Types of Traders and Definitions: For Commodity Traders and Beginner

A few traders nervous to stay in the market overnight, while others may stay in for a year or more. Every person must find the type of trading that suits his or her personality. Anyone who is not sure about this must do a lot of personal analysis and study until he/she knows what he/she likes best. Below definitions is for non-spreading speculators who may trade various lengths of time. Part of being a first-class trader is knowing how long to stay in a trade. A lot of help is give below by some useful Definitions for beginner.

DEFINITIONS

Acceleration: rate of change in speed of force or power.

Amplitude: change up and down in price.

Balance point: pivotal and critical price of the market.

Bear: Market going downstairs.

Break-out: overcoming resistance, mainly from a blocking area.

Bull: Market going upstairs.

Congestion: uneven price range.

Climax day: daily reversal pattern having long and closing near the high (or low) for the daylight.

CFTC: Commodity Futures Trading Commission.

Cycles: returning price changes of one and the same time spans.

Dow Theory: higher highs with higher lows, or lower higher lower lows from previous swing, indicating change of direction.

Fib: abbreviation for Fibonacci.

Flop over: a new parallel, same width as previous channel.

Fourier: high math method.

Gap: an opening left on price charts. A gap is where there would be turning point. The force of the market causes price to jump over this normal pivot spot. For this reason, lines through gaps are considered as through turning points.

Inside day: a day with both the high and the low between the previous day;’s high and low.

Leg: same as swing, a distance between two pivots or turning points of the market.

Labored move: price pattern confined to a slanting narrow channel.

Moving average: method of filtering or smoothing price action.

Momentum: HAP will use momentum and acceleration as synonyms. The mass generally associated with momentum is the bullish consensus behind a move.

Odds: percent of expected change of the market price.

Outside day: a day with both high and low beyond the previous day’s high and low.

Pivot: reversing or change of direction or same as turning point.

Price action: commodity price movement, on graphs, for a day or some other time period.

Range: also called thrust, swing or leg. It is the distance between two pivots.

Resistance area: place where price meets a lot of buying or selling and stalls in its thrust.

Runaway market: fast move of price in one direction.

Shake-out: stops being run, but with no continuation. A false break-out.

Short covering or long covering: changing from a position, which entails getting twice the amount if reversing.

Support area: same as resistance area, except they each are at opposite sides of buying or selling pressure.

Swing: distance between two pivots.

- From Advanced Commodity Trading Techniques