The school · glossary

Trading terms, in plain English.

393 definitions from the 33 modules of the syllabus — candles, levels, structure, risk, chart patterns, liquidity and indicators. Each one links to the module that teaches it.

Glossary

#

%b: Where the close sits between the bands: 0 at the lower, 1 at the upper, 0.5 at the middle. Above 1 means outside the upper band. A position relative to recent spread, nothing more.; Taught in: Volatility and bands
12/26/9: The standard MACD settings: fast EMA, slow EMA, signal EMA. A default, not a law — a MACD on other settings is a different number, so a reading needs its settings to mean anything.; Taught in: MACD
200-day moving average: The simple average of the last 200 daily closes, about forty weeks. Watched mostly because it is widely watched; it trails a steady trend by about a hundred trading days.; Taught in: Moving averages
90-day baseline: What a session normally does, measured over about a quarter. The number beside every weekly figure, and the only thing that makes a single week readable.; Taught in: The trading day

Glossary

A

A limit in R: A loss limit divided by the risk per trade: the number of losing trades the rules can absorb. The same 5% limit is ten losses at 0.5% per trade and two at 2%.; Taught in: Trading under someone else's rules
A week that is over: What the study describes. Every ring, tile and verdict on the page is about five days that have finished, and none of it is a statement about the days ahead.; Taught in: Reading a week
Abandoned baby: A doji separated from the bars either side by true gaps, wicks included. It needs two real gaps, so it is rare on stocks and nearly absent intraday on continuously traded markets.; Taught in: The doji family
Actual fills: The prices at which a position was really entered and exited, as opposed to the levels on the plan. The difference between the two is the most useful number on the outcome page.; Taught in: The whole loop, once
After-the-fact label: A name that the following bars decide. It can describe the past neatly and cannot be applied to the bar that is forming now.; Taught in: Sweeps and inducement
Anchored VWAP: A VWAP whose count starts at a point someone chose — a swing low, a release. A different anchor gives a different line, so the anchor is part of the reading.; Taught in: Volume, anchors and confluence
Anticipation: Counting a pattern while its last bar is still forming. Nearer in price, and sometimes a pattern that never existed, because the bar closed differently.; Taught in: Which patterns hold up
Apex: The point where a triangle's edges would meet if extended. Where the drawn shape stops being useful — not a deadline by which price must do anything.; Taught in: Triangles and ranges
Ascending triangle: Highs stalling at one flat band while the lows beneath them rise. Ends on a close outside either edge; the shape alone does not say which.; Taught in: Triangles and ranges
Asset class: A family of instruments that behave and are priced in similar ways: currencies, metals, stock indices, commodities, crypto. Useful for grouping; it says nothing about direction.; Taught in: Before the first trade
ATR: Average True Range: the average size of the last n bars, commonly fourteen, including any gap from the previous close. The yardstick that turns "a big bar" into a checkable number.; Taught in: What a candle is saying
Average gain and average loss: The two averages RSI is made of: the mean size of the rises and of the falls between consecutive closes over the window, carried forward with Wilder's smoothing. RSI is the gain average's share of their sum.; Taught in: RSI

Glossary

B

Band: A level drawn with width. What the market reacts to is an area a few points deep, because the orders behind a reaction were never at one identical price.; Taught in: Where price reacts
Bandwidth: The distance between the bands divided by the middle band. Lets the width be compared over time; a low value means the recent closes have been very similar.; Taught in: Volatility and bands
Base rate: What an ordinary bar in the same place is followed by, with no pattern at all. A pattern has to be measured against it, not against zero.; Taught in: Which patterns hold up
Baseline: The same measurement taken over about a quarter, printed beside the week or drawn as a notch on its bar. What turns a weekly figure from a bare quantity into a comparison.; Taught in: Reading a week
Bear flag: A fast fall followed by a small, shallow pause drifting slightly higher. The mirror of the bull flag, with the same two candidate completion lines.; Taught in: Flags, pennants and wedges
Bearish engulfing: A rising bar followed by a falling bar whose body covers the first body entirely. The mirror of the bullish one, read at the top of a rise.; Taught in: Two-candle reversals
Belt hold: A bar that opens at its extreme and runs the other way, with a wick only at the closing end. The bullish one opens on its low after a decline.; Taught in: Single-candle signals
Beyond, not on: A stop placed outside a level's own noise rather than inside it, so that reaching it means the idea was refuted — not that price merely brushed the level it was built on.; Taught in: Risk before entry
Bias: The side a setup is arranged on: bullish (a long, stop below and targets above), bearish (a short, the mirror image) or neutral (no setup). It describes the arrangement of the levels, not a forecast of direction.; Taught in: Reading an AI Trade Ideas analysis
Bid and ask: The bid is the best price at which someone will buy from you; the ask is the best price at which someone will sell to you. Most charts plot only the bid.; Taught in: Reading a headline
Bid chart: A chart whose candles are built from bid prices — the usual retail default. The ask sits a spread above every bar and is not drawn, so a buy order can be a spread away from what the chart shows.; Taught in: Before the first trade
Bodies, not wicks: Two-candle patterns compare bodies — where each period opened and closed. The wicks of the first bar do not have to be covered for a pair to count as engulfing.; Taught in: Two-candle reversals
Body: The filled block between the open and the close. It measures net progress: where price started against where it actually finished.; Taught in: What a candle is saying
Body as a share of range: How much of the distance a bar covered it actually kept. A high share means it moved and held the move; a low share means it moved and gave it back.; Taught in: What a candle is saying
Body gap: One bar's body sitting entirely beyond the previous body while the wicks overlap. The usual stand-in for a true gap on markets that trade almost around the clock.; Taught in: Three-candle patterns
Body midpoint: Halfway between a bar's open and close. The line a piercing line or dark cloud cover has to close beyond.; Taught in: Two-candle reversals
Body or wick: Whether an order block is drawn over its bar's full range or its body only. The choice can halve the box, and it must be made before the chart is read, not after.; Taught in: Fair value gaps and order blocks
Bollinger bands: A 20-period simple average of the closes with bands two standard deviations above and below it. A measure of how widely the recent closes spread around their average.; Taught in: Volatility and bands
Bollinger plus RSI: Pairing a band touch with an RSI extreme. Both are computed from the same recent closes and usually fire on the same bar, so the pair is one event described twice.; Taught in: Volatility and bands
BOS, in SMC: In most SMC material, a close beyond the prior swing in the trend's direction — a new higher high in an uptrend. Not the same event the structure module calls a break of structure.; Taught in: The smart money label
Break of structure: A close through the last higher low in an uptrend, or the last lower high in a downtrend. The moment the sequence stops being true. Often shortened to BOS.; Taught in: Market structure
Break-even win rate: The share of trades that must reach the target just to break even at a given risk:reward: 1 ÷ (1 + reward/risk). At 1:2 it is one in three, before costs.; Taught in: Your first position
Breakaway: Five bars: a long bar, a gap, smaller bars extending the move, then a long opposite bar closing back inside the gap. Rare, and rarer still on markets that seldom gap.; Taught in: Continuation patterns and gaps
Breakout: Treating an arrival at a level as a continuation — price closing through the band and carrying on in the same direction.; Taught in: Where price reacts
Broadening top: Swings that widen: higher highs and lower lows at once. Neither trend definition applies; the chart records expanding volatility, often after an advance.; Taught in: Triangles and ranges
Bull flag: A fast rise followed by a small, shallow pause drifting slightly lower. In structural terms, a pullback measured against the move before it.; Taught in: Flags, pennants and wedges
Bullish engulfing: A falling bar followed by a rising bar whose body covers the first body entirely. One period took back all of the previous one's progress and more.; Taught in: Two-candle reversals
Bullish tri-star: Three dojis in a row after a decline, the middle one gapped below the other two. Three balanced periods in one place — a record of three hours, not a forecast of the fourth.; Taught in: The doji family
Busted pattern: A completed pattern that then closed through the line named in advance as where its reading is wrong. A fact about the chart, recorded like any other close.; Taught in: Cups, channels and busted patterns
Buy-side liquidity: Orders that would buy if price rose to them: the stops of short positions and breakout buy stops, plausibly resting above highs.; Taught in: Where the stops sit

