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ICT Terms and Abbreviations
B[/B]
• Alphabetical terms and abbreviations — T through Z
TA (or T/A) — (see technical analysis)
take-profit — the price level at which a resting order has been placed to close a position with a profit; or, the anticipated profit, in pips, when that price is hit
technical analysis — market analysis based on price action, with or without technical indicators, but not utilizing fundamental analysis
TF — (see time frame)
The City — (see City of London)
The Square Mile — (see City of London)
three-bar high — a truncated fractal high, containing 3 bars (instead of 5), with the center bar having the highest high of the 3 bars
three-bar low — a truncated fractal low, containing 3 bars (instead of 5), with the center bar having the lowest low of the 3 bars
three Indians climax reversal — a series of 3 closely-spaced impulse price moves (higher or lower), followed by a price reversal
time and price theory — the use of (1) higher time frames (H4, D1, W1, and M1) to find key S/R, MS, and MF, and (2) confluences (on LTF’s) to time trades
time frame — usually refers to a chart time frame, such as a 5-minute chart, a 4-hour chart, etc.
time zone — a designated geographical area whose time-of-day is determined in relation to GMT-time (or UTC-time); example: Moscow time = MSK = GMT+4
Tokyo session — 8am-5pm Tokyo time — compare to Asian Session, which includes the Tokyo session plus the (GMT+8) Singapore and Hong Kong sessions
Tokyo time — JST=GMT+9 (year-round) — note that Japan does not observe daylight saving time
top-down analysis — (1) general market analysis phase, (2) anticipatory trade analysis phase, (3) trade execution phase, and (4) trade reaction phase
top-down approach — (see top-down analysis)
TP — (see take-profit)
TPDS — (see Trading Plan Development Series)
trade execution phase — top-down analysis, phase 3: market tone, risk on or off, buy or sell program, HTF S/R levels, MS, MF, time and price, and trade entry
trade management — management of open trades to (1) reduce trade-risk to zero and protect profits on profitable trades; or (2) cut losses on losing trades
trade reaction phase — top-down analysis, phase 4: market failure to move, price rejection at S/R, news releases, global events, and/or trader issues
Trader’s Trinity — chart dividing a Daily, Weekly or Monthly H-L range into zones: lower 25% I,[/I] middle 25% (fair value), and upper 25% I[/I]
trading plan — written rules specifying the pairs, sessions, times of day, etc., to be traded; and the analysis methods, money management, etc., to be used
Trading Plan Development Series — a video series detailing the use of risk management, plus fundamental, inter-market, technical, and top-down analysis
Treasuries — U.S. government debt instruments; e.g., 2-year T-note, 5-year T-note, 10-year T-note, 30-year T-bond
trend line — an upward-sloping line below a series of progressively higher lows; or a downward-sloping line above a series of progressively lower highs
triangle — a consolidation pattern bounded by upper and lower lines which converge at a point somewhere to the right of the current candle
TT — (see Trader’s Trinity)
turtle soup — a smart money trade placed counter (opposite) to a typical “turtle trade”, anticipating a failure of the turtle trade (i.e., the turtles get “eaten”)
tweezers — refers to two, long, side-by-side, upper (or lower) candle wicks, with opposite colors, typically at a swing high (or swing low)
type 1 divergence — price and oscillator diverge, signaling a probable trend reversal — bullish: price-LL, oscillator-HL — bearish: price-HH, oscillator-LH
type 2 divergence — price and oscillator diverge, signaling a probable trend continuation — bullish: price-HL, oscillator-LL — bearish: price-LH, oscillator-HH
TZ — (see time zone)
UJ — USD/JPY pair
U.S. Dollar Index — the USD measured against a weighted basket of 6 currencies: EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, and CHF 3.6%
USDX — (see U.S. Dollar Index)
USDX SMT — (see the list of Smart Money Tools on page 5)
UTC — Coordinated Universal Time - the modern name for the GMT time/time-zone system. For our purposes, UTC=GMT, and UTC offsets = GMT offsets.
