Trading Basics and Market Structure

Vocabulary and definitions covering the fundamentals of market price action, candlestick anatomy, and trend structures.

Buying

The act of entering a trade with the goal to exit tomble at a higher price.

Selling

The act of entering a trade with the goal to exit at a lower price.

Bearish candlestick

A candle representing decreasing price, consisting of a High, Open, Close, Low, Body, and Wicks.

Bullish candlestick

A candle representing increasing price, consisting of a High, Close, Open, Low, Body, and Wicks.

High

A market movement characterized by a move up, then a move down.

Low

A market movement characterized by a move down, then a move up.

The 3 Directions of the Market

Up, Down, and Sideways.

Consolidation

When the market moves sideways.

Downtrend

Market movement making lower highs and lower lows.

Uptrend

Market movement making higher highs and higher lows.

Break of structure (BOS)

When the current trend breaks.

Break of structure to the downside

Occurs when in an uptrend and get a candle closer.

Break of structure to the upside

Occurs when in a downtrend and gets a candle closer above the most recent high.

Liquidity

Resting orders located above highs and below lows.

Buy orders

Resting orders placed above highs.

Sell orders

Resting orders placed below lows.