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Brooks Trading Course > Terminology I > Flashcards

Terminology I Flashcards

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1
Q

If you have to be in the market at all times, either long or short, your current position is called 1. ___.

A
  1. Always In (i.e., Always In Long [AIL]or Always In Short [AIS]);

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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2
Q
  1. In an upswing, a ___ is a bar with a low below the low of the prior bar. In a downswing, it is a bar with a high above that of the prior bar.
A
  1. Bar Pullback (AKA Pullback Bar);

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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3
Q
  1. ___ is a term for a trading range of three or more bars that largely overlap and include one or more dojis. It is a type of tight trading range with prominent tails and often relatively large bars.

Beginners should stop trading until there is a clear 2. ___.

Experienced traders will sometimes 3. ___ below bars and 4. ___ above bars.

A
  1. Barbwire;
  2. Breakout;
  3. Buy;
  4. Sell;
    * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
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4
Q
  1. A ___ is a minor reversal up in a bear trend. Traders expect the bear trend to resume. It can be as brief as one sideways bar or it can retrace most of the most recent leg down. As long as traders believe the market is still Always In Short (AIS), the rally is still more likely to be a _(same)_ than a successful trend reversal up.
A
  1. Bear Flag;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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5
Q
  1. A ___ is a change in trend from up to down (a bear trend).
A
  1. Bear reversal;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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6
Q
  1. A ___ is a bar that creates a breakout. It is usually a strong trend bar.
A
  1. Breakout Bar (AKA Bar Breakout);

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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7
Q
  1. A ___ forms when there is a Pullback (PB) that tests a Breakout (BO) point and the tails overlap, but the bodies do not.
A
  1. Body Gap (formerly called a Negative Gap);

Note: Think about a bull Breakout (BO) followed by a Pullback (PB) five-to-ten bars later. If the low of the pullback bar falls below the high of the breakout point’s bar, the pullback closes the gap. However, if the low of the body of the Pullback (PB) bar stays above the high of the body of the Breakout (BO) point’s bar, there is a gap between the two bodies. That is a Body Gap. While not as strong as an actual gap, it is a sign of strength and it often is still a Measuring Gap.

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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8
Q
  1. A ___ forms when the high or low of the current bar extends beyond some prior price of significance such as Support or Resistance, a swing high or low, the high or low of any prior bar, a Trend Line, or a Trend Channel. If the close is beyond the high or low of the prior bar, the _(same)_ is stronger and the distance between the close and the high or low of the prior bar often becomes a measuring gap. Every Bear Trend bar is a _(same)_, as is every Bull Trend bar.
A
  1. Breakout (BO);

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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9
Q
  1. A ___ is an account in which ones losses have fallen below the minimum margin requirements set by the broker. Trading is no longer allowed until additional funds have been depostited.
A
  1. Blown Account;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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10
Q

___ is a setup where a breakout in either direction should have follow-through.

A
  1. Breakout Mode;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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11
Q
  1. If there is a Buy The Close bull trend, a bear bar is a ___. Traders often take profits below its low. When there is a Sell The Close bear trend, a bull bar is a _(same)_. Bears often take profits above its high.
A
  1. Disappointment Bar;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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12
Q
  1. A ___ is a small pullback of one to about five bars that occurs within a few bars after a breakout. Since you see it as a pullback, you are expecting the breakout to resume, and the pullback is a setup for that resumption.
A
  1. Breakout Pullback;

Note: If instead you thought that the breakout would fail, you would not use the term pullback and instead would see the pullback as the start of a failed breakout and a reversal. For example, if there was a five-bar breakout above a bear trend line, but you believed that the bear trend would resume, you would be considering shorting this and you would be seeing it as a bear flag. You would not be looking to buy a pullback immediately after the market broke out to the downside.

