mean opposite things by different traders.

Most traders believe that if the market then reverses, the test was successful, and if it does not and
the move continues beyond the test area, the test failed and a breakout has occurred.
three pushes Three swing highs where each swing high is usually higher or three swing lows where each swing low is usually lower. It trades
the same as a wedge and should be considered a variant. When it is part of a flag, the move can be mostly horizontal and each push does not
have to extend beyond the prior one. For example, in a wedge bull flag or any other type of triangle, the second push down can be at, above,
or below the first, and the third push down can be at, above, or below either the second or the first, or both.
tick The smallest unit of price movement. For most stocks, it is one penny; for 10-Year U.S. Treasury Note Futures, it is 1/64th of a point; and
for Eminis, it is 0.25 points. On tick charts and on time and sales tables, a tick is every trade that takes place no matter the size and even if
there is no price change. If you look at a time and sales table, every trade is counted as one tick when TradeStation charting software creates
a tick chart.
tight channel A channel where the trend line and trend channel line are close together, and the pullbacks are small and last for only one to
three bars.
tight trading range A trading range of two or more bars with lots of overlap in the bars and in which most reversals are too small to trade
profitably with stop entries. The bulls and bears are in balance.
time frame The length of time contained in one bar on the chart (a 5 minute time frame is made of bars that close every five minutes). It can
also refer to bars not based on time, such as those based on volume or the number of ticks traded.
tradable A setup that you believe has a reasonable chance of leading to at least a scalper's profit.
trader's equation To take a trade, you must believe that the probability of success times the potential reward is greater than the probability of
failure times the risk. You set the reward and risk because the potential reward is the distance to your profit target and the risk is the distance
to your stop. The difficulty in solving the equation is assigning a value to the probability, which can never be known with certainty. As a
guideline, if you are uncertain, assume that you have a 50 percent chance of winning or losing, and if you are confident, assume that you have
a 60 percent chance of winning and a 40 percent chance of losing.
trading range The minimum requirement is a single bar with a range that is largely overlapped by the bar before it. It is sideways movement
and neither the bull nor the bears are in control, although one side is often stronger. It is often a pullback in a trend where the pullback has
lasted long enough to lose most of its certainty. In other words, traders have become uncertain about the direction of the breakout in the short
term, and the market will have repeated breakout attempts up and down that will fail. It will usually ultimately break out in the direction of the
trend, and is a pullback on a higher time frame chart.
trailing a stop As the trade becomes increasingly profitable, traders will often move, or trail, the protective stop to protect more of their open
profit. For example, if they are long in a bull trend, every time the market moves to a new high, they might raise the protective stop to just below
the most recent higher low.
trap An entry that immediately reverses to the opposite direction before a scalper's profit target is reached, trapping traders in their new
position and ultimately forcing them to cover at a loss. It can also scare traders out of a good trade.
trapped in a trade A trader with an open loss on a trade that did not result in a scalper's profit, and if there is a pullback beyond the entry or
signal bars, the trader will likely exit with a loss.
trapped out of a trade A pullback that scares a trader into exiting a trade, but then the pullback fails. The move quickly resumes in the
direction of the trade, making it difficult emotionally for the trader to get back in at the worse price that is now available. The trader will have to
chase the market.
trend A series of price changes that are either mostly up (a bull trend) or down (a bear trend). There are three loosely defined smaller
versions: swings, legs, and pullbacks. A chart will show only one or two major trends. If there are more, one of the other terms is more
appropriate.
trend bar A bar with a body, which means that the close was above or below the open, indicating that there is at least a minor price
movement.
trend channel line A line in the direction of the trend but drawn on the opposite side of the bars compared to a trend line. A bull trend channel
line is above the highs and rising to the right, and a bear trend channel line is below the lows and falling to the right.
trend channel line overshoot One or more bars penetrating a trend channel line.
trend channel line undershoot A bar approaches a trend channel line but the market reverses away from the line without reaching or
penetrating it.
trend from the open A trend that begins at the first or one of the first bars of the day and extends for many bars without a pullback, and the
start of the trend remains as one of the extremes of the day for much if not all of the day.
trending closes Three or more bars where the closes are trending. In a bull trend, each close is above the prior close, and in a bear trend,
each close is lower. If the pattern extends for many bars, there can be one or two bars where the closes are not trending.
trending highs or lows The same as trending closes except based on the highs or lows of the bars.
trending swings Three or more swings where the swing highs and lows are both higher than the prior swing highs and lows (trending bull
swings), or both lower (trending bear swings).
trending trading ranges Two or more trading ranges separated by a breakout.
trend line A line drawn in the direction of the trend; it is sloped up and is below the bars in a bull trend, and it is sloped down and is above the
bars in a bear trend. Most often, it is constructed from either swing highs or swing lows but can be based on linear regression or just a best fit
(eyeballing).
trend reversal A trend change from up to down or down to up, or from a trend to a trading range.
20 moving average gap bars Twenty or more consecutive bars that have not touched the moving average. Once the market finally touches
the moving average, it usually creates a setup for a test of the trend's extreme.
undershoot The market approaches but does not reach a prior price of significance like a swing point or a trend line.
unlikely At most 40 percent certain.
unreasonable A setup with an unfavorable trader's equation.
usually At least 60 percent certain.
vacuum A buy vacuum occurs when the strong bears believe that the price will soon be higher so they wait to short until it reaches some
magnet above the market. The result is that there is a vacuum that sucks the market quickly up to the magnet in the form of one or more bull
trend bars. Once there, the strong bears sell aggressively and turn the market down. A sell vacuum occurs when the strong bulls believe that
the market will soon be lower so they wait to buy until it falls to some magnet below the market. The result is that there is a vacuum that sucks
the market down quickly to the magnet in the form of one or more bear trend bars. Once there, strong bulls buy aggressively and turn the
market back up.
wedge Traditionally, a three-push move with each push extending further and the trend line and trend channel line at least minimally
convergent, creating a rising or descending triangle with a wedge shape. For a trader, the wedge shape increases the chances of a
successful trade, but any three-push pattern trades like a wedge and can be considered one. A wedge can be a reversal pattern or a pullback
in a trend (a bull or bear flag).
wedge flag A wedge-shaped or three-push pullback in a trend, such as a high 3 in a bull trend (a type of bull flag) or a low 3 in a bear trend (a
type of bear flag). Since it is a with-trend setup, enter on the first signal.
wedge reversal A wedge that is reversing a bull trend into a bear trend or a bear trend into a bull trend. Since it is countertrend, unless it is
very strong, it is better to take a second signal. For example, if there is a bear trend and then a descending wedge, wait for a breakout above
this potential wedge bottom and then try to buy a pullback to a higher low.
with trend Refers to a trade or a setup that is in the direction of the prevailing trend. In general, the direction of the most recent 5 minute chart
signal should be assumed to be the trend's direction. Also, if most of the past 10 or 20 bars are above the moving average, trend setups and
trades are likely on the buy side.