Glossary

C

Candidate pattern: A shape that could complete a pattern but has not yet closed through its defining line. Many candidates never complete, which is why naming one early is a prediction.; Taught in: Head and shoulders
Candle: One fixed slice of time drawn as four numbers: the first price, the highest, the lowest and the last. Also called a bar. Change the slice and the bar changes; the market does not.; Taught in: What a candle is saying
CFD: Contract for difference: a contract that pays the change in an underlying's price between opening and closing, with nothing physically changing hands. Not offered to retail clients in every country.; Taught in: Before the first trade
Change of character: CHoCH: SMC's name for the first close against the trend through its last swing — in an uptrend, a close below the last higher low. The structure module's break of structure.; Taught in: The smart money label
Channel: A trend whose swings are regular enough that two parallel lines fit them. It describes the trend's rhythm; the trend itself still ends at the last higher low or lower high.; Taught in: Cups, channels and busted patterns
Channel width: The distance between a channel's two lines. A measurement of how far recent swings travelled, not a promise about the next one.; Taught in: Cups, channels and busted patterns
Chart pattern: A named arrangement of swing points and levels. Shorthand for describing a chart, built entirely from parts that can be checked without the name.; Taught in: Head and shoulders
Choosing the swing points: Every divergence compares two specific highs or lows. Change which ones and it can appear or vanish, so a divergence is only a claim once both points are named.; Taught in: RSI
Chop: Price swinging back and forth without making lasting progress, with overlapping candles and long wicks. A choppy day can have a large range and still an efficiency near 0.; Taught in: Reading a week
Climax volume: An unusually busy, usually wide bar at the end of an extended move. Commonly read as exhaustion; the bar records activity and range, never whose orders they were.; Taught in: Volume, anchors and confluence
Close: The last traded price of the period. The one number that has to survive the whole period to exist, and the only one that cannot be taken back once the bar ends.; Taught in: What a candle is saying
Close outside the shape: The event that ends a triangle, rectangle or broadening shape: a bar closing beyond one of its edges. "Broke out" without that close is not yet a description.; Taught in: Triangles and ranges
Close versus touch: Trading above a price and finishing above it are two different events. Everything in the product that says "broke" or "held" means the second one, on a named timeframe.; Taught in: What a candle is saying
Confidence score: A measure of how strongly the separate pieces of evidence behind an analysis agreed with each other. It is a score of agreement, not the chance that a trade works.; Taught in: Reading an AI Trade Ideas analysis
Confirmation: Counting a pattern only once its defining bar has closed. Certain that the shape happened, and paid for in the distance price has usually moved by then.; Taught in: Which patterns hold up
Confirmation bar: The bar whose close completes a pattern's definition. Until it closes, the pattern does not exist; after it closes, price has usually moved away from where the idea formed.; Taught in: Three-candle patterns
Confirmation line: The swing between the peaks of a double or triple top, or between the troughs of a bottom. The level whose close-through completes the pattern.; Taught in: Double and triple tops
Confirming close: Waiting for the next bar to close in the direction a candle reading implies. Slower, and still a record: it says the next period agreed, not that the one after will.; Taught in: Single-candle signals
Consensus: The forecast: the median of what surveyed economists expected. By the minute before the release it is roughly already in the price, which is why the actual figure alone says little.; Taught in: Reading a headline
Consistency rule: A rule that no single day may account for more than a set share of total profit. It filters out passes built on one oversized day, and can raise the total needed after a large win.; Taught in: Trading under someone else's rules
Continuation pattern: A shape read as a move pausing and resuming: a counter-move that stayed within limits. It describes containment, and a close beyond the limit ends the description.; Taught in: Continuation patterns and gaps
Continuous-market open: On markets that trade around the clock, each bar opens where the last one closed, so the gaps many classic candle definitions require rarely appear except across the weekend.; Taught in: The doji family
Contraction: Swings and bar ranges getting smaller over a stretch of chart. What every triangle has in common, and a statement about volatility rather than direction.; Taught in: Triangles and ranges
Convention, not forecast: A number that cannot be wrong in either direction — short of it "fell short", past it "overshot" — is a measuring rule, and should be used as one.; Taught in: Head and shoulders
Core inflation: An inflation measure that strips out volatile food and energy prices. It can point the other way from the headline figure in the same release.; Taught in: Reading a headline
Correlated indicators: Indicators computed from the same input, such as RSI, MACD and Bollinger bands from the closes. Their agreement is expected, so counting them separately overstates the evidence.; Taught in: Volume, anchors and confluence
Counterattack line: Two opposite bars closing at the same price, the second having opened far from it. Like the kicker, it depends on a gap between one close and the next open.; Taught in: Two-candle reversals
CPI: Consumer Price Index: the monthly US inflation figure, released at 8:30 a.m. New York time. Usually published with a core reading that excludes food and energy.; Taught in: Reading a headline
Crossing the spread: Buying at the ask and selling at the bid. Every order that trades immediately does it, so a position opened and closed with no movement at all still loses the spread.; Taught in: Before the first trade
Cup and handle: A slow, rounded decline and recovery to the same band, then a shallow pullback near the top, completed by a close above the rim. Read from its rims, bottom and handle in numbers.; Taught in: Cups, channels and busted patterns

Glossary

D

Daily loss limit: The most an evaluation account may lose in one trading day before the attempt ends. Most useful known as a number of losing trades, with its reset time converted to local time.; Taught in: Trading under someone else's rules
Dark cloud cover: After a rise, a falling bar that closes below the midpoint of the rising body but not below its open. The mirror of the piercing line.; Taught in: Two-candle reversals
Data mining: Testing many patterns or rules on the same data and keeping the best. Some will look impressive by chance alone, and will not repeat on new data.; Taught in: Which patterns hold up
Dealing range: The swing low and swing high chosen to measure premium and discount from. The choice decides every label, so it has to be written down before the chart is read.; Taught in: The smart money label
Death cross: The 50-day average crossing below the 200-day: the last 50 closes now average lower than the last 200. As late, by construction, as a golden cross.; Taught in: Moving averages
Definition drift: Two sources using one pattern name for different rules — gap or body gap, open or high. Their counts are of different things, so their numbers cannot be compared.; Taught in: Which patterns hold up
Descending triangle: Lows stalling at one flat band while the highs above them fall. The mirror of the ascending triangle, with the same limits on what it says.; Taught in: Triangles and ranges
Displacement: A bar, or short run of bars, much larger than those around it — commonly at least 1.5 or 2 times the ATR. The size threshold both boxes need before they are checkable.; Taught in: Fair value gaps and order blocks
Disqualifier: A condition, written in advance, that means an idea will not be taken even if the price arrives — a release too close, a structure that has changed. It makes "no trade" a decision.; Taught in: The whole loop, once
Distance in ATRs: A price distance divided by the current ATR. Turns "ten points" into "two and a half typical bars", which means the same thing on a quiet day and a busy one.; Taught in: Volatility and bands
Doji: A bar whose close is at or very near its open. The period finished where it started, and everything it travelled was handed back.; Taught in: The doji family
Doji as a change: A doji carries a reading only when it differs from what came before — after bars that kept their range, or at a level after a run. Inside a quiet range it is just more of the same.; Taught in: The doji family
Doji cutoff: The body size, as a share of the range, below which a charting package calls a bar a doji. It is a convention and it differs between packages, so the same bar can be named differently.; Taught in: The doji family
Doji star: A doji whose body sits beyond the previous bar's body. In the classic definition there is a gap between them; on continuously traded markets there usually is not.; Taught in: The doji family
Double bottom: Two swing lows in one band with a swing high between them, completed by a close above that swing high. The mirror of a double top, with every caution intact.; Taught in: Double and triple tops
Double top: Two swing highs in one band with a swing low between them, completed by a close below that swing low. Before that close, it is two tests of a resistance level.; Taught in: Double and triple tops
Dragonfly doji: Open, close and high at one price, with a long lower wick — the limit of a hammer. A close below its low retires the reading.; Taught in: The doji family
Drawdown: How far an account has fallen from its highest point, usually as a percentage. Recovery is asymmetric: a 20% drawdown needs a 25% gain to repair, a 50% drawdown needs 100%.; Taught in: Risk before entry
Drawn from bars: A term defined only by the prices of finished bars, so anyone can check it. Gaps and blocks can be; stops and intent cannot.; Taught in: Fair value gaps and order blocks
Drop-off effect: An SMA changes by the new close minus the close leaving the window, divided by n. It can turn because of a close from long ago, not because of anything today.; Taught in: Moving averages

