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Glossary — A
Abandoned Baby
A rare three-candle reversal pattern featuring a doji that gaps away from the preceding and following candles. The gap isolation of the doji signals an extreme shift in sentiment.
Accumulation
A phase where institutional investors quietly buy large amounts of an asset without significantly moving the price. Identified by sideways price action with increasing volume on up moves.
Advance Block
A bearish three-candle pattern consisting of three consecutive bullish candles with progressively smaller bodies and longer upper shadows, indicating weakening buying momentum near resistance.
Algorithmic Trading
Using computer programs to execute trades automatically based on predefined rules. Algorithms can scan for chart patterns, manage entries/exits, and adjust position sizes at speeds impossible for humans.
Ascending Triangle
A bullish chart pattern formed by a flat resistance line and a rising support line, indicating buyers are becoming more aggressive with each pullback.
Ask (Offer)
The lowest price at which a seller is willing to sell an asset. The difference between the ask and the bid is the spread. Tighter spreads indicate higher liquidity.
ATR (Average True Range)
A volatility indicator that measures the average range of price movement over a specified period. Used for setting stop losses and gauging market volatility.
Accumulation/Distribution Line
A volume-based indicator that measures the cumulative flow of money into and out of an asset. It uses the relationship between close price and trading range combined with volume to determine if an asset is being accumulated or distributed.
Analysis Paralysis
The inability to make a trading decision due to overthinking, conflicting signals, or examining too many indicators. Results in missed opportunities and delayed entries.