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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13
Q
  1. A ___ is a breakout pullback that comes close to the original entry price to test a breakeven stop. It may overshoot it or undershoot it by a few ticks. It can occur within a bar or two of entry or after an extended move or even 20 or more bars later.
A
  1. Breakout Test;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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14
Q
  1. The ___ is the probability that the market will move either up or down any number of ticks before it reaches a certain number of ticks in the opposite direction. If you are looking at an equidistant move up and down, it hovers around 50 percent most of the time, which means that there is a 50–50 chance that the market will move up by X ticks before it moves down X ticks, and a 50–50 chance that it will move down X ticks before it moves up X ticks.
A
  1. Directional Probability;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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15
Q
  1. A ___ is a chart representation of price action in which the body is the area between the open and the close. If the close is above the open, it is a bull _(same)_ and is shown as white. If it is below, it is a bear _(same)_ and is black. The lines above and below are called tails (some technicians call them wicks or shadows).
A
  1. Candle;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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16
Q
  1. A ___ is a trade where the intent is to exit on the same day of entry.
A
  1. Day Trade;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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17
Q
  1. A ___ is a minor reversal down in a bull trend. Traders expect the bull trend to resume. It can be as brief as one sideways bar or it can retrace most of the most recent leg up. As long as traders believe the market is still Always In Long, the selloff is still more likely to be a _(same)_ than a successful trend reversal down.
A
  1. Bull Flag;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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18
Q
  1. A ___ is a trade taken in the belief that there is more to go in the trend, but that a small pullback is due. A trader enters countertrend to capture a small profit as that small pullback is forming. This is usually a mistake and should be avoided.
A
  1. Countertrend Scalp;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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19
Q
  1. A ___ is a change in trend from a downtrend to an uptrend (a bull trend).
A
  1. Bull Reversal;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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20
Q
  1. A trade or setup that is in the opposite direction from the current trend (the current always-in direction) is considered ___. This is a losing strategy for most traders since the risk is usually at least as large as the reward and the probability is rarely high enough to make the trader’s equation favorable.
A
  1. Countertrend;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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21
Q
  1. A ___ is a series of two or more bull trend bars closing near their highs. If the context is good for a rally, many bulls will buy the closes of the bars or above their highs.
A
  1. Buy the Close Bull Trend;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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22
Q
  1. The ___ of a trading opportunity is comprised of all the bars to the left showing buying and selling pressure, support and resistance (i.e., the circumstances that support or oppose the execution of a trade setup, or its trade management).
A
  1. Context;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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23
Q
  1. ___ is characterized by strong bulls asserting themselves; their buying is creating bull trend bars, bars with tails at the bottoms, and two-bar bull reversals. The effect is cumulative and usually is eventually followed by higher prices.
A
  1. Buying Pressure;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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24
Q
  1. A ___ is a move that has gone too far too fast and has now reversed direction to either a trading range or an opposite trend. Most _(same, plural)_ end with trend channel overshoots and reversals, but most of time, a reversal results in trading ranges and not an opposite trend.
A
  1. Climax;

