close (within the daily or hourly PMR) it has proximity.

R back to top

Ratchet

The process of managing winners by moving a POV to a BE to eventually a trailing stop by using the 1st profit target as the point to begin moving the risk control order (stop loss) to a breakeven thus not allowing a winner to turn into a loser.

Reaction(s)

1) Acceleration Through, 2) Stall At and/or, 3) Reversal From

Recalibrate

Re-examine a trade set up and update the entry and exit levels based on price movement, the economic calendar hot zones (increased or decreased volatility), and PMRs

Risk Environment

Risk ON versus Risk OFF

Risk ON

Synonym. Risk Appetite. Greed. Willingness to buy "riskier" assets (think: equities) in an expectation that they're going higher. Assumed is that there's growth or optimism.

Risk OFF

Synonym. Risk Aversion. Fear. Retreat from riskier assets to safe haven assets. (U.S. dollar, gold, bonds...don't assume that today's safe haven is going to be tomorrow's safe haven.)

S back to top

Safety Net Trailing Stop

A trailing stop used only after (typically) two proactive "finish line" profit targets are reached. The daily or hourly PMR is used as not to smother the trade management.

Shelf Life

How long an entry set up can remain valid until the price levels force us to recalibrate the entries and exits

Shock Absorber

Is a longer-term time frame whose typical PMR can withstand or absorb volatility without changing the market trend analysis that preceded it.

Short Squeeze

Bullish price action/momentum that scares and then forces sellers to "cover" their shorts. "Cover" mean to BUY in this scenario. The net position of a cover for short seller is flat. The fact that covering is buying in a short squeeze gives bulls momentum trade. Two part move: First, you have the cover, then you have the bullish momo and that's the squeeze.

S.M.A.C.

Simple Moving Average on the Close.

Smother (Smother the Trade)

Getting within the daily or hourly PMR of a trade thus giving it no room to move.

Soft

Refers to a floor/support/resistance/ceiling/horizontal line whose touchpoints vary greater than five pips/points/ticks.

Solid

Refers to a floor/support/resistance/ceiling/horizontal line whose touchpoints vary by five pips/points/ticks or less.

Split

How many lots at each entry price (e.g. 2 entry prices 2-4 4-4 or 3 entry prices 2-2-4 2-4-2).

Spoiled Child

Trade Management that allows us to leave a Break Even stop in the trade after taking the first profit target and not ratcheting to a DPMR or EPMR trailing...in other words no trailing stop and simply allowing the trade to do "whatever it wants" short of letting the winner turn in to a loser. Spoiled Child trade management does not have a 2nd PT.

Stepping Out in Front of Size

Respecting the orders that are typically waiting at and around "00"/whole round numbers/major psychological levels, I want to place MY order "in front" or "ahead" rather than with those pending stops/limits. e.g. When prices are heading higher towards 1.3500, "stepping out" would be a 1.3495 sell or when prices are heading lower towards 1.3500, "stepping out" would be a 1.3505 buy.

Striking Distance (related to Proximity)

The PMR itself. e.g. "What's the striking distance to my USD/JPY fade?" I am asking within how many pips is the entry and does that have Proximity.

Swagger (see also Mojo)

Higher highs on the daily in an uptrend. Lower lows on the daily in a downtrend. Implies the psychology and attention a new high or low (especially 52 week) has on the market.

Swing Gone Fade

The market trend transitioning from either a "12-2" or "4-6" o'clock angle to a "2-4" and therefore from a swing strategy to a distribution fade. Main point: The entries are still on the same side of the trade. e.g. going from swing buys to distribution fade buys.

Swing Trade

Trend Correction Entry. "Swing" is the same as "correction" or "retracement".

T back to top

Tomato Can

A weak currency. A boxing analogy for the weaker fighter which implies two participants and the "tomato currency" is the weaker of the two. Comparative.

Trend Gone Transition (same as Swing Gone Fade)

The market trend transitioning from either a "12-2" or "4-6" o'clock angle to a "2-4" and therefore from a swing strategy to a distribution fade. Main point: The entries are still on the same side of the trade. e.g. going from swing buys to distribution fade buys.

Trailing Stop

A safety net stop loss designed to let the market move within its historical volatility to extract maximum profit with allowable and customized risk.

Triage

The words comes from the French word "trie" which means to sort. For us, "triage" is sorting AND prioritizing. It's comparing charts across different symbols AND within the same symbol across all the time frames. And medical has implications: Triage in the medical sense implies: assessing, prioritizing, and ultimately treatment (action, attention). Directional Bias can be considered the first level of triage.

V back to top

Validity

Why a trade justifiable, sound, still reasonable to be in. Hasn't hit its CISL or POV. Why a trade was "good" to begin with. That is its validity. e.g Wave angle, support holding or resistance level, psychological level.