19 March 2011

Trading Glossary - Part II (G-O)

GOLF: A mechanical trade that is made in the index futures that is entered on the close of the day.

GRAIL: A trade set-up based on a pullback to the 20 period EMA after the 14 period ADX has risen above 30. Pullback in rallies are bought, and pullbacks in declines are sold short. This pattern was discussed at lenght in Street Smarts book.

IMPULSE: Increase in the market momentum. Impulse moves tend to happen in the direction of the trend. On a bar chart they have the appearance of a sharp markup or markdown.

INSTITUTIONS: Mutual funds, pension funds, banks, and large commercials.

KELTNER CHANNELS: A 'trading band' indicator that is displayed on top of price charts. Similar to Bollinger Bands but calculated differently, using true-range rather than standard deviation.

LAST CALL: Trade that setups up in the last hour of a trend day.

LOAD THE BOAT: Use full line of leverage.

MACD: An oscillator based on the difference between two moving averages. We use the difference between a 3 and 10-period simple moving average or 6 and 13-period simple moving average.

MARK UP: A Wyckoff term, used to denote the phase of the market where prices rise, from the beginning of a bull market to its top.

MARKET LEADERSHIP: Market leadership refers to those sectors and industries that are currently bringing in the best returns.

MARKET ORDER: An order to buy or sell a stock immediately at the best available current price. A market order guarantees execution.

MIT: Market-if-touched order. An order which becomes a market order if the specified price is reached.

MOC: Market-on-close order. A buy or sell order which is to be executed as a market order as close as possible to the end of the day.

MOMENTUM: The difference between the last price and the price N-numbers bar. A 2-period Rate of Change (ROC) is the same as a 2-period Momentum.

NR7: The narrowest high-low range of the past seven days.

OOPS TRADE: A term originally coined by Larry Williams which refers to a market that gaps below the previous day's low (or above the previous day's high) and then quickly reverses its direction.

OOZE: Down trending price action that slowly inches down without any upward reactions of any magnitude. One of the strongest forms of trending action.

OPENING BULGE: Period after the opening when the public has a tendency to pay too high a price.

OPENING PLAY: The markets first tendency of the day.

OUCH SETUPS: When a market Closes in the upper 75% of its range but then gaps lower the next day around the previous day's low (vice versa to the upside).

OVERHEAD SUPPLY: Are where the market had found support in the past but the price is currently trading lower.

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