https://www.brookstradingcourse.com/price-action-trading-terms-glossary/

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25
1. A ___ is a candle with a small body or no body at all. On a 5 minute chart, the body would be only one or two ticks; but on a daily chart, the body might be 10 or more ticks and still appear almost nonexistent. Neither the bulls nor the bears control the bar. All bars are either trend bars or nontrend bars, and those nontrend bars are called \_(same, plural)\_.
1. Doji; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
26
1. A ___ is a huge Surprise Bar. It tends to dominate the rest of the day. For example, if there is a huge bull bar, the day will usually be in a bull trend or trading range for the remainder of the day. Its affect sometimes lasts for many days.
1. Dominant Feature; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
27
1. A ___ is a chart formation in which the low of the current bar is about the same as the low of a prior swing low. That prior low can be just one bar earlier or 20 or more bars earlier. It does not have to be at the low of the day, and it commonly forms in bull flags (a \_(same)\_ bull flag).
1. Double Bottom; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
28
1. A ___ is characterized by a leg up that is about equal in size to something earlier in the trend. For example, the leg might be the same size as an earlier leg up or the height of a trading range.
1. Measured Move in Bull Trend; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
29
1. A ___ is a swing high that is higher than a previous swing high.
1. Higher High; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
30
1. A ___ is characterized by a leg down that is about equal in size to something earlier in the trend. For example, the leg might be the same size as an earlier leg down or the height of a trading range.
1. Measured Move in Bear Trend; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
31
1. An ___ occurs when the market surpasses a prior price of significance like a swing point or a trend line, and is a special type of Breakout (BO).
1. Overshoot; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
32
1. A ___ is a pause or bull flag in a bull trend that has two spikes down to around the same price and then reverses back into a bull trend.
1. Double Bottom Bull Flag; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
33
1. An ___ is an outside bar with a close above its open.
1. Outside Up Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
34
A ___ is a breakout that leads to a measured move. A breakout is a trend bar. The gap is from the close of the breakout bar to the breakout point. For example, the top or bottom of a trading range. Usually the move is about equal to the height of the trading range or pattern that preceded the breakout. For example, a bull breakout above a wedge or trading range often rallies to about as many points up as there were in the wedge or trading range.
1. Measuring Gap; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
35
1. An ___ is an outside bar with a close below its open.
1. Outside Down Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
36
1. A ___ is a buy setup composed of a double bottom followed by a deep pullback that forms a higher low.
1. Double Bottom Pullback; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
37
1. An ___ is a bar with a high that is above or at the high of the prior bar and a low that is below the low of the prior bar, or a bar with a low that is below or at the low of the prior bar and a high that is above the high of the prior bar.
1. Outside Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
38
1. A ___ is a reversal from a bull to a bear trend or from a bear trend to a bull trend. The setup must include a break out of the channel (below the bull trend line in a bull trend or above the bear trend line in a bear trend). In addition, the reversal begins with a test of the old trend extreme. All \_(same)\_ tops are variations of double tops, and all \_(same)\_ bottoms are types of double bottoms.
1. Major Trend Reversal; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
39
1. An ___ is a reversal in the first hour or so of the day.
1. Opening Reversal; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
40
1. A ___ is a chart formation in which the high of the current bar is about the same as the high of a prior swing high. That prior high can be just one bar earlier or 20 or more bars earlier. It does not have to be at the high of the day, and it commonly forms in bear flags (a double top bear flag).
1. Double Top; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
41
1. An ___ is an outside bar followed by a larger outside bar.
1. Outside-Outside (oo); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
42
1. A ___ is any trend line that contains most of the price action on the screen and is typically drawn using bars that are at least 10 bars apart.
1. Major Trend Line; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
43
A ___ is a change to an opposite type of behavior. Most technicians use this term to mean a change from a bull trend to a bear trend or from a bear trend to a bull trend. However, trading range behavior is opposite to trending behavior, so when a trend becomes a trading range, this is also a \_(same)\_. When a trading range becomes a trend, it is a \_(same)\_ but is usually called a breakout.
1. Reversal; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
44
An ___ is an outside bar followed by an inside bar, followed by an outside bar.
