Brooks Terms

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  1. always in
    If you have to be in the market at all times, either long or short, this is whatever your current position is (always in long or always in short). If at any time you are forced to decide between initiating a long or a short trade and are confident in your choice, then the market is in always-in mode at that moment. Almost all of these trades require a spike in the direction of the trend before traders will have confidence.
  2. barbwire
    A trading range of three or more bars that largely overlap and one or more is a doji. It is a type of tight trading range with  prominent tails and often relatively large bars.
  3. bar pullback
    In an upswing, a bar pullback is a bar with a low below the low of the prior bar. In a downswing, it is a bar with a high above that of the prior bar.
  4. bear reversal
    A change in trend from up to down (a bear trend).
  5. blown account
    An account that your losses have reduced below the minimum margin requirements set by your broker, and you will not be allowed to place a trade unless you deposit more money.
  6. breakout
    • The high or low of the current bar extends beyond some prior price of significance
    • such as a swing high or low, the high or low of any prior bar, a trend line, or a trend channel.
  7. breakout bar (or bar breakout)
    • A bar that creates a breakout. It is usually a 
    • strong trend bar.
  8. breakout mode
    A setup where a breakout in either direction should have follow through.
  9. breakout pullback
    A small pullback of one to about five bars that occurs within a few bars after a breakout. Since you see it as a pullback, you are expecting the breakout to resume and the pullback is a setup for that resumption. If instead you

    • thought
    • that the breakout would fail, you would not use the term pullback and

    • instead
    • would see the pullback as a failed breakout. For example, if there was a

    • five-bar
    • breakout above a bear trend line but you believed that the bear trend would

    • continue,
    • you would be considering shorting this bear flag and not looking to buy a

    • pullback
    • immediately after it broke out to the downside.
  10. breakout test
    A breakout pullback that comes close to the original entry price to test a breakeven stop. It may overshoot it or undershoot it by a few ticks. It can occur within a bar or two of entry or after an extended move or even 20 or more bars later.
Card Set:
Brooks Terms
2014-02-18 02:50:00
Brooks Terms

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