Glossary

E

Edge: A genuine, repeatable advantage — a positive expectancy that holds up over a large sample. It cannot be seen in a handful of trades, only in a complete record of many.; Taught in: Reading an outcome
Efficiency: How much of the ground a day or session covered it actually kept: the open-to-close distance divided by the high-to-low range, from 0 to 1. A description of shape, not a score.; Taught in: Reading a week
EMA: Exponential moving average: each bar it moves a fraction 2 ÷ (n + 1) of the way towards the new close. Every close stays in, with a weight that shrinks each bar.; Taught in: Moving averages
Entry: The reference price an idea is measured from. Not a recommendation and not the best available price — the point that turns risk and reward into distances instead of moods.; Taught in: Reading an AI Trade Ideas analysis
Entry condition: An observable event that must happen on the chart before an entry price means anything — price inside the zone, a close rather than a touch, the structure still intact. Decided before price arrives; decided afterwards, it is a justification.; Taught in: Reading an AI Trade Ideas analysis
Equal highs: Two or more swing highs at practically the same price, within a tolerance fixed in advance, with no higher high between them. A record of repeated turns, and the most plausible strip of buy-side liquidity.; Taught in: Where the stops sit
Equal lows: Two or more swing lows at practically the same price, within a tolerance fixed in advance. The mirror of equal highs, with sell-side liquidity plausibly below.; Taught in: Where the stops sit
Equilibrium: The midpoint of a dealing range. The same line as a 50% retracement: two chosen prices divided by two, with no information about value.; Taught in: The smart money label
Equity: The account balance plus the current value of every open position. A limit measured on equity counts a losing open trade immediately; a limit on balance counts only closed trades.; Taught in: Trading under someone else's rules
Evaluation: The qualifying stage of a prop firm, also called a challenge: an account with a profit target and loss limits. Breaching a loss limit ends the attempt; missing the target only means it is not passed yet.; Taught in: Trading under someone else's rules
Evening doji star: A strong rising bar, a doji star above it, then a falling bar closing below the middle of the first body. The doji is the pause; the third bar is the event. A close above the star's high refutes the reading.; Taught in: The doji family
Evening star: The mirror of the morning star: a long rising bar, a small star above it, then a falling bar closing past the first body's midpoint.; Taught in: Three-candle patterns
Exchange volume: The number of contracts actually traded, counted by the exchange — as on gold futures. Spot markets have nothing equivalent, only each feed's own activity count.; Taught in: Volume, anchors and confluence
Execution and verdict: Two questions a review answers separately: was the plan carried out as written, and was the plan sound? A good plan executed badly and a bad plan executed well both need saying.; Taught in: The whole loop, once
Exit before entry: The rule that the stop — the price at which the idea is refuted — is written down before the position is opened, while nothing is at stake and the answer can still be honest.; Taught in: Your first position
Expanding volatility: Each swing travelling further than the last. The opposite of contraction, and what a broadening shape records.; Taught in: Triangles and ranges
Expectancy: The average result per trade, measured in R: win rate times average win, minus loss rate times average loss. Together with the win rate it tells the whole story; either one alone is close to meaningless.; Taught in: Reading an outcome
Exposure: The full value a position controls: size × price. Ten ounces of gold at 2,400 is 24,000 of exposure, whatever the margin held against it.; Taught in: Your first position

Glossary

F

Fade: Treating an arrival at a level as a turn — taking the opposite side of the move that brought price there.; Taught in: Where price reacts
Failed completion: A pattern that closed through its defining line and then closed back across it. A warning that the completion did not hold — not yet a bust.; Taught in: Cups, channels and busted patterns
Failure as information: A pattern that can be busted is a claim that could be tested. When it is busted, the test has been run and the answer recorded — which is the point of naming the line.; Taught in: Cups, channels and busted patterns
Failure line: The price, named before the completion, at which a pattern's reading stops being true — the right shoulder of a head and shoulders top, for example.; Taught in: Cups, channels and busted patterns
Fair value gap: In a rising move, the band between the first bar's high and the third bar's low of three consecutive bars, when the first is below the third. Prices only the middle bar traded. FVG for short.; Taught in: Fair value gaps and order blocks
Falling wedge: Lower lows and lower highs converging, each drop smaller. An intact downtrend by the sequence definition until a close above its last lower high.; Taught in: Flags, pennants and wedges
Fibonacci retracement: Lines at 23.6%, 38.2%, 50%, 61.8% and 78.6% of a chosen swing. A widely drawn convention; nothing in the market is derived from the sequence, and 50% is not a Fibonacci ratio.; Taught in: Volume, anchors and confluence
Fill: The record of an order being matched: the actual price, size and time. The only proof a position exists — a chart touching the order's price is not one.; Taught in: Before the first trade
Fill: Price trading back through the whole of a fair value gap; a wick into it is only a touch. Any return is also called mitigation. A later, separate event: a fill does not confirm the gap, and no fill does not refute it.; Taught in: Fair value gaps and order blocks
Flag depth: How much of the pole the pause gave back, as a fraction. A shallow pause is what separates a flag from an ordinary pullback; the cut-off is a convention chosen in advance.; Taught in: Flags, pennants and wedges
Flagpole: A fast, nearly straight move — large bodies, little overlap — measured in points and against ATR; the pole, for short. The part of a flag or pennant that is already over.; Taught in: Flags, pennants and wedges
Flagpole measured move: The convention of copying the pole's length from the end of the pause. A ruler for comparing the next leg with the pole afterwards, not a destination.; Taught in: Flags, pennants and wedges
Flat: Holding no position. The only state in which price movement costs nothing — and a perfectly good answer when no reading is clear.; Taught in: Your first position
FOMC: Federal Open Market Committee: the Federal Reserve body that sets US interest rates, eight times a year. Decision at 2:00 p.m. New York time, press conference half an hour later.; Taught in: Reading a headline

Glossary

G

Gap: Empty space between two bars: the second bar's range sits entirely beyond the first, so nothing traded in between. On gold and FX, found mostly at the weekly open.; Taught in: Continuation patterns and gaps
Gap fill: Later bars trading back into a gap's empty space. Fully filled when price reaches its far edge; partly filled when it enters and stops short.; Taught in: Continuation patterns and gaps
Golden cross: The 50-day average crossing above the 200-day: the last 50 closes now average higher than the last 200. A late summary of a rise that is already well under way.; Taught in: Moving averages
Grab, raid, run: Liquidity grab, raid and stop run are largely other names for a sweep. Different words do not make different events; check each against the same close rule.; Taught in: Sweeps and inducement
Gravestone doji: Open, close and low at one price, with a long upper wick — the limit of a shooting star. A close above its high retires the reading.; Taught in: The doji family

Glossary

H

Hammer: A small body near the top of the range with a long lower wick, printed after a decline. It records prices below that were traded and not kept. A close below its low retires the reading.; Taught in: Single-candle signals
Handle: The shallow pullback after the right rim, measured against the cup's depth. Deeper than a stated fraction — often a third — and it is a second decline, not a handle.; Taught in: Cups, channels and busted patterns
Hanging man: The hammer's exact shape printed after a rise, read the opposite way. The proof that a candle's name comes from its location, not its proportions.; Taught in: Single-candle signals
Harami: A large body followed by a small one that fits inside it. It records contraction — the move stopped extending for a period — not a reversal.; Taught in: Two-candle reversals
Head and shoulders: Three peaks, the middle one highest, with a neckline through the troughs between them. Structurally, an advance that printed a lower high and then closed through its last pullback lows.; Taught in: Head and shoulders
Held versus respected: Held means the level can still be drawn afterwards. Respected means price left it quickly and by a distance. A level can hold and be ignored in the same arrival.; Taught in: Where price reacts
High-impact release: A scheduled release that reliably moves major instruments, such as CPI, NFP or an FOMC decision. The ones worth checking for before any idea.; Taught in: Reading a headline
High-water mark: The highest value an account has reached so far. A trailing drawdown is measured from it, which is why a pullback from a new high can leave little room even while the account is up.; Taught in: Trading under someone else's rules
Higher high: A swing high above the previous swing high. Evidence that an uptrend has been occurring — backward-looking, and not where the definition can fail.; Taught in: Market structure
Higher low: A swing low above the previous swing low. The half of an uptrend that gives a specific price at which the sequence can be refuted.; Taught in: Market structure
Higher-timeframe context: Judging what happened in a small window against a larger one — an hourly move against the daily chart, a week against the quarter. The larger window shows whether the smaller one was unusual.; Taught in: Reading a week
Hikkake: An inside bar, a close beyond one side of it, then within a few bars a close beyond the other side. Records a break that did not last.; Taught in: Continuation patterns and gaps
Hindsight bias: The tendency to see past events as more predictable than they were once the result is known. A level drawn over old bars feeds it: the bounces are noticed and the misses are not.; Taught in: Reading an AI Trade Ideas analysis
How far the second body reaches: The question behind most two-candle names: inside the first body (harami), past its midpoint (piercing line, dark cloud cover) or beyond its open (engulfing).; Taught in: Two-candle reversals

