Price Action

• Support and ResistanceBeginner7 min read

  Support is a price area where falling prices have tended to stop; resistance is an area where rising prices have tended to stall.

• BreakoutIntermediate7 min read

  A breakout is when the price moves decisively beyond a support or resistance level, or out of a trading range.

• Short SqueezeIntermediate7 min read

  A short squeeze is a rapid price rise that forces short sellers to buy back their positions, which pushes the price up even further.

• Price GapIntermediate6 min read

  A price gap is a jump between one candle's close and the next candle's open, leaving an empty space on the chart where no trades took place.

• PullbackBeginner5 min read

  A pullback is a temporary move against the prevailing trend, such as a dip during an uptrend; its depth measured in percent is often called a retracement.

• MomentumIntermediate5 min read

  Momentum is the speed and persistence of a price move; strong momentum means the price is moving quickly in one direction with little pullback.

• TrendlineBeginner5 min read

  A trendline is a straight line drawn through at least two swing lows in an uptrend, or two swing highs in a downtrend, to show the trend's slope.

• RangeBeginner5 min read

  A range is a period when the price moves sideways between a fairly stable high and low instead of trending; traders also call it consolidation.

• ReversalIntermediate5 min read

  A reversal is a change in the direction of a trend — an uptrend turning into a downtrend or the reverse — as opposed to a brief pullback.

• Head and ShouldersIntermediate5 min read

  Head and shoulders is a reversal pattern of three peaks with the middle one highest; the inverse version, with three troughs, can mark the end of a downtrend.

• Double Top and Double BottomIntermediate5 min read

  A double top is two similar peaks with a dip between them that can signal a turn lower; a double bottom is the mirror image that can signal a turn higher.

• Market StructureIntermediate4 min read

  Market structure is the pattern of swing highs and swing lows that shows whether a market is trending up, trending down or ranging.

• Price ActionBeginner4 min read

  Price action is the study of raw price movement — candles, swings, levels and trends — to make trading decisions with few or no indicators.

• Higher Highs, Higher Lows, Lower Highs, Lower LowsBeginner4 min read

  An uptrend makes higher highs (HH) and higher lows (HL); a downtrend makes lower highs (LH) and lower lows (LL). These four labels describe trend structure.

• RetestIntermediate4 min read

  A retest is when the price returns to a level it has just broken — for example falling back to old resistance — before deciding whether to continue.

• Supply and Demand ZonesIntermediate4 min read

  Supply and demand zones are price areas, drawn as bands rather than lines, where price previously turned sharply because of heavy selling (supply) or buying (demand).

• Swing High and Swing LowBeginner4 min read

  A swing high is a peak with lower highs on both sides; a swing low is a trough with higher lows on both sides. Together they map a market's structure.

• Accumulation and DistributionAdvanced3 min read

  Accumulation describes a period when large buyers are thought to build positions without pushing the price up; distribution is when they are thought to sell into strength.

• Break of StructureAdvanced3 min read

  A break of structure (BOS) usually means price moving beyond the last swing high in an uptrend, or below the last swing low in a downtrend, confirming the trend continues.

• Change of CharacterAdvanced3 min read

  A change of character (CHOCH) usually describes the first break in the opposite direction to the trend — an early hint that the trend may be ending.

• ChannelIntermediate3 min read

  A channel is formed by two parallel lines that contain the price: a trendline plus a parallel line on the opposite side of the swings.

• ContinuationIntermediate3 min read

  A continuation is a pause in a trend after which the price resumes in the same direction; patterns such as flags are called continuation patterns.

• Cup and HandleIntermediate3 min read

  A cup and handle is a rounded, U-shaped recovery followed by a small downward drift (the handle), often read as a pause before a breakout higher.

• Fair Value GapAdvanced3 min read

  A fair value gap (FVG) is usually defined as a three-candle sequence where the middle candle moves so fast that the wicks of the first and third candles do not overlap.

• Flag and PennantIntermediate3 min read

  Flags and pennants are short pauses after a sharp move — a small sloping rectangle (flag) or a small symmetrical triangle (pennant) — often treated as continuation patterns.

