Dark Cloud Cover -- A 2-bar candlestick reversal pattern. The first bar draws a tall rally candle.
The next candle gaps up but closes well within the range of the prior bar.
Descending Triangle -- A common reversal pattern that forms from a descending upper
trendline and a horizontal bottom support line.
Dip Trip -- A
trading strategy that buys pullbacks in an active bull
market.
Doji -- A 1-bar candlestick reversal pattern in which the open and close are the same (or almost
the same) price and the high-low range is above average for that market.
Double Bottom (DB) -- A common reversal pattern in which price prints a new low, reverses into
a rally and returns once to test it before moving higher.
Double Top (DT) -- A common reversal pattern in which
price prints a new high, reverses into a
selloff and returns once to test it before moving lower.
Dow Theory -- Observations on the nature of trend by Charles Dow in the early 20th century. It
also notes that broad
market trends verify when the three major market averages all move to a
new high or low.
Electronic Communications Networks (ECNs) -- Computer stock exchanges that rapidly
match, fill and report customer limit orders.
Elliott Wave Theory (EWT) -- A pattern-recognition technique published by Ralph Nelson Elliott
in 1939 that believes all markets move in five distinct waves when traveling in the direction of a
primary trend and three distinct waves when moving in a correction against a primary trend.
Empty Zone (EZ) -- The interface between the end of a quiet range-bound market and the start
of a new dynamic trending market.
Execution Trigger (ET) -- The predetermined point in price, time and risk that a trade entry
should be considered.
Execution Zone (EZ) -- The time and price surrounding an Execution Target that requires
undivided attention in order to decide if a trade entry is appropriate.
undivided attention in order to decide if a trade entry is appropriate.
Exhaustion Gap -- A classic gap popularized in Technical Analysis of Stock Trends that signals
the end of an active trend with one last burst of enthusiasm or fear.
Fade -- A swing strategy that sells at resistance and buys at support.
Failure Target -- The projected price that a losing trade will be terminated. The price at which a
trade will be proven wrong.
Farley's Accumulation-Distribution Accelerator (ADA) -- A technical indicator that measures
the trend of accumulation-distribution.
Fibonacci (Fibs) -- The mathematical tendency of trends to find support at the 38%, 50% or 62%
retracement of the last dynamic move.
First Rise/First Failure (FR/FF) -- The first 100% retracement of the last dynamic price move
after an extended trending market.
Finger Finder -- A trading strategy that initiates a variety of tactics based upon single bar
candlestick reversals.
5-8-13 -- Intraday Bollinger Bands and moving average settings that align with short-term
Fibonacci cycles. Set the Bollinger Bands to 13-bar and two standard deviations. Set the moving
averages to 5-bar and 8-bar SMAs.
5 Wave Decline -- A classic selloff pattern that exhibits three sharp downtrends and two weak
bear rallies.
Flags -- Small continuation pattern that prints against the direction of the primary trend.
Foot in Floor -- Bollinger Band pattern that indicates short term support and reversal.
Fractals -- Small-scale predictive patterns that repeat themselves at larger and larger intervals on
the price chart.
Gap Echo -- A gap that breaks through the same level as a recent one in the opposite direction.
Hammer -- A 1-bar candlestick reversal pattern in which the open-close range is much smaller
than a high-low range that prints well above average for that market. The real body must sit at
one extreme of the high-low range to form a hammer.
Harami -- A 1-bar candlestick reversal pattern in which the open-close range is much smaller
than the high-low range and sits within the real body of a tall prior bar.
Hard Right Edge -- The location where the next bar will print on the price chart. This also points
to the spot where the swing trader must predict the future.
Head and Shoulders -- This classic reversal pattern forms from an extended high that sits
between two lower highs. Three relative lows beneath the three highs connect at a trendline
known as the neckline. Popular opinion expects a major selloff when the neckline breaks.
Head in Ceiling -- Bollinger Band pattern that indicates short-term resistance and reversal.
Historical Volatility -- The range of price movement over an extended period of time as
compared to current activity.
Hole in the Wall -- A sharp down gap that immediately follows a major rally.
Inside Day -- A price bar that prints a lower high and higher low than the bar that precedes it.
Inverse Head and Shoulders -- This classic reversal pattern forms from an extended low that
sits between two higher lows. Three relative highs above the three lows connect at a trendline
known as the neckline. Popular opinion expects a major rally when the neckline breaks.
January Effect -- The tendency for stocks to recover in January after end-of-year, tax-related
selling has completed.
Market Numbers – Price levels based on multiples or fractions of 10 that act as support or
resistance. Common market numbers include 5, 10, 20, 25, 30, 50, 100.
Moving Average Convergence-Divergence (MACD) -- A trend-following indicator that tracks
two exponentially smoothed moving averages above and below a zero line.
Mesa Top -- A double top reversal pattern that declines at the same angle as the initial rally.
Moving Average Crossover -- The point where a moving average intersects with another
moving average or with price.
Moving Average Rainbows (MARs) -- Wide bands of mathematically related and color-coded
moving averages.
Narrow Range Bar (NR) -- A price bar with a smaller high-low range as compared to the prior
bar's high-low range.
Narrowest Range of the Last 7 Bars (NR7) -- A low volatility time-price convergence that often
precedes a major price expansion. A price bar with a smaller high-low range as compared to the
prior six bars high-low ranges.
NR7-2 -- The 2nd NR7 in a row. A low volatility time-price convergence that often precedes a
major price expansion.
Neckline -- A trendline drawn under the support of a Head and Shoulders pattern over the
resistance of an Inverse Head and Shoulders pattern.
Negative Feedback -- Directionless price action in which bars move back and forth between
well-defined boundaries.
Noise -- Price and volume fluctuations that confuse interpretation of market direction
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The Chicago Mercantile Exchange (CME) said 2004 marked the fifth consecutive year that volume on futures transactions reached record levels, with electronic trading and currency contracts playing a significant part in the growth.
