Trading Glossary

The foundational risk management rule: never risk more than 1-2% of your total account balance on a single trade. This ensures you can survive a string of losses. A 50% drawdown requires a 100% gain to recover.

The 13-period EMA, displayed in red. Known as the "Ketchup" line. When the 5 EMA crosses the 13 EMA, it signals a shift. The Ketchup Collapse (KC) exit triggers when a candle body closes over the red line.

The 200-period EMA, displayed in white. Represents the major trend direction. In BTS trades, the White EMA is the take-profit target. Price between the Aqua (50) and White (200) defines the BTS zone.

The 3-Candle Rule (3 Candles of Life): if your trade is not in profit after 3 candle closures from entry, exit immediately. The entry candle counts as candle 1, the decision candle is candle 2. This rule saves accounts by cutting losers quickly.

The 5-period Exponential Moving Average, displayed in yellow. It reacts fastest to price changes and is the first to shift direction. Used alongside the 13 EMA to identify trend shifts.

The 50-period EMA, displayed in aqua/cyan. Called "The Water" because price always returns to it eventually. Central to the 50/50 Bounce trade and the BTS trade. The most important EMA in the system.

The second signature trade. A trend continuation trade from the Fringe (near the 50 EMA). Everything returns to the Aqua. Process: identify the Fringe on the 50 EMA, wait 1.5 hours after the break, then enter a trend trade with shifts and sauce confirmation.

A precision entry at the 50% retracement of a market structure move. Combines the Fibonacci 50% level with EMA alignment and sauce confluence. Used for swing trades where price retraces exactly half of the prior move before continuing. The intersection of Fibonacci, EMAs, and sauce creates a high-probability zone.

For entries based on EMA shifts only (not sauce candles): if the trade is not profitable after 8 candle closures, exit. Shift entries need more time to develop than sauce entries, hence the extended window. Does not apply to sauce candle entries.

The 800-period EMA, displayed in blue. Represents the long-term macro trend. Price rarely reaches it, but when it does, it often signals major reversals or extremely strong trends.

The Asian range, defined as the first 32 candles of the 15M chart from 5pm to 1am EST. For the Vector trade, the A-range must be under 50 pips for major pairs and 75 pips for minors. The A-range sets the initial high and low that the Vector either pushes through or fakes out.

A sauce candle formation that develops rapidly during high-momentum market conditions. The sauce candle forms quickly, requiring fast execution and pre-planned entries. Most common during the London/NY session overlap when volatility peaks. Same CUT/LOCATION/SPACE rules apply, but the window to enter is shorter.

Average Daily Range divided by 3. This calculation determines how far a currency pair can reasonably push in a single session. Used to set realistic take-profit targets and assess whether there is enough "space" for a trade to reach its target.

The weekly preparation process for identifying potential trade setups. Start on the 4H timeframe to identify major levels and EMA positions. If the 1H timeframe syncs with the 4H analysis