Introduction to Counter Trend Trading

These flashcards cover key terminology and concepts related to counter trend trading as discussed in the lecture.

Trend is your friend

A common trading adage suggesting that traders should align their strategies with the prevailing market trend.

Momentum trading

A trading strategy focused on capitalizing on the momentum of price movements, whether the price is rising or falling.

Market structure

The framework that describes the prevailing trends and price action patterns that market participants create through their trading activities.

Bullish trend

A market condition in which prices are rising or expected to rise.

Retracement

A temporary reversal in the price movement of a security that goes against the prevailing trend.

Decisional points

Critical price levels in the market that lead to significant changes in market structure or trend.

Complex pullback

A type of retracement that involves multiple internal movements, typically occurring within an existing trend.

Inducement in trading

A price level or movement designed to lure traders into a specific action, often leading to a breakout or reversal.

Pockets of probability

Specific zones in the market where traders believe the likelihood of a successful trade is increased based on analysis of trends and price action.

High probability setup

A trading scenario where the analysis provides strong evidence for a potential successful trade.

Internal structure

The smaller, often more volatile patterns of price movement that occur within the larger trend.

Impulse number

A sequential number assigned to a significant price movement in the market that helps to identify and analyze trends.

Supply zone

A price area where selling interest is greater than buying interest, often leading to reversals in price.

Targeting decisional demand

Identifying key price levels where buying interest is expected to increase, providing potential for profitable trading opportunities.

Risk/reward ratio

A measure used by traders to compare the potential profit of a trade relative to its potential loss.

Liquidity

The degree to which an asset can be quickly bought or sold in the market without affecting its price.

Execution and time window

The timing and precision involved in entering a trade to maximize probability and minimize risk.