• Liquidity SweepAdvanced3 min read

  A liquidity sweep is a quick move beyond an obvious high or low, where many stop orders sit, followed by a sharp reversal; some traders call it a stop hunt.

• Long SqueezeIntermediate3 min read

  A long squeeze is a sharp fall that forces over-leveraged buyers to sell or be liquidated, and their forced selling pushes the price down even further.

• Optimal Trade EntryAdvanced3 min read

  Optimal trade entry (OTE) usually refers to entering during a pullback into roughly the 62–79% Fibonacci retracement zone of the previous move.

• Order BlockAdvanced3 min read

  An order block is usually described as the last opposite-direction candle before a strong move, treated as a zone where large orders may have been placed.

• Point of InterestAdvanced3 min read

  A point of interest (POI) is a price zone a trader has marked in advance — such as an order block or gap — where they plan to look for a trade.

• Triangle PatternIntermediate3 min read

  A triangle pattern forms when highs and lows converge toward a point — ascending, descending or symmetrical — showing a narrowing range before a breakout.

• Volatility Contraction and ExpansionIntermediate3 min read

  Markets tend to alternate between quiet periods with narrowing price ranges (contraction) and active periods with widening ranges (expansion).

• Volatility Contraction PatternAdvanced3 min read

  A volatility contraction pattern is a base in which each pullback is smaller than the one before — for example 20%, then 10%, then 5% — often with shrinking volume, before a breakout. The term was popularised by trader Mark Minervini.

• WedgeIntermediate3 min read

  A wedge is a pattern where both boundary lines slope in the same direction while converging — a rising wedge or a falling wedge.

Each term is defined in one sentence. Terms marked “Article in preparation” will get a full step-by-step article.

• Abandoned Baby

  AdvancedGlossary

  An abandoned baby is a rare three-candle reversal: a doji that gaps away from the candle before it and the candle after it, leaving it isolated. A bullish one forms after a decline, a bearish one after a rally.

• Belt Hold

  IntermediateGlossary

  A bullish belt hold opens at or near its low after a decline and closes near its high, with little or no lower wick; a bearish belt hold opens at its high after a rally and closes near its low. It shows one side taking control from the open.

• Blow-Off Top

  IntermediateArticle in preparation

  A blow-off top is a final, near-vertical surge on exploding volume that exhausts the buyers, followed by a sharp reversal. Its mirror image at the bottom of a sell-off is a selling climax. Both are clear mostly in hindsight.

• Broadening Formation

  AdvancedGlossary

  A broadening formation, or megaphone, shows higher highs and lower lows, so the range keeps widening. It reflects rising volatility and indecision, and it is hard to trade because both sides keep getting stopped out.

• Bull and Bear Traps

  BeginnerArticle in preparation

  A bull trap is a breakout above resistance that fails and falls back, catching the buyers who jumped in; a bear trap is the same failure below support, catching sellers. Waiting for a close beyond the level, or a retest, filters out many of them.

• Dead Cat Bounce

  BeginnerArticle in preparation

  A dead cat bounce is a brief recovery inside a steep decline that fizzles before the fall resumes. It is only obvious afterwards; a bounce that cannot reclaim the levels where the selling started is a warning sign.

• Diamond Pattern

  AdvancedGlossary

  A diamond pattern starts as a broadening formation and then narrows like a symmetrical triangle, forming a diamond shape. It usually appears at major tops (diamond top) and is confirmed when price breaks out of the narrowing half.

• Harami

  BeginnerArticle in preparation

  A harami is a two-candle pattern in which a small body sits entirely inside the previous candle's larger body. After a decline it hints that selling is fading (bullish harami); after a rally that buying is fading (bearish harami). A harami cross uses a doji as the second candle.

• Island Reversal

  IntermediateGlossary

  An island reversal is a group of bars cut off by a gap on each side: price gaps in the trend's direction, trades for a while, then gaps the other way. It leaves recent buyers or sellers trapped and can mark a sharp turn.

• Kicker Pattern

  AdvancedGlossary

  A kicker pattern is a sharp two-candle reversal: a candle in one direction is followed by a candle that gaps the other way and keeps going, often after sudden news. It is rare but treated as one of the strongest candlestick signals.