1. Outside-Inside-Outside (oio); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
45
1. A ___ is a pause or bear flag in a bear trend that has two spikes up to around the same price and then reverses back into a bear trend.
1. Double Top Bear Flag; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
46
1. A ___ is a temporary pause or countertrend move that is part of a trend, swing, or leg and does not retrace beyond the start of the trend, swing, or leg. It is a small trading range where traders expect the trend to resume soon. For example, a bear \_(same)\_ is a sideways to upward move in a bear trend, swing, or leg that will be followed by at least a test of the prior low. It can be as small as a one-tick move above the high of the prior bar or it can even be a pause, like an inside bar.
1. Pullback (PB); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
47
1. ___ is useless information generated by the media for the sole purpose of selling advertising and making money for the media company. It is unrelated to trading, is impossible to evaluate, and should always be ignored.
1. News; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
48
The term "probably" means at least ___ percent certain.
1. 60; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
49
1. A ___ is a bar with a low below the prior bar in a bear flag or near the top of a trading range. 2. If there is then a bar with a higher low (it can occur one or several bars later), the next bar in this correction whose low is below the prior bar’s low is a \_\_\_. 3. Third and fourth occurrences are a ___ and \_\_\_, respectively. 4. A ___ is a wedge bear flag variant.
1. Low 1; 2. Low 2; 3. * Low 3; * Low 4; 4. Low 3; * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
50
1. ___ is a term for one's chance of success. For example, if a trader looks back at the most recent 100 times a certain setup led to a trade and finds that it led to a profitable trade 60 times, then that would indicate that the setup has about a 60 percent \_(same)\_ of success. There are many variables that can never be fully tested, so \_(same, plural)\_ are only approximations and at times can be very misleading.
1. Probability; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
51
1. A ___ is a bar that does not touch the moving average. The space between the bar and the moving average is the gap. The first pullback in a strong trend that results in a moving average gap bar is usually followed by a test of the trend’s extreme. For example, when there is a strong bull trend and there is a pullback that finally has a bar with a high below the moving average, this is often a buy setup for a test of the high of the trend.
1. Moving Average Gap Bar (AKA Gap Bar); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
52
1. ___ is characterized by any change in price on any chart type or time frame.
1. Price Action; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
53
1. A ___ is a sell setup composed of a double top followed by a deep pullback that forms a lower high.
1. Double Top Pullback; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
54
1. A ___ is a tick in the foreign exchange (forex) market. However, some data vendors provide quotes with an extra decimal place, which should be ignored.
1. Pip; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
55
1. The charts in the videos and books use a ___ moving average, but any moving average can be useful.
1. 20-Bar Exponential Moving Average; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
56
1. A ___ has a high probability of a reward that is big compared to the risk. It cannot exist because no institution would ever take the other side where there was a low probability of success and the reward was small compared to the risk.
1. Perfect Trade; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
57
1. A ___ is a swing low that is lower than a previous swing low.
1. Lower Low; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
58
1. A ___ is a bar that does not extend the trend. In a bull trend, a pause bar has a high that is at or below the prior bar, or a small bar with a high that is only a tick or so higher than the previous bar when the previous bar is a strong bull trend bar. It is a type of pullback.
1. Pause Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
59
1. A ___ is a stop based on a fixed dollar amount or number of points, like two points in the Eminis or a dollar in a stock.
1. Money Stop; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
60
1. ___ are traders who buy as a bull signal bar is forming rather than waiting for it to close and then entering on a buy stop at one tick above its high.
1. Early Longs; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
61
1. A ___ is any small reversal in a trend or trading range. A minor reversal in a trend usually becomes a pullback, which means it will soon end and the trend will resume. A pullback is called a bull flag in a bull trend or a bear flag in a bear trend.
1. Minor Trend Reversal; ## Footnote _Note: Alternatively, instead of the trend resuming, the pullback can keep adding bars and be followed by other minor reversals up and down. After about 20 bars, it will have evolved into a trading range. This means the influence of the trend has mostly or completely ended. The market is about equally likely to break into trend up or down. When that happens, the minor reversal led to a leg in what became a trading range. About 20% of the time, a minor reversal grows into an opposite trend. When it does, although it initially was likely to be minor, it turned out to be a major trend reversal._ *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
