Page 96 - NEW FOREX FULL COURSE

FOREX TRADING COURSE FOR BEGINNERS

Blow-offs
A topping or bottoming action. Occurring at the end of an extended move. Prices move sharply
and rapidly in the direction of the current trend on high volume. If the price reverses direction
after this movement, a blow-off has occurred.
Breakaway gap
When prices gap away from a technically defined area, such as a congestion area or a trend line.
Breakout
The movement that pushes through a resistance level or a support level.
Confirmation
When a move or an indicator substantiates the anticipated action resulting from another
indicator.
Congestion area
Trading activity where the price movement stays within an observable trading range for an
extended period of time.
Consolidation
Trading in a range of the congestion area with the implication that the trend is resting and will
resume the direction of the current trend.
Continuation patterns
A pattern that has been observed to indicate that the current trend will continue.
Dead cross
When short-term moving averages cross under the longer-term moving averages and a bearish
signal is given.
Deliberation pattern
Also known as a stalling pattern, prices are coming to a point of a reversal.
Divergence
The disparity between indicators when a price action has made a move. One indicator confirms
that the move was correct, the other shows the opposite. For example, if prices hit high and the
relative strength index does not, a divergence has occurred.
Double bottoms
An easily recognized technical pattern illustrated by a W-shaped bottom where prices reverse at
approximately the same lows.
Double tops
Price movement that resembles an M where the highs are approximately the same.
Down gap
Prices gap down in the next time period to levels below the total trading range of the previous
time period.
Downtrend
Prices trading lower usually represented by lower lows and/or lower highs.
Elliot wave
Ralph Nelson Elliot developed a system for forecasting price movements based upon oscillations
in investor sentiment. The basis of the theory revolves around five waves in a general direction
(five-wave up move) followed by three corrective waves in the opposite direction (three-wave
down move).

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