• Killzones

  AdvancedGlossary

  Killzones come from the ICT (Inner Circle Trader) school: a few hours around the Asian, London and New York opens when volume and volatility usually peak. Followers only look for setups inside those windows.

  Trading-community term: educators use it in different ways and there is no universally agreed definition.

• Market Noise

  BeginnerGlossary

  Noise is the random back-and-forth of prices — and the flood of headlines and opinions — that carries no real information about direction. Higher timeframes, moving averages and clear rules all help separate signal from noise.

• Piercing Line and Dark Cloud Cover

  IntermediateArticle in preparation

  A piercing line forms after a decline: a long bearish candle is followed by a bullish one that opens lower but closes above the midpoint of the first body. Dark cloud cover is the bearish mirror image at the top of a rally.

• Pin Bar

  BeginnerArticle in preparation

  A pin bar has a small body and one long tail, like a pin: price stabbed into a level and was thrown back. A long lower tail at support hints buyers are defending it; a long upper tail at resistance hints sellers are. Hammers and shooting stars are pin bars.

• Profit Taking

  BeginnerArticle in preparation

  Profit taking is selling after a rise to lock in gains. When many traders do it at once — after a big rally or ahead of a holiday — prices can pull back even without bad news.

• Quasimodo Pattern

  AdvancedGlossary

  The Quasimodo pattern is a reversal setup in which price makes a higher high, then breaks below the previous low, and traders then look to sell a retest of the left shoulder's level. In shape it resembles an uneven head and shoulders.

  Trading-community term: educators use it in different ways and there is no universally agreed definition.

• Rally

  BeginnerArticle in preparation

  A rally is a period of rising prices after a decline or a pause. A rally inside a bear market — a relief or bear-market rally — can be sharp but short-lived.

• Rectangle Pattern

  BeginnerArticle in preparation

  A rectangle pattern forms when price bounces between flat support and resistance, showing a pause in which buyers and sellers are balanced. A close outside the box sets the direction, and the box's height is a common target.

• Rising and Falling Three Methods

  IntermediateGlossary

  Rising three methods is a continuation pattern: a long bullish candle, three small candles drifting down inside its range, then another long bullish candle to a new close high. Falling three methods is the bearish version.

• Rounding Bottom

  IntermediateGlossary

  A rounding bottom is a slow, U-shaped reversal pattern in which selling fades, price levels out and buyers gradually take control. It forms over weeks or months and is confirmed when price breaks above the pattern's starting level.

• Smart Money ConceptsSMC

  AdvancedArticle in preparation

  Smart Money Concepts, or SMC, is a social-media-born approach that reads charts as the footprints of banks and funds, using ideas such as breaks of structure, liquidity sweeps, order blocks and fair value gaps. Its vocabulary varies from teacher to teacher.

  Trading-community term: educators use it in different ways and there is no universally agreed definition.

• Spinning Top

  BeginnerArticle in preparation

  A spinning top is a candle with a small body and upper and lower wicks of similar length. Buyers and sellers both pushed price around but neither won, so it signals indecision — a possible pause or turn when it appears after a strong move.

• Three Inside Up and Down

  IntermediateGlossary

  Three inside up is a bullish harami followed by a third candle that closes above the first candle's high; three inside down is the bearish version. The third candle confirms the reversal that the harami only hinted at.

• Three Outside Up and Down

  IntermediateGlossary

  Three outside up is a bullish engulfing pattern followed by a third candle that closes higher still; three outside down is the bearish version. The extra candle confirms the engulfing signal.

• Tweezer Tops and Bottoms

  BeginnerArticle in preparation

  Tweezers are two neighbouring candles with matching highs (tweezer top) or matching lows (tweezer bottom), usually of opposite colours. The repeated rejection of the same level hints at a possible reversal, which still needs confirmation.

• Whipsaw

  BeginnerArticle in preparation

  A whipsaw is price jerking one way and then sharply the other, so a trader is stopped out of a position just before the market goes in the original direction. Trend-following systems suffer most from whipsaws in sideways, choppy markets.