62
1. A ___ is a swing high that is lower than a previous swing high.
1. Lower High; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
63
1. A ___ is a trend line on any time frame that is drawn across from two to about 10 bars where most of the bars touch or are close to the trend line, and then one of the bars has a false breakout through the trend line. This false breakout sets up a with-trend entry. If it fails within a bar or two, then there is usually a countertrend trade.
1. Micro Trend Line Breakout; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
64
1. ___ are traders who sell as a bear signal bar is forming rather than waiting for it to close and then entering on a sell stop at one tick below its low.
1. Early Shorts; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
65
1. A ___ is a trend channel line drawn across the highs or lows of three to five consecutive bars.
1. Micro Trend Channel Line; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
66
1. A ___ is the smallest position size that can be traded in a market. It is a share when referring to stocks and a contract when referring to Eminis or other futures.
1. Lot; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
67
1. When the bar before and the bar after a strong trend bar do not overlap, this is a sign of strength and often leads to a measured move. For example, if there is a strong bull trend bar and the low of the bar after it is at or above the high of the bar before it, the midpoint between that low and that high is a \_\_\_.
1. Micro Measuring Gap; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
68
1. An ___ is the bar during which a trade is entered.
1. Entry Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
69
1. A ___ is characterized by consecutive or nearly consecutive bars with highs that are near the same price. It is a one-bar bull flag if it forms in a bull spike, but it can be a reversal setup at the end of a bear flag.
1. Micro Double Top; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
70
1. A ___ is a person who buys a position in a market or the actual position itself.
1. Long; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
71
1. A ___ is characterized by consecutive or nearly consecutive bars with lows that are near the same price. It is a one-bar bear flag if it forms in a bear spike, but it can be a reversal setup at the end of a bull flag.
1. Micro Double Bottom; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
72
1. The charts in Al Brooks' videos and books use a 20-bar \_(indicator)\_, but any moving average can be useful.
1. Exponential Moving Average (EMA); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
73
A ___ is a very tight channel where most of the bars have their highs and lows touching the trend line and, often, also the trend channel line. It is the most extreme form of a tight channel, and it has no pullbacks or only one or two small pullbacks.
1. Micro Channel; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
74
1. ___ and 2. ___ are terms Al Brooks commonly uses to indicate a certainty of at least 60%.
1. Likely; 2. Probable (or probably); * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
75
1. A ___ is a traditional pattern forming over one to about five bars and can still be valid, although easily overlooked. When it forms, it is a \_(same)\_ version of the pattern.
1. Micro; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
76
1. An ___ is characterized by an unusually big bear bar or bars late in a bear trend. This usually attracts profit taking and creates at least a minor reversal up. The gap is the close of the final bar to the low of the breakout point or even to the high of the sell climax bars.
1. Exhaustion Gap in Bear Trend; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
77
1. A ___ is a rally in a bull spike or a tight bull channel without significant pullbacks and that extends further than the fundamentals would dictate.
1. Melt-Up; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
78
1. A ___ is a small trend that breaks a trend line of any size; the term is used only where there are at least two (same, plural)\_ on the chart. It is any smaller trend that is part of a larger trend and it can be a pullback (a countertrend move), a swing in a trend or in a sideways market, or a with-trend move in a trend that occurs between any two pullbacks within the trend.
1. Leg; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
79
A ___ is a sell-off in a bear spike or a tight bear channel without significant pullbacks and that extends further than the fundamentals would dictate.
1. Meltdown; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
80
1. An ___ is characterized by an unusually big bull bar or bars late in a bull trend. This usually attracts profit taking and creates at least a minor reversal down. The gap is the close of the final bar to the high of the breakout point or even to the low of the buy climax bars.
1. Exhaustion Gap in Bull Trend; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
81
1. A bull ___ is a small trading range with a bottom created by two or more bars with identical lows; a bear \_(same)\_ is a small trading range with a top created by two or more bars with identical highs.
1. Ledge; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
82