Glossary

I

Identical three crows: Three black crows where each bar opens at, or almost at, the previous close. On an hourly chart of a near-continuous market, that is the normal case rather than a rare one.; Taught in: Three-candle patterns
Imbalance: Another name for the band a fair value gap marks: prices crossed quickly in one bar with little two-way trade. A description of that bar, not a debt the market owes.; Taught in: Fair value gaps and order blocks
Indecision as a record: "Indecision" describes the finished period accurately: neither direction was kept. It says nothing about the next period, and hearing it as a warning turns a record into a forecast.; Taught in: The doji family
Independent inputs: Evidence from different sources — a level's history, the time of day, a scheduled release, volume, structure. Describe a chart once per input, not once per indicator.; Taught in: Volume, anchors and confluence
Indicator confluence: Several indicators pointing at the same reading. Worth something only in proportion to how many genuinely different inputs they are built from.; Taught in: Volume, anchors and confluence
Indicator lag: An indicator can only change when a new bar changes its inputs, and each bar is a small fraction of the window. It describes the recent past, always a little after the fact.; Taught in: RSI
Inducement: A minor swing that is said to invite early orders, which price then trades through before turning — at a larger level in some versions, short of the obvious swing beyond it in others. As usually used, it is named only after that happens.; Taught in: Sweeps and inducement
Inside bar: A bar whose whole range, wicks included, sits within the previous bar's range. A period that went nowhere the one before it had not already been.; Taught in: Continuation patterns and gaps
Instrument: One specific tradable thing with its own price and symbol — XAUUSD, EURUSD, a stock index. Every chart, level and analysis in the product is about exactly one.; Taught in: Before the first trade
Internal and swing structure: SMC's names for structure on a lower and a higher timeframe. Nested structure, with the same rule: name the timeframe first and do not switch to keep a view alive.; Taught in: The smart money label
Invalidation: The price at which the reason for a trade stops being true — usually a piece of structure breaking. The stop sits just beyond it.; Taught in: Risk before entry
Invalidation level: The price past which the reading behind an idea is no longer true. The stop loss is the order that acts on it, and sits a margin beyond it rather than on it.; Taught in: Reading an AI Trade Ideas analysis
Inverse head and shoulders: Three troughs, the middle one lowest, with a neckline through the peaks between them. The same description as the top, mirrored — completed only by a close above the neckline.; Taught in: Head and shoulders
Inverted hammer: A small body near the bottom of the range with a long upper wick, printed after a decline: a push up that was tried and not held.; Taught in: Single-candle signals

Glossary

K

Kicker: A bar followed by one that opens beyond the first bar's open, in the opposite direction, and never trades back into the gap. It needs a real gap, so it barely forms intraday on continuously traded markets.; Taught in: Two-candle reversals

Glossary

L

Lag of an average: On a steady trend, an n-period SMA or EMA trails price by about (n − 1) ÷ 2 bars. The EMA only reacts faster in the first bars after a sudden change.; Taught in: Moving averages
Last higher low: The most recent pullback low in an uptrend. The single price at which a close beyond it makes the sequence stop being a true description of the chart.; Taught in: Market structure
Level: A price where the market has already visibly reacted. A claim about finished bars, which is what makes it something that can be checked rather than defended.; Taught in: Where price reacts
Leverage: Borrowed exposure: control of a position larger than the cash put up for it, such as 1:30. It lowers the margin required; it does not change what the stop costs.; Taught in: Risk before entry
Limit order: An instruction to trade only at a set price or better. The price is guaranteed if it fills; the fill itself is not.; Taught in: Before the first trade
Liquidity: How many orders are resting near the current price, ready to trade. Thin liquidity means a modest order can move price a long way — which is how long wicks get printed.; Taught in: What a candle is saying
Liquidity pool: A strip where many resting orders are thought to gather — usually just beyond an obvious high or low. A label for an inference, not a measured quantity.; Taught in: Where the stops sit
Liquidity provider: A bank or market maker that keeps buy and sell orders resting in the market. When they pull those orders before a release, liquidity thins and price jumps rather than flows.; Taught in: Reading a headline
Liquidity sweep: A bar that trades beyond an obvious high or low, through where stops plausibly rest, and closes back inside it on a named timeframe. The levels module's stop run, under another name.; Taught in: Sweeps and inducement
Location: Whether a pattern formed at a level where finished bars have reacted before, or in open space. The same shape records different things in the two places.; Taught in: Which patterns hold up
Location over shape: A candle's reading comes from where it sits — after which move, at which level — before it comes from its proportions. Without a location, a named candle is a described candle.; Taught in: Single-candle signals
London open: The first hour of the London session. Liquidity arrives in a rush, the overnight range is tested, and hourly bars often become several times larger than the ones before.; Taught in: The trading day
London session: 07:00–13:00 UTC in this product. The world's largest FX and metals centre opens and reprices overnight positions, so the day's first real expansion usually happens here.; Taught in: The trading day
Long: Bought first, to be sold later. A long position gains when price rises and loses when it falls; its stop sits below the entry.; Taught in: Your first position
Long wick: A wick long against its own body and against the ATR. The general case behind hammers and stars: a stretch of prices visited and handed back, whether or not it earns a name.; Taught in: Single-candle signals
Long-legged doji: A doji with long wicks on both sides: a long way travelled in both directions, and no progress kept.; Taught in: The doji family
Lookback window: How many bars an indicator averages. A short window makes every close count for more and the line jumpier; a long one makes it smoother and slower. A reading means nothing without it.; Taught in: RSI
Losing streak: Consecutive losses, which cluster by chance. Even at a coin-flip hit rate, the longest run over a hundred trades is typically around six.; Taught in: Trading under someone else's rules
Lot: A standardised trade size. In currency pairs a standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000; other instruments define a lot in their own contract terms.; Taught in: Risk before entry
Lower high: A push that stops short of the previous peak. Real information that buying has faded, and not by itself the end of an uptrend.; Taught in: Market structure
Lower low: A swing low below the previous swing low. Together with lower highs, it defines a downtrend.; Taught in: Market structure

