Friday, December 12, 2008

SWING TRADING DEFINITIONS

Abandoned Baby -- A 3-bar candlestick reversal pattern. A single bar gaps up or down but then
immediately gaps back in the opposite direction on the next bar. The shadow of the lone candle
never crosses the shadow of the bar before the first gap or after the second gap.

Accumulation-Distribution (Acc-Dis) -- The underlying buying or selling pressure within a
particular stock.
Adam and Eve (A&E) -- Top or bottom reversal pattern noted by its sharp, volatile first high (low)
and slower, rounded second high (low).
Ascending Triangle -- A common continuation pattern that forms from a rising lower trendline
and a horizontal top resistance line.
AvgLOSS -- A performance measurement that shows the total losses divided by the number of
losing trades.
AvgWIN -- A performance measurement that shows the total profits divided by the number of
winning trades.
Bear Hug -- A trading strategy that finds short sale opportunities in weak markets that rally into
resistance or narrow range bars on the verge of breakdown.
Bollinger Bands (BB) -- Elastic support and resistance channels above and below price bars
that respond to the tendency of price to draw back to center after strong movement in either
direction. The Bollinger Band center band sets up at the moving average chosen for the indicator.

Breakaway Gap -- A classic gap popularized in Technical Analysis of Stock Trends that signals
the start of a new trend after a prolonged basing period.
Bucket Shops -- Early 20th-century stock gambling parlors that catered to short-term speculation.
Fictional trader Jesse Livermore discusses his experiences in them in the classic Reminiscences
of a Stock Operator.

Charting Landscape -- A three-dimensional view that evaluates complex price action through
multiple layers of information on a single price chart.
Coiled Spring -- A trading strategy that executes a position at the interface between a rangebound
market and a trending market.

Continuation Gap -- A classic gap popularized in Technical Analysis of Stock Trends that signals
the dynamic midpoint of an ongoing trend.
Convergence-Divergence (C-D) -- The tendency of two or more charting landscape features to
confirm or refute an expected price outcome.
Clear Air (CA) -- Pockets of thin participation and ownership that often lead to wide range price
bars.
Climbing the Ladder -- Bollinger Band pattern that indicates a strong and sustained rally.

Cross-Verification (CV) -- The convergence of unrelated directional information at a single price
level.

Cross-Verification x 4 (CVx4) -- A high probability trade in which a single price and time
emerges from analysis through at least four unrelated methods.
Cup and Handle (C&H) -- A popular pattern that triggers a breakout through a triple top. The
formation draws a long and deep base after an intermediate high. The market rallies into a double
top failure that creates the "cup". It pulls back in a small rounded correction that forms the
"handle" and then surges to a new high.


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