1. To ___ is to place a trade in the opposite direction of the trend (for example, selling a bull breakout that you expect to fail and reverse downward).
1. Fade; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
83
1. An ___ consists of three consecutive bars where the second bar is an outside bar and the third bar is an inside bar. It is often a Breakout Mode setup where a trader looks to buy above the inside bar or sell below it.
1. ioi; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
84
A ___ is a failure that fails, resuming in the direction of the original breakout, and therefore a breakout pullback. Since it is a second signal, it is more reliable. For example, if there is a breakout above a trading range and the bar after the breakout is a bear reversal bar, if the market trades below that bar, the breakout has failed. If the market then trades above the high of a prior bar within the next few bars, the failed breakout has failed and now the breakout is resuming. This means that the failed breakout became a small bull flag and just a pullback from the breakout.
1. Failed Failure; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
85
1. Also called the smart money, an ___ can be a pension fund, hedge fund, insurance company, bank, broker, high frequendy trading firm (HFT firm) large individual trader, or any other entity that trades enough volume to impact the market. Market movement is the cumulative effect of many \_(same)\_ placing trades, and a single \_(same)\_ alone usually cannot move a major market for very long.
1. Institution; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
86
1. A ___ is a move where the protective stop is hit before a scalper’s profit is secured or before the trader’s objective is reached, usually leading to a move in the opposite direction as trapped traders are forced to exit at a loss.
1. Failure (AKA Failed Move); ## Footnote _Note: Currently, a scalper’s target in the Emini of four ticks usually requires a six-tick move, and a target in the QQQ of 10 ticks usually requires a move of 12 cents._ *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
87
1. An ___ is a bar with a high that is at or below the high of the prior bar and a low that is at or above the low of the prior bar.
1. Inside Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
88
1. A ___ is a trade in the Emini that reaches five ticks beyond the signal bar and then reverses. For example, a breakout of a bull flag runs five ticks, and once the bar closes, the next bar has a low that is lower. Most limit orders to take a one-point profit would fail to get filled since a move usually has to go one tick beyond the order before it is filled. It is often a setup for a trade in the opposite direction.
1. Five-Tick Failure; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
89
A(n) 1. ___ is comprised of three inside bars in a row, and represents a somewhat more reliable pattern than an ii.
1. iii; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
90
1. The term ___ refers to a trader who is not currently holding any positions.
1. Flat; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
91
1. An ___ is characterized by consecutive inside bars, where the second is inside the first. At the end of a leg, it is a breakout mode setup and can become a flag or a reversal setup. A less reliable version is a “bodies-only \_(same)\_,” where you ignore the tails. Here, the second body is inside the first body, which is inside the body before it.
1. ii; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
92
1. After the initial move, like a breakout, a ___ is one or more bars that extend the move. Traders like to see \_(same)\_ on the next bar and on the several bars after that, hoping for a trend where they stand to make more profit. For example, if there is a trading range and then a bull trend bar closes above the high of the trading range, the next bar is the \_(same)\_ bar. Bulls want it to have a bull body, which increases the chances of higher prices. Bears want a bear body, which increases the chances that the breakout will fail and reverse down.
1. Follow-Through; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
93
1. A ___ is a bar with a high above the prior bar in a bull flag or near the bottom of a trading range. 2. If there is then a bar with a lower high (it can occur one or several bars later), the next bar in this correction whose high is above the prior bar’s high is a \_\_\_. 3. Third and fourth occurrences are a ___ and \_\_\_, respectively. 4. A ___ is a wedge bull flag variant.
1. High 1, 2, 3, or 4; 2. High 2; 3. * High 3; * High 4; 4. High 3; * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
94
1. A ___ is a bar that creates follow-through after the entry bar; it is usually the next bar, but sometimes forms a couple of bars later.
1. Follow-Through Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
95
1. ___ is a type of program trading where firms place millions of orders a day in thousands of stocks to scalp profits as small as a penny, and the trading is based on statistical analysis rather than fundamentals.
1. High-Frequency Trading (HFT); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
96
1. A ___ is a space between any two price bars on the chart. An opening \_(same)\_ is a common occurrence and is present if the open of the first bar of today is beyond the high or low of the prior bar (the last bar of yesterday) or of the entire day. A moving average \_(same)\_ is present when the low of a bar is above a flat or falling moving average, or the high of a bar is below a flat or rising moving average.