Glossary

M

MACD: Moving Average Convergence Divergence: a family of three lines built from two exponential averages of the closes, usually 12 and 26 periods, and a 9-period average of their gap.; Taught in: MACD
MACD divergence: Price makes a higher high while the MACD line makes a lower one, or the mirror at lows. A record that the later push had less recent pace behind it, not a forecast of a turn.; Taught in: MACD
MACD histogram: The MACD line minus the signal line. Whether the gap between the averages is widening faster or slower than its own recent average — a difference of a difference.; Taught in: MACD
MACD line: The 12-period EMA of the closes minus the 26-period EMA. How far the fast average is ahead of the slow one, in price points — a measure of recent pace, not of level.; Taught in: MACD
MAE: Maximum adverse excursion: the furthest price moved against a position while it was open, best measured in R. Winners that nearly touched the stop on the way show up here first.; Taught in: The whole loop, once
Maintenance break: The daily pause in the futures markets, 21:00–22:00 UTC here. The thinnest hour of the day, excluded from every session so it cannot distort their averages.; Taught in: The trading day
Margin: The deposit a broker holds while a leveraged position is open. It is collateral, not the amount at risk — the loss at the stop is set by distance, point value and size.; Taught in: Risk before entry
Margin call: A warning that the margin level has fallen to a threshold the broker sets: the deposit behind the open positions is running thin.; Taught in: Your first position
Margin level: Equity divided by the margin in use, as a percentage. The number a broker watches to decide when to warn and when to close positions.; Taught in: Your first position
Market: A place where orders to buy and orders to sell are matched. The price on the screen is the level of the most recent match — an agreement, not a valuation.; Taught in: Before the first trade
Market order: An instruction to trade now at the best available price. The fill is guaranteed while the market is open; the exact price is not.; Taught in: Before the first trade
Market structure: The pattern formed by successive swing highs and swing lows on a stated timeframe: rising in an uptrend, falling in a downtrend, flat in a trading range.; Taught in: Market structure
Marubozu: A bar that is all body — it opened at one extreme and closed at the other. A record of one-way progress in that period, and not a forecast of the next.; Taught in: Single-candle signals
Mat hold: The three-methods skeleton with a gap after the first bar and a pullback that holds higher in its range. Records a counter-move that gave back less.; Taught in: Continuation patterns and gaps
Matching low: Two falling bars after a decline that close at the same price. A close-based version of the tweezer bottom. Often taught as a reversal, measured more often as a continuation; a close beneath the shared close retires any reading of it as a floor.; Taught in: Two-candle reversals
Maximum drawdown: How far the account may fall below a reference level in total before the attempt ends. Static if the reference is fixed; trailing if it follows the account's highest point.; Taught in: Trading under someone else's rules
Measured move: The convention of copying a pattern's height beyond the line it broke. A yardstick for describing the move afterwards; not a price the market is expected to reach.; Taught in: Head and shoulders
Mechanics, not motive: A chart can show that stops were plausibly triggered. It cannot show who pushed price there or whether anyone meant to. "Hunt" and "trap" are stories about intent.; Taught in: Sweeps and inducement
MFE: Maximum favourable excursion: the furthest price moved in favour of a position before the exit, best measured in R. A large MFE against a small result points at the exit, not the entry.; Taught in: The whole loop, once
Mid price: The point halfway between the bid and the ask. A reference, not a price anyone can trade at on the spot: buys meet the ask and sells meet the bid.; Taught in: Before the first trade
Middle band: The simple moving average the bands are built around, 20 periods by default. Everything said about moving averages, including their lag, applies to it.; Taught in: Volatility and bands
Middle trough: The pullback low between the two peaks of a double top. It is the last higher low of the advance, which is why a close below it is a break of structure.; Taught in: Double and triple tops
Midline: A line drawn halfway between a channel's edges. A drawing convention; nothing on the chart obliges price to react there or to reach the far edge.; Taught in: Cups, channels and busted patterns
Minimum trading days: The number of separate days on which trades must be placed before an evaluation can pass. It delays a pass; it never ends an attempt.; Taught in: Trading under someone else's rules
Minor swing: A swing high or low too small to be the leg's main swing point on the stated timeframe, but visible on a lower one. Legs usually contain several.; Taught in: Sweeps and inducement
Morning star: A long falling bar, a small-bodied star below it, then a rising bar closing well into the first body — past its midpoint. Records a decline that paused and was largely taken back.; Taught in: Three-candle patterns
Moving average: The average of the last n closes, recalculated every bar. A smoothed record of the typical recent close, which by construction sits behind price, never ahead of it.; Taught in: Moving averages
Moving the stop away: Widening a stop after entry while the position is losing. The size was fitted to the old distance, so the trade now risks more than one R without anyone deciding to.; Taught in: Your first position
Moving-average crossover: A faster average crossing a slower one. It confirms a move after the fact and crosses back and forth in sideways markets; MACD's zero-line cross is one.; Taught in: Moving averages

Glossary

N

Neckline: The line through the troughs of a head and shoulders top, or the peaks of the inverse. A level like any other: drawn before the break, given width, judged on closes.; Taught in: Head and shoulders
Never-completed pattern: A pattern that was forming and then did not close as one. It rarely gets remembered, and a count that leaves it out makes the completed ones look better than they are.; Taught in: Which patterns hold up
New York session: 16:00–21:00 UTC in this product, after London has closed. Driven by US flow and the US equity session, with liquidity thinning steadily towards the close.; Taught in: The trading day
NFP: Non-Farm Payrolls: the number of US jobs added outside farming, the headline of the monthly jobs report, usually released on the first Friday at 8:30 a.m. New York time.; Taught in: Reading a headline
No sequence: Highs and lows at roughly the same prices. Neither trend definition applies, so neither "intact" nor "ended" is an available description.; Taught in: Market structure
No trades of ours: The study measures properties of sessions and levels on real bars. Nothing the product did, published or called is an input to it, so it cannot flatter the product.; Taught in: Reading a week
Not a prediction: An analysis states what is measurable now and what would make it wrong. It does not say what price will do next, and it never says what anyone should do with money.; Taught in: Reading an AI Trade Ideas analysis

Glossary

O

Obvious price: A price everyone can see without drawing anything: a swing high or low, a round number, the prior day's or the session's extreme. Obvious prices collect stops because stops follow them.; Taught in: Where the stops sit
OHLC: Open, high, low, close — the four prices every candle records. Every other feature of a bar, from its colour to its wicks, is calculated from these four.; Taught in: What a candle is saying
Opening hour: The first hour of a session. It hands over a high, a low and a direction that the rest of the session either keeps or does not.; Taught in: The trading day
Opening read: The direction a session's first hour points in, together with the high and low it leaves behind. The study counts how often the session is still on that side at its close.; Taught in: The trading day
Order block: In a rising move, the last falling bar — the last down candle — before a large rise; the mirror in a falling move. The same box older books call a demand or supply zone. A real place on the chart; the large orders the name implies are a guess.; Taught in: Fair value gaps and order blocks
Oscillator: An indicator that moves inside a fixed range, like RSI from 0 to 100. Its bounds are made by the formula, not by the market, so "near the top" says nothing about price being high.; Taught in: RSI
Outcome: What actually happened to a position, written down once it is closed. Every closed position is one, including the scratches and the ones closed early.; Taught in: Reading an outcome
Outcome bias: Judging the quality of a decision by its result. It rewards lucky bad trades, punishes sound ones that lost, and slowly replaces a tested process with a superstitious one.; Taught in: Reading an outcome
Outcome in the definition: Folding what happened afterwards into an event's name — "a sweep is when price takes the lows and reverses". It makes the term impossible to be wrong, and useless for the same reason.; Taught in: Sweeps and inducement
Outcome rule: The single fixed rule, written before the next bar, that scores every tally row the same way. Chosen after the result, it is not a rule but a verdict.; Taught in: Which patterns hold up
Overbought and oversold: Labels for RSI above 70 and below 30. In arithmetic, above 70 means recent rises outweighed falls by more than two to one. A description of the past, not a verdict on price.; Taught in: RSI
Overextension: A move that has already travelled several times its usual distance. The same strong bars read as a start after a decline and as a crowded late stage after a long run.; Taught in: Three-candle patterns
Overlap: The three hours, 13:00–16:00 UTC, when London and New York are both open. Counted as its own block rather than as part of either, because it behaves like neither — deeper, faster and more prone to sharp reversals.; Taught in: The trading day
Overnight financing: The charge, or occasionally credit, applied to a leveraged position held past the daily rollover. Also called swap. Small per night, paid every night.; Taught in: Your first position

