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Glossary — L
Ladder Pattern
A multi-candle pattern (ladder bottom or ladder top) where a series of sequential candles with overlapping bodies stair-step in one direction before a reversal candle signals exhaustion.
Limit Order
An order to buy or sell at a specified price or better. Buy limits are placed below the current price; sell limits above. Unlike market orders, limit orders guarantee price but not execution.
Liquidity
In Smart Money Concepts, refers to clusters of stop losses sitting above swing highs or below swing lows. Institutions seek liquidity to fill large orders, often driving price to these levels before reversing.
Liquidity Grab
A rapid price move that sweeps through an area of clustered stop losses or pending orders before reversing. Institutions use liquidity grabs to accumulate or distribute positions at favorable prices.
Long (Long Position)
Buying an asset with the expectation that its price will rise. Going long means you profit when price increases and lose when it decreases.
Low
The lowest price reached during a given time period, represented by the bottom of the lower shadow (wick) on a candlestick.
Lower High
A swing high that is below the previous swing high, indicating sellers are gaining control at progressively lower levels. A key characteristic of downtrends.
Lower Low
A swing low that is below the previous swing low, confirming a downtrend. Combined with lower highs, lower lows define bearish market structure.
Leverage
Using borrowed capital to increase the potential return of an investment. While leverage amplifies gains, it equally amplifies losses and can lead to margin calls or account liquidation.
Long-Legged Doji
A doji with exceptionally long upper and lower shadows, indicating extreme indecision as both buyers and sellers tested far from the open/close before being rejected.