1. Gap; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
97
1. A ___ is a chart with each bar representing more time or trades than the bars on the current chart (e.g., a 60 minute chart is a \_(same)\_ for all charts that have bars of 59 minutes or less). A monthly chart is the highest time frame that most traders follow.
1. Higher Time Frame (HTF); ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
98
A ___ is a formation in which the current bar extends one tick beyond the prior bar back into the gap. For example, if there is a gap up open and the second bar of the day trades one tick below the low of the first bar, this is a \_(same)\_.
1. Gap Reversal; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
99
1. A ___ is a swing low that is higher than a previous swing low.
1. Higher Low; ## Footnote *https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
100
1. All conforming regions of price action on a chart can be grouped into one of two phases, ___ and \_\_\_.
1. Trends; 2. Trading Ranges; * https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
101
1. Trends generally begin with a \_\_\_. 2. If a Pullback (PB) from a \_(same as 1.)\_ results in a weaker trend, a ___ has formed.
1. Breakout (BO); 2. Trend Channel; * https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
102
1. A Bull Trend is characterized by a series of \_\_\_. 2. A Bear Trend is characterized by a series of \_\_\_.
1. High Highs (HHs) and Higher Lows (HLs); 2. Lower Highs (LHs) and Lower Lows (LLs); * https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
103
1. A Trend Channel typically evolves into a \_\_\_.
1. Trading Range; ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
104
1. A market in a Trading Range should be considered to be in \_\_\_, meaning traders should anticipate a Breakout (BO).
1. Breakout Mode; ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
105
1. ___ is characterized by a price or zone of prices at-or-below the current price at which Price Action is expected to pause or reverse most of the time.
1. Support; ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
106
1. Al Brooks sometimes refers to a Candle as a \_\_\_.
1. Bar; ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
107
The vertical lines extending from the tops or bottoms of chart candlesticks are often referred to as 1. \_\_\_, 2. \_\_\_, 3. ___ or 4. \_\_\_.
1. Wicks; 2. Tails; 3. Shadows; 4. Feathers; * https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
108
1. What constitutes a Trend Bar?
1. Any candle whose bar is 50% or more of its total length; ## Footnote _Note: A multi-bar trend would be apparent when viewing a smaller-timeframe chart._ *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
109
1. What constitutes a Trading Range Bar? 2. What does Al Brooks often call Trading Range Bars?
1. Any candle whose bar is less than 50% of its total length; 2. Dojis (AKA Doji Bars); _Note: A multi-bar Trading Range would become apparent when viewing a lower-timeframe chart._ *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
110
1.
1. ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
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1. ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
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1. ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
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1. ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
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1. ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
115
1. ___ is characterized by a price or zone of prices at-or-above the current price at which Price Action is expected to pause or reverse most of the time.
1. Resistance; ## Footnote *https://www.brookstradingcourse.com/price-action-fundamentals/video-01-terminology/*
116
Name three (of six listed) examples of what are understood to be traditional types of trading institutions.
1. Pension fund; 2. Hedge fund; 3. Insurance company; 4. Bank; 5. Broker; 6. Large individual trader; _Note 1: High frequency trading firms are considered a non-traditional type of trading institution._ _Note 2: These are components of "**M**r. **PIBB**", a Berdancronym for traditional trading institution examples._ **M**r. **PIBB** **M**r. **-** Large individual trader **P - P**ension fund **I - I**nsurance company **B - B**ank **B - B**roker * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/* * Berdancronym*
117
Traditional institutions place trades based on 1.\_\_\_, and they used to be the sole determinant of the market’s direction. However, high-frequency trading (HFT) firms now have a significant influence on the day’s movement since their trading currently generates most of the day’s volume. HFT firms are a special type of institutional firm, and their trading is based on ___ and not 1.\_\_\_. Traditional institutions determine the direction and target, but mathematicians determine the path that the market takes to get there.
1. Fundamentals; 2. Statistics; * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*
118
1. ___ determine the direction and target of the market, but mathematicians (i.e., 2. \_\_\_) determine the path that the market takes to get there.
1. (Traditional) institutions; 2. High Frequency Trading Firms (HFTs); * https://www.brookstradingcourse.com/price-action-trading-terms-glossary/*

Brooks Trading Course (2 decks)

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