W%-R — (see Williams%-R)
Wall Street — the financial district in Lower Manhattan (New York)
What Every New & Or Aspiring Forex Trader…Still Wants To Know — Michael’s thread (now closed) on the “Newbie Island” forum; starting point for ICT instruction
whiplash long and catapult short — trading long, then short, when Sunday’s open gaps lower; the whiplash fills the gap; the catapult extends the down-move
whiplash short and catapult long — trading short, then long, when Sunday’s open gaps higher; the whiplash fills the gap; the catapult extends the up-move
Williams%-R (or Williams%-Range) — one of 3 price oscillators (W%-R, stochastics, and RSI;) included in the ICT tool-set; use one of these (or use MACD)
Wolfe Waves — a fractal (see def.1) price pattern, consisting of 5 swing points (point 1, point 2, … etc.), used to predict a target price point 6 (the EPA)
WW — (see Wolfe Waves)
WW1, WW2, etc. — Wolfe Wave point 1, Wolfe Wave point 2, etc.
yen — proper name of the Japanese currency, symbol ¥; also, nickname of the USD/JPY pair
yield triad SMT — (see the list of Smart Money Tools on page 5)
Z-configuration — a fractal (see def.1) price consolidation pattern, seen on all time frames, of which the Z-day is the most often observed
Z-day — a day of price consolidation within a defined range, clearly bounded by S/R levels; Z-days often evolve into seek and destroy stop hunts
• Numerical terms
00’s (double zeros) — x.xx00 (or xxx.00) price level (see figure)
1R, 2R, 3R, etc. — an alternative way of specifying a Reward/Risk I[/I] ratio (i.e., Reward = n x Risk); ex: if TP/SL = 3/1, then TP = 3 x SL; that is, TP = 3R
1.28 projection — this rule says that, if the 2 most recent SL’s were n days apart, then the next SH will form (approx.) 1.28 x n days after the most recent SH
5k-1mil — Michael’s 3-year, real-time, live trading demonstration, begun January 2013, to trade 5,000 USD to 1 million USD
18 EMA — 18-period EMA; together, the 18 EMA and the 40 EMA comprise a moving-average-crossover indicator, useful for day-trading and short-term trading
20 level — x.xx20 price level (see institutional level)
40 EMA — 40-period EMA; (see 18 EMA, above, for an explanation of its use)
50 level — x.xx50 price level (see mid figure)
62 level — shorthand for the 62% retracement level (not a standard fib retracement level)
70 level — shorthand for the 70.5% retracement level, which is the OTE sweet spot (not a standard fib retracement level)
79 level — shorthand for the 79% retracement level (not a standard fib retracement level)
80 level — x.xx80 price level (see institutional level)
• PerfChart symbols (a partial list) — note that all prices and yields plotted in PerfCharts are end-of-day (EOD)
$USD — U.S. Dollar Index (Intercontinental Exchange pricing) — see U.S. Dollar Index in the alphabetical listing
$CRB — Commodity Research Bureau (CRB) Index (compiled by Reuters/Jefferies) — see Commodity Research Bureau Index in the alphabetical listing
$GOLD — spot gold (Chicago Mercantile Exchange pricing)
$XBP — one British pound priced in U.S. dollars (PHLX pricing, not spot forex pricing)
$XEU — one euro priced in U.S. dollars (PHLX pricing, not spot forex pricing)
$XJY — 100 yen priced in U.S. dollars (PHLX pricing, not spot forex pricing) — note: this chart is the inverse of a standard USD/JPY forex chart
$XAD — one Australian dollar priced in U.S. dollars (PHLX pricing, not spot forex pricing)
$NZD — one New Zealand dollar priced in U.S. dollars (PHLX pricing, not spot forex pricing)
$UST1M — U.S. Treasury 1-month treasury bill (T-bill) yield
$UST1Y — U.S. Treasury 1-year treasury bill (T-bill) yield
$UST2Y — U.S. Treasury 2-year treasury note (T-note) yield
$UST5Y — U.S. Treasury 5-year treasury note T-note) yield
$UST10Y — U.S. Treasury 10-year treasury note (T-note) yield
$UST30Y — U.S. Treasury 30-year treasury bond (T-bond) yield
(Note that Perf Charts are not currently available for U.K. Gilts or German Bunds)
$INDU — Dow Jones Industrial Average (DJIA)
$SPX — Standard and Poor’s 500 Index (S&P500)
$COMPQ — Nasdaq Composite Index
$NDX — Nasdaq 100 Index
(To set up Perf Charts, go to StockCharts.com - Free Charts, scroll down to “PerfCharts”, and enter the desired symbol in “Create a PerfChart”)
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