These trading terminologies and abbreviations can be confusing, but not if you’re learning from the right source. So you made a good choice coming here.
Here, we laid out the essential Market Lingo and broke them down as simply as possible into brief and easy-to-understand sentences.
Let’s get into it;
Higher High(HH)
When a price rises above its peak, it is considered to have reached a higher high.
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Higher Low(HL)
A higher low is formed when the price makes a new low higher than the previous low. It usually occurs after a higher high has been produced.
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Lower Low(LL)
A lower low is formed when the price makes a new low lower than the previous low. It usually occurs after a lower high has been produced.
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Lower High(LH)
A lower high is formed when the price makes a new low higher than the previous low. It usually occurs after a lower low has been produced.
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Imbalance
When a market exchange receives an excessive number of one type of order—buy, sell, or limit—and insufficient numbers of the order’s counterpart, there is an imbalance of orders.
Both buyers and sellers are required for trades to be completed; an imbalance results when the equation is too strongly weighted in one way.
When looking for an imbalance in the market, simply look for any candle which has a full body and look for the part of the candle that is distinct from the previous and next candles’ wicks.
This signifies an imbalance in the market because few transactions were going on between buyers and sellers.
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ChoCH
ChoCH, which stands for Change of Character, occurs when the price breaks a previous Higher Low (HL) in a downtrend to establish a Higher High (HH) and begins moving in an uptrend or when the price breaks a Higher Low (HL) in an uptrend to produce a Lower Low (LL) and begins moving in a downtrend.
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BOS
BOS is an acronym for Break of Structure; this occurs when the price exceeds a previous high or low.
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Support
Support comes when falling prices halt, reverse direction, and begin to increase. Support is frequently considered as a “floor” that holds prices up.
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Resistance
A price level of resistance is where rising prices stop, change direction, and begin to fall. Resistance is frequently viewed as a ceiling that prevents prices from rising further.
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Uptrend
An uptrend occurs when the price continues to make higher highs and higher lows.
Downtrend
A downtrend occurs when the price continues to make Lower highs and Lower Lows.
CONCLUSION
Always remember that the market is speaking while trading, and you are merely listening.
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We hope this guide on Market Lingo is helpful to you.
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