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Glossary — M
MACD (Moving Average Convergence Divergence)
A trend-following momentum indicator showing the relationship between two EMAs (typically 12 and 26 period). The MACD line, signal line, and histogram help identify trend changes and momentum shifts.
Margin
Borrowed capital from a broker used to increase trading position size. Margin amplifies both gains and losses. A margin call occurs when account equity falls below the broker's required minimum.
Market Maker
A firm or individual that provides liquidity by continuously quoting bid and ask prices, profiting from the spread. Market makers facilitate smooth trading but can also influence short-term price action.
Market Order
An order to buy or sell immediately at the best available price. Market orders guarantee execution but not price, and can experience slippage in fast-moving or illiquid markets.
Market Structure
The framework of swing highs and swing lows that defines the current trend. Higher highs and higher lows = bullish structure; lower highs and lower lows = bearish structure. A break of structure signals a potential trend change.
Marubozu
A candlestick with no shadows (wicks), meaning the open equals the high or low, and the close equals the other extreme. Represents maximum conviction — buyers or sellers controlled the entire session.
Mean Reversion
The theory that price tends to return to its average over time. Extreme deviations from moving averages or Bollinger Bands are expected to revert. Contrarian strategies exploit mean reversion.
Measured Move
A price target calculated by measuring the height of a pattern and projecting it from the breakout point. Used to set take-profit levels for flags, triangles, head and shoulders, and other patterns.
Momentum
The rate of change in price over a given period. Strong momentum indicates conviction behind a move; fading momentum warns of potential exhaustion. Measured by indicators like RSI, MACD, and Rate of Change.
Morning Star
A bullish three-candle reversal pattern: large bearish candle → small-bodied star candle → large bullish candle. Named after the planet Venus appearing before sunrise, heralding a new day.
Moving Average
A smoothed line calculated by averaging price over a specified number of periods. Moving averages reduce noise, identify trends, and provide dynamic support/resistance. Common types are SMA and EMA.
Multiple Time Frame Analysis
Analyzing the same asset across different time frames (e.g., daily, 4-hour, 1-hour) to get a comprehensive view. Higher time frames define the trend; lower time frames refine entries.
Mat Hold
A five-candle bullish continuation pattern: a large bullish candle followed by three small bearish/neutral candles that stay within the first candle's range, then another large bullish candle.
Matching High
A bearish two-candle pattern where two consecutive candles close at the same or nearly the same high, suggesting a double resistance test and potential reversal downward.
Matching Low
A bullish two-candle pattern where two consecutive candles close at the same or nearly the same low, suggesting a double support test and potential reversal upward.