Glossary

P

Pace versus direction: A market can keep moving the same way while moving more slowly. Momentum indicators measure the pace; only the price structure says whether the direction has changed.; Taught in: MACD
Pair: One thing priced in terms of another — EURUSD is euros in dollars, XAUUSD is gold in dollars. A move in the pair can come from either side of it, and the candle does not say which.; Taught in: Before the first trade
Partial fill: Part of an order's size matched and the rest still waiting, because there was not enough on the other side at that price. Most common with limit orders and in thin markets.; Taught in: Before the first trade
Pattern completion: The first close through a pattern's defining line, on the timeframe the pattern was drawn on. The event the name refers to. A wick through the line is not it.; Taught in: Head and shoulders
Pattern context: Where a pattern appeared: at a level or in open space, inside a sequence or a range, in a quiet or an active session. The definition ignores it; the reading depends on it.; Taught in: Which patterns hold up
Pattern edge: One of the lines that bounds a triangle, rectangle or similar shape. Drawn through real swings, given width, and judged on closes like any level.; Taught in: Triangles and ranges
Pattern height: The distance from a pattern's extreme to its defining line — head to neckline, for example. A measurement of the pattern, not of anything after it.; Taught in: Head and shoulders
Pattern in a range: A reversal shape formed in the middle of a trading range. It meets the definition and records almost nothing, because there was no move for it to reverse.; Taught in: Which patterns hold up
Pattern tally: A journal record of every instance of one pattern marked in advance, with its definition, context, anticipation or confirmation, and the result by a fixed rule.; Taught in: Which patterns hold up
Peak tolerance: How far apart two swings can be and still count as "equal", stated before the second one forms. Usually expressed as a fraction of ATR so it scales with the market.; Taught in: Double and triple tops
Pennant: A flag whose edges converge: a small symmetrical triangle right after a fast move. Ends on a close outside it, in whichever direction that close happens.; Taught in: Flags, pennants and wedges
Piercing line: After a fall, a rising bar that closes above the midpoint of the falling body but not above its open. The middle rung between harami and engulfing.; Taught in: Two-candle reversals
Pip: The standard unit of price movement in currency pairs — usually the fourth decimal place (0.0001), or the second (0.01) for yen pairs. Indices and metals are more often measured in points or ticks.; Taught in: Risk before entry
Point of control: The single busiest price band in a volume profile. A record of where most activity happened in the chosen stretch, which changes if the stretch changes.; Taught in: Volume, anchors and confluence
Point value: What a one-point move is worth for one lot or contract of an instrument. It is the bridge between a stop distance on the chart and a loss in money.; Taught in: Risk before entry
Position: An open exposure to price, from the fill that opens it to the fill that closes it. It has a direction, a size and — if it was planned — a stop.; Taught in: Your first position
Position size: The number of units, lots or contracts in a trade: risk budget ÷ (stop distance × point value). An output of two decisions already made, never a starting point.; Taught in: Risk before entry
Post-mortem: The review of a trade after it has closed, especially one that went wrong. Its purpose is to find what could have been known in advance — not to explain the result after the fact.; Taught in: The whole loop, once
Pre-written rule: A definition written before the move — which swing, which timeframe, which band — so that the label can be counted afterwards instead of chosen.; Taught in: Sweeps and inducement
Premium and discount: The halves of a dealing range above and below its midpoint. Shop words for arithmetic: neither half is expensive or cheap in any sense the bars can show.; Taught in: The smart money label
Price above its average: Recent closes are higher than the typical close of the window. Useful context about the past; not a level that holds, and not a trend definition.; Taught in: Moving averages
Price units: MACD is a difference of two prices, so it is quoted in the instrument's own points. It cannot be compared across instruments, or across years when price was far lower.; Taught in: MACD
Priced in: Already reflected in current prices. An expected outcome is largely priced in before it is announced, so only the unexpected part can move the market.; Taught in: Reading a headline
Prior move: The bars that led into a candle. The only difference between a hammer and a hanging man, and between an inverted hammer and a shooting star.; Taught in: Single-candle signals
Process versus outcome: Two separate judgements about one trade: whether the decision would be made again knowing only what was known at the time, and what it happened to pay. A good decision loses regularly.; Taught in: Reading an outcome
Profit target: The gain an evaluation account must reach to pass, usually quoted as a percentage of the starting balance. The rule people read first, and the one that decides the fewest failures.; Taught in: Trading under someone else's rules
Projection strip: The band of empty chart to the right of the newest candle, where planned levels are drawn because they have not happened yet. A plan drawn across the history would claim the market had already traded it.; Taught in: Reading an AI Trade Ideas analysis
Prop firm: A proprietary trading firm: a company that gives traders access to its capital, usually after they pass a paid evaluation, in exchange for a share of any gains.; Taught in: Trading under someone else's rules
Pullback: The counter-move between two pushes in a trend. In an uptrend, where a pullback stops is what creates the next higher low.; Taught in: Market structure

Glossary

R

R: The money lost if the stop is reached: one trade's worth of being wrong. Every other number in the trade — target, result, slippage — is quoted as a multiple of it.; Taught in: Risk before entry
R-multiple: A result expressed in R: +2R made twice what was risked, −1R lost exactly the planned amount. It makes trades in different instruments and account sizes directly comparable.; Taught in: Risk before entry
Random baseline: What the same measurement gives on comparable prices chosen without the idea — random bands, boxes or wicks of the same size. A count means nothing until it beats this.; Taught in: The smart money label
Range: The high minus the low of a bar: the total distance travelled, wicks included. Range is the journey; the body is the destination.; Taught in: What a candle is saying
Range described afterwards: The honest reading of a triple top or bottom: a range tested several times at one edge, named for the edge that gave way. Had the other edge broken, no peaks would be mentioned.; Taught in: Double and triple tops
Reaction: What the bars did on arrival: stalled, rejected, turned or departed sharply. How far and how fast price left is the observable part; motive is not.; Taught in: Where price reacts
Rectangle: Two flat edges with swings bouncing between them: a trading range given a pattern name. It ends on a close outside an edge.; Taught in: Triangles and ranges
Redrawing after the fact: Tilting lines, changing timeframe or renaming the pattern after a bust so the reading survives. It changes the question after the answer came in.; Taught in: Cups, channels and busted patterns
Redrawn box: A gap or block whose edges were chosen after price reached it. It can be made to hold or fail at will, so it records nothing.; Taught in: Fair value gaps and order blocks
Rejection: Shorthand for a long wick: the market traded at those prices during the period and did not stay there by the close. It records what happened, not who did it or why.; Taught in: What a candle is saying
Release bar: The first bar after a release: usually wide, often trading through both sides of the range before it closes. Its close carries information; its wick records where orders were filled.; Taught in: Reading a headline
Resistance: A level above the current price where rising price has previously stalled or turned down. A description of past behaviour, not a ceiling.; Taught in: Where price reacts
Resting order: An order that waits at a set price rather than trading immediately — a limit order, or a stop order before it triggers. The resting orders near price are what liquidity means.; Taught in: Where the stops sit
Retest: Price returning to a level it has already closed through, from the other side. A new test, judged by the same evidence as the first.; Taught in: Where price reacts
Reversal pattern: A pattern that describes the end of a move — such as a head and shoulders after an advance. Without a prior move to reverse, the name has nothing to describe.; Taught in: Head and shoulders
Revision: A correction to a previously published figure as more complete data arrives. It changes the baseline the new number is compared against.; Taught in: Reading a headline
Right shoulder: The last peak of a head and shoulders top: a lower high. A close back above it is the usual line at which a reading of the completed pattern is wrong.; Taught in: Head and shoulders
Rim: The band both sides of a cup reach: a resistance level tested twice. The close above it is what completes the pattern.; Taught in: Cups, channels and busted patterns
Rising three methods: A long rising bar, a few small bars inside its range, then a rising bar that closes above the first bar's high. Falling three methods is the mirror.; Taught in: Continuation patterns and gaps
Rising wedge: Higher highs and higher lows converging, each push gaining less. An intact uptrend by the sequence definition until a close below its last higher low.; Taught in: Flags, pennants and wedges
Risk budget: The fixed amount of money one trade is allowed to cost, chosen in advance. It does not grow because a setup looks better than usual, and it does not shrink because the stop is wider.; Taught in: Risk before entry
Risk per trade: The risk budget expressed as a percentage of the account — for example 0.5% or 1%. On a 10,000 account, 1% risk per trade means one R is 100.; Taught in: Risk before entry
Risk-reward ratio: The distance to the stop compared with the distance to the target, written 1:2 or "2R". A measurement of two distances — it says nothing about how often either is reached.; Taught in: Risk before entry
Risk:Reward: The distance from entry to target divided by the distance from entry to stop. It describes the payoff if the target is reached, and says nothing about how often it is reached.; Taught in: Reading an AI Trade Ideas analysis
Role reversal: Former support behaving as resistance after a break, or the reverse. Common enough to watch for, not reliable enough to assume.; Taught in: Where price reacts
Round number: A price ending in zeros, such as 2300. Orders sometimes cluster there, but a round number only becomes a level if the bars actually reacted at it.; Taught in: Where price reacts
Rounding bottom: A gradual shift from falling to rising with no sharp low: the cup without a handle. The hardest pattern here to check, and best read as a change of pace in numbers.; Taught in: Cups, channels and busted patterns
RSI: Relative Strength Index: the share of recent close-to-close movement that was upward, on a scale of 0 to 100, over a window that is fourteen bars by default. Built from closes only.; Taught in: RSI
RSI divergence: Price makes a higher high while RSI makes a lower one, or the mirror at lows. It records that the latest push was more two-sided than the one before. It does not date a reversal.; Taught in: RSI

