📚 Trading Terms Dictionary

Trading hours from 22:00 to 06:00 UTC. Includes Tokyo, Sydney, and Singapore markets. Generally characterized by lower volatility and ranging price action. Sets up liquidity pools for London session.

Trading hours from 06:00 to 14:00 UTC. Most volatile session with highest volume. Often sweeps Asian highs/lows and creates the daily direction. Critical for pattern execution.

Trading hours from 14:00 to 22:00 UTC. Overlaps with London for first 2 hours (highest volume period). Continues the direction set by London or creates reversals. US news impacts this session heavily.

The NY session from the previous trading day. Provides critical context for today's price action. Shows yesterday's closing direction and sets up today's bias. Essential for pattern identification.

Specific time windows with highest probability for pattern execution. London open (06:00-08:00 UTC) and NY open (14:00-16:00 UTC) are primary kill zones. Best entry timing for most patterns.

The highest or lowest price reached during a specific trading session. Acts as key reference points for liquidity and pattern identification. Used to mark BSL/SSL levels.

Stop losses of SHORT traders sitting ABOVE recent highs. Also includes buy stop orders from breakout traders. Smart money targets these levels to grab liquidity before reversing down. Marked with horizontal line above highs.

Stop losses of LONG traders sitting BELOW recent lows. Also includes sell stop orders from breakdown traders. Smart money targets these levels to grab liquidity before reversing up. Marked with horizontal line below lows.

When price moves beyond a key level (high/low) to trigger stop losses, then quickly reverses. The "sweep" grabs liquidity (stops) and provides fuel for the reversal. Core concept in most patterns.

Concentration of stop losses at obvious levels (highs, lows, round numbers). Smart money targets these pools for trade execution. Larger pools = stronger reversals after sweep.

Intentional move by large traders to trigger retail stop losses before the real move happens. Same concept as liquidity sweep. Often looks like a "fake breakout" to retail traders.

Large institutional traders (banks, hedge funds, market makers) who move the market. They target liquidity pools and create the patterns we trade. Understanding their behavior is key to success.

Change in price direction. Bullish reversal = price was down, now going up. Bearish reversal = price was up, now going down. Most patterns involve reversals after liquidity sweeps.

Price maintains the same direction across sessions. No reversal occurs. Pattern #2 (Strong Momentum) and Pattern #6 (Full Trend Day) are continuation patterns.

Multiple factors confirming the same trade direction. Examples: Pattern + trend + key level + IFVG. More confluence = higher probability trade.

The complete pattern structure: Previous Day NY → Asian → London → NY. Understanding all four sessions is critical for accurate pattern identification and execution.

Pattern variation that results in UPWARD price movement. Marked with "A" suffix (e.g., Pattern #4A). Entry after SSL sweep, target is highs.

Pattern variation that results in DOWNWARD price movement. Marked with "B" suffix (e.g., Pattern #4B). Entry after BSL sweep, target is lows.

A gap in price where there's an imbalance/inefficiency. Price tends to return to fill these gaps. Used for precise entry timing and profit targets. Look for 3-candle formation with gap between candle 1 and candle 3.

Last candle before a strong impulsive move. Represents where institutions placed their orders. Acts as support/resistance. Price often returns to these zones before continuing.

The pattern of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend). Understanding structure helps determine trend direction and whether to take bullish or bearish patterns.

When price breaks a significant high or low, confirming trend continuation. In uptrend, breaking previous high = BOS. Validates the direction for pattern entries.

When price action suggests a potential trend change. In uptrend, breaking previous low = ChoCh. Signals to look for reversal patterns rather than continuation.

Premium = upper half of a range (expensive, better for sells). Discount = lower half of a range (cheap, better for buys). Used to determine if price is at a good level for entry.

Comparison of potential loss to potential profit. Risk $100 to make $200 = 1:2 R:R. Minimum should be 1:2. With 70% win rate and 1:2 R:R, you're profitable long-term.

Calculating how much to trade based on account size and risk tolerance. Never risk more than 1-2% of account per trade. Proper sizing prevents account blowup.

Predetermined exit price to limit losses. Always place BEFORE entering trade. For bullish trades, below SSL. For bearish trades, above BSL. Add 5-10 point buffer for volatility.

Closing portions of trade at different targets. Common strategy: 50% at Target 1, 30% at Target 2, 20% runners. Locks in profit while letting some position run.

Peak-to-trough decline in account value. Example: Account goes from $10,000 to $9,000 = 10% drawdown. Important to manage and limit to stay in the game long-term.

Percentage of winning trades. Pattern #4 has 70% win rate = 7 out of 10 trades win. You don't need high win rate (60-70% is excellent) if your R:R is good.