Glossary

S

Sample size: How many trades a figure rests on. At twenty, an approach that truly wins half the time routinely shows anything from six to fourteen winners, so twenty says almost nothing about an edge.; Taught in: Reading an outcome
Scheduled release: An economic figure published at a known time — inflation, jobs, a rate decision, oil inventories. Known in advance, which is what makes being surprised by one avoidable.; Taught in: Reading a headline
Scratch: A trade closed at or near breakeven, often by hand and early. It is still an outcome and belongs in the record — scratches are among the rows most often left out.; Taught in: Reading an outcome
Selection bias: A distortion caused by which data made it into a set rather than by the data itself. In a trade journal, the unrecorded trades lean toward losses, so the recorded win rate is inflated.; Taught in: Reading an outcome
Sell-side liquidity: Orders that would sell if price fell to them: the stops of long positions and breakdown sell stops, plausibly resting below lows.; Taught in: Where the stops sit
Sequence: Higher highs with higher lows, or lower lows with lower highs. A trend defined as something that can stop, rather than as a slope that can only be described afterwards.; Taught in: Market structure
Session: A block of the trading day named after the financial centre that dominates it — Tokyo, London, New York. Not a property of the instrument, but a fact about who is awake and trading.; Taught in: The trading day
Setup: A specific, defined situation on a chart, expressed as prices: a bias, an entry, a stop loss and targets. A setup describes where an idea would be measured; it does not say the idea will work.; Taught in: Reading an AI Trade Ideas analysis
Shooting star: The inverted hammer's shape printed after a rise. Prices above were traded and refused by the close. A close above its high retires the reading.; Taught in: Single-candle signals
Short: Sold first, to be bought back later. A short gains when price falls and loses when it rises; its stop sits above the entry and is triggered on the ask.; Taught in: Your first position
Shrinking pushes: Each new swing extending less than the one before. A description of how a trend is behaving; the trend itself ends only where the sequence breaks.; Taught in: Flags, pennants and wedges
Signal line: A 9-period EMA of the MACD line. An average of the gap between two averages, which is why it trails the MACD line and moves more slowly.; Taught in: MACD
Signal-line cross: The MACD line crossing its signal line, which is the histogram crossing zero. Three layers of averaging from the closes, so always late, and frequent in sideways markets.; Taught in: MACD
Slippage: The difference between the price an order was triggered at and the price it was filled at. Small on a quiet afternoon; in a release, large enough that a stop costs more than one R.; Taught in: Reading a headline
Sloped neckline: A neckline whose two anchor points sit at different prices. Normal on real charts — and the reason to draw it before the break, since a line that can tilt can be made to fit any close.; Taught in: Head and shoulders
SMA: Simple moving average: the last n closes added up and divided by n. Every close in the window counts equally and drops out completely when it leaves.; Taught in: Moving averages
Smart Money Concepts: SMC: the vocabulary of liquidity pools, sweeps, gaps, blocks and structure breaks, sold together under a name that claims to show what large participants are doing.; Taught in: The smart money label
Something to reverse: A shape read as a move being refused. It needs a real move to refuse — a sequence on a stated timeframe — or it is answering a question the chart never asked.; Taught in: Which patterns hold up
Spinning top: A small body in the middle of the range, wicks on both sides. Both directions were tried and neither was kept — a record of balance, and very common in quiet hours.; Taught in: Single-candle signals
Spread: The gap between the bid (the price to sell at) and the ask (the price to buy at). It widens in thin conditions, and a wide spread can print extremes few people traded at.; Taught in: What a candle is saying
Spread widening: The gap between the bid and the ask growing around a release, as the orders that normally sit in the market are pulled. Invisible on a chart that plots one price.; Taught in: Reading a headline
Squeeze: Bandwidth at a low value relative to its own history: volatility has contracted. It contains no direction, no timing and no size for whatever comes after.; Taught in: Volatility and bands
Standard deviation: How far a set of numbers typically sits from its own average: the square root of the average squared distance. Bollinger bands use it on the closes of the window.; Taught in: Volatility and bands
Star: A small-bodied bar that sits beyond the body of a long bar before it. It records a period that made little net progress — a pause, not a direction.; Taught in: Three-candle patterns
Static drawdown: A drawdown floor fixed at the start, such as 90,000 on a 100,000 account. Gains move the account away from it, so room grows as the account grows.; Taught in: Trading under someone else's rules
Stick sandwich: Two falling bars with a rising bar between them, the two falling bars closing at the same price. Rare; told as one close being defended twice, though tests find the fall more often continues.; Taught in: Three-candle patterns
Stochastic RSI: Where the latest RSI reading sits between the lowest and highest RSI of the window, from 0 to 1. An indicator of an indicator: faster, noisier, and built from the same closes.; Taught in: RSI
Stop cluster: Many stop orders gathered in one narrow strip, because traders following the same rule — beyond the level, not on it — place them beyond the same obvious price.; Taught in: Where the stops sit
Stop distance: The gap between the entry price and the stop, measured in the instrument's own unit — points, ticks or pips. Read off the chart before anything about money is decided.; Taught in: Risk before entry
Stop loss: The price at which the observation behind an idea has been shown to be wrong — a falsification point placed by structure, not a prediction that price will not go there and not a spending limit.; Taught in: Reading an AI Trade Ideas analysis
Stop order: An instruction to buy or sell automatically once a set price trades. Clusters of them tend to sit just beyond obvious prices, and triggering them can print a sharp wick.; Taught in: What a candle is saying
Stop run: Price pushing briefly beyond an obvious level, triggering the stop orders resting there, and closing back on the original side. A touch, not a break. Also called a stop hunt.; Taught in: Where price reacts
Stop-out: The broker closing positions automatically, at the market, once the margin level falls to a set threshold. An exit that protects the broker's loan — not a stop anyone planned.; Taught in: Your first position
Support: A level below the current price where falling price has previously stalled or turned up. A description of past behaviour, not a floor.; Taught in: Where price reacts
Surprise: The distance between the actual figure and the forecast. It is what the market reacts to — a high number at forecast contains no news; a high number below forecast is a soft one.; Taught in: Reading a headline
Sweep versus break: Both trade through the level and trigger the same stops. The sweep closes back inside; the break closes beyond. One close decides it, and nothing before the close can.; Taught in: Sweeps and inducement
Swept pattern line: A bar that trades through a pattern's confirming line — a neckline, a range edge — and closes back inside. The pattern has not completed; the line, where stops plausibly gathered, was swept. Not the same as busted, which needs a completion first.; Taught in: Sweeps and inducement
Swing point: A swing high is a peak with lower highs either side of it; a swing low is a trough with higher lows either side. How big a peak counts is a judgement, and the timeframe makes it.; Taught in: Market structure
Symmetrical triangle: Lower highs and higher lows at the same time. Each sequence cancels the other, leaving a range that narrows until a close leaves it.; Taught in: Triangles and ranges

Glossary

T

Target: A take-profit level (TP1, TP2): a price where the idea is worth re-examining, usually the next place price has previously reacted. Its distance from the entry is its entire content.; Taught in: Reading an AI Trade Ideas analysis
Tasuki gap: Two bars gapping in one direction, then an opposite bar that closes inside the gap without filling it. Upside and downside versions mirror each other.; Taught in: Continuation patterns and gaps
Test: One arrival of price at a level, judged from the finished bars. The unit everything about levels is counted in.; Taught in: Where price reacts
The 70/30 convention: Wilder's choice of where to draw the lines. Some traders use 80/20 or change them by instrument. A convention can be useful without being a property of the market.; Taught in: RSI
The candle's own extreme: Where a single-candle reading stops being true: a close beyond the high or low the candle itself refused. It names the price at which the shape was wrong.; Taught in: Single-candle signals
The chosen swing: Retracement levels depend entirely on which low and high are picked. A different swing gives five different lines, so a level needs its swing named.; Taught in: Volume, anchors and confluence
The controllable input: Position size. The market sets the fill, whether the stop is reached and how far a move runs; the number of units is the one part of a trade nobody else has a vote in.; Taught in: Risk before entry
The count: "3 of 5" — a number of observations over the number measured. Printed this way so the result cannot be quoted without quoting how much evidence is behind it.; Taught in: Reading a week
The loop: Calendar, plan, record, review — in that order, every time. Its value is not any one trade but the written record that says, after a month, what the trades are actually worth.; Taught in: The whole loop, once
The missing rows: Trades that were taken and never recorded. They are not a random sample — they lean toward losses and toward the trades nobody is proud of.; Taught in: Reading an outcome
The note before: The plan written down before the result exists: calendar line, entry condition, size, and what would disqualify the idea. Evidence — where a note written afterwards is a story.; Taught in: The whole loop, once
The pair's far extreme: Where a two-candle reading stops being true: a close beyond the lower low of both bars for a bullish pair, or beyond the higher high for a bearish one.; Taught in: Two-candle reversals
The smart money label: A name that assigns an actor and a motive to shapes on a chart. No bar records who traded in it or why, so the label adds a story rather than information.; Taught in: The smart money label
Thin book: A market with few participants willing to trade size. The same order moves price further, so a move made in a thin book says less than the identical move made in a busy one.; Taught in: The trading day
Three black crows: Three falling bars with large bodies, each opening inside the previous body and closing near its low. Records three periods in a row that finished near their worst price.; Taught in: Three-candle patterns
Three inside up: A harami followed by a bar that closes above the first bar — above its open in some definitions, above its high in others. The mirror after an advance is three inside down.; Taught in: Three-candle patterns
Three line strike: Three bars in one direction, then one long bar the other way that closes beyond the start of the first. Sources disagree which version is called bullish.; Taught in: Continuation patterns and gaps
Three outside up: A bullish engulfing pair followed by a third bar that closes higher than the second. The mirror after an advance is three outside down.; Taught in: Three-candle patterns
Three white soldiers: Three rising bars with large bodies, each opening inside the previous body and closing near its high. "White" is the old print colour for a rising bar — orange in this product.; Taught in: Three-candle patterns
Three-bar rule: The test for a fair value gap: compare the first bar's extreme with the third bar's opposite extreme. If they do not overlap, the band between them is the gap.; Taught in: Fair value gaps and order blocks
Three-candle pattern: A named sequence of three bars. Most are a two-candle idea plus a third bar that either confirms it or refuses it — the name is only earned once that third bar has closed.; Taught in: Three-candle patterns
Tick volume: A count of price updates in a period on one broker's feed. What most spot gold and FX charts show as volume, because over-the-counter markets have no central record of trades.; Taught in: Volume, anchors and confluence
Timeframe: The length of time one candle covers — five minutes, one hour, one day. Any statement about closes, levels or trends is incomplete until it names the timeframe.; Taught in: What a candle is saying
Timeframe shopping: Switching to a different timeframe after the stated one stops agreeing with a view. The quickest way to turn a definition back into an opinion.; Taught in: Market structure
Tokyo session: Also called the Asian session: 00:00–07:00 UTC in this product. Usually the quietest block of the day, producing tight ranges and the overnight highs and lows that London reacts to.; Taught in: The trading day
Tolerance for "equal": How close two highs or lows must be to count as equal, set before looking and ideally in ATR. Without it, "equal" stretches to fit whatever the reader hopes to find.; Taught in: Where the stops sit
Trade journal: The written record of every trade taken: the plan, the numbers and the outcome. Its value depends entirely on completeness — a journal missing its losses describes a trader who does not exist.; Taught in: Reading an outcome
Trade plan: The full set of decisions made before a position exists: context, entry condition, invalidation, calendar check, size, then the prices. Without the rest, three prices are an order ticket.; Taught in: Reading an AI Trade Ideas analysis
Trading range: Sideways movement between a range high and a range low, with no sequence of higher or lower swings. Its edges are levels, judged by reactions like any other.; Taught in: Market structure
Trailing drawdown: A drawdown floor that rises with the account's high-water mark and never falls back. Gains lift the floor rather than buying room, so room is always measured from the latest high.; Taught in: Trading under someone else's rules
Trend day: A day that travels mostly in one direction and closes near its high or low. Its efficiency is close to 1, whichever way it went.; Taught in: Reading a week
Trendline: A straight line through two or more swing points. Two points draw it; a third swing stopping at it — drawn before that swing — is what makes it evidence.; Taught in: Triangles and ranges
Triangle: A stretch of chart where the swing highs and swing lows converge, so each swing is smaller than the last. A description of contraction, not of direction.; Taught in: Triangles and ranges
Triple bottom: Three swing lows in one band, completed by a close above the peaks between them. A range whose ceiling gave way, described from that close.; Taught in: Double and triple tops
Triple top: Three swing highs in one band, completed by a close below the troughs between them. A trading range whose floor gave way, described from that close.; Taught in: Double and triple tops
True range: The largest of high minus low, high minus previous close, and previous close minus low. Ordinary range plus any gap from the previous close.; Taught in: Volatility and bands
Tweezers: Two neighbouring bars with the same low (tweezer bottom) or the same high (tweezer top). The smallest level there is: two tests in a row, matching within a tick or two.; Taught in: Two-candle reversals
Two black gapping: A gap down followed by two falling bars, the second closing lower and neither reaching back into the gap. Records a gap met with more selling instead of a fill.; Taught in: Continuation patterns and gaps
Two peaks, not a pattern: Two swing highs at one price without a close through the swing between them. A level tested twice — very common, and not yet a double top.; Taught in: Double and triple tops

Glossary

U

Underlying: The thing whose price a contract follows — the gold, the index, the currency. Many retail accounts trade a contract on the underlying without ever owning it.; Taught in: Before the first trade
Unfalsifiable framework: A way of reading charts in which every outcome can be explained as confirming it. It feels powerful and cannot be tested, for the same reason.; Taught in: The smart money label
Unfinished bar: A candle whose period has not ended. Its apparent body runs from the open to the last traded price, which is still moving — so it has no close yet.; Taught in: What a candle is saying
Unfinished sweep: A bar wicking through a level before it has closed. It is not yet a sweep or a break, and naming it early is naming a close that does not exist.; Taught in: Sweeps and inducement
Unmeasured claim: An idea that has been illustrated but not counted: no fixed rule, no full set of cases, no baseline. Not proven wrong — not shown to be right.; Taught in: The smart money label
Unseen stops: Stop orders are generally held by the broker or exchange and shown to nobody. Every claim about where stops sit is inference from how stops are taught, not observation.; Taught in: Where the stops sit
UTC: Coordinated Universal Time, the world's reference clock. It never shifts for daylight saving, which is why session boundaries and the statistics built on them are fixed in it.; Taught in: The trading day

Glossary

V

Value area: The range around the point of control holding about 70% of the profile's volume. The 70% is a convention, not a law.; Taught in: Volume, anchors and confluence
Variance: The natural scatter of results around their true average. Over small samples it is large enough to make a sound approach look broken and a weak one look brilliant.; Taught in: Reading an outcome
Volatility: How far and how fast price moves over a given window. It follows the clock: low in the Asian session, rising at the London open, peaking in the overlap.; Taught in: The trading day
Volatility clustering: Quiet stretches tend to be followed by quiet ones and busy by busy, until they are not. A regularity about the size of moves that says nothing about their direction.; Taught in: Volatility and bands
Volume profile: Volume shown per price over a chosen stretch, instead of per bar. Shows where trading concentrated — on spot gold, where the ticks concentrated.; Taught in: Volume, anchors and confluence
VWAP: Volume-weighted average price: the sum of price times volume divided by total volume, from an anchor such as the session start. The average price where the activity actually was.; Taught in: Volume, anchors and confluence

Glossary

W

Walking the band: Close after close near one band while the band moves with them — what a steady trend looks like on Bollinger bands. A one-sided sequence, not a stretched market.; Taught in: Volatility and bands
Weekly open: The first price of the trading week. A common reference for how far the week has actually got, as opposed to how far it has travelled.; Taught in: Reading a week
Weekly open gap: The gap between the last price before the weekend and the first price after it. On a market that trades almost around the clock, it is where most true gaps come from.; Taught in: Continuation patterns and gaps
What the evaluation cannot see: Everything between the entry and the exit that the numbers do not show — a moved stop, an early close, a condition not waited for. Only the notes can carry it.; Taught in: The whole loop, once
When a box stops counting: The rule for retiring a gap or block — after the first return, after a close through it, or never. Left unstated, one box can be declared respected any number of times.; Taught in: Fair value gaps and order blocks
Whipsaw: A sharp move in one direction followed quickly by a sharp move back, often catching traders on both sides. Most common when liquidity is changing fast — the overlap, the opens, releases.; Taught in: The trading day
Wick: The thin line out to the high or the low. Prices that were genuinely traded inside the period and then left behind before it ended. Also called a shadow or tail.; Taught in: What a candle is saying
Wilder's smoothing: Carrying an average forward by blending in each new value with a weight of 1 in n, instead of recomputing from scratch. Used by RSI and ATR; old values fade rather than drop out.; Taught in: RSI
Win rate: The share of recorded trades that closed in profit. On its own it says nothing about whether an approach makes money — it has to be read beside the average win and loss in R.; Taught in: Reading an outcome
Window: The Japanese name for a gap. A rising window opens upward, a falling window downward; traders watch whether the empty space behaves as a level afterwards.; Taught in: Continuation patterns and gaps

Glossary

Z

Zero-line cross: The MACD line crossing zero, which is the 12-period EMA crossing the 26-period EMA — a moving-average crossover in different clothes, with the same lag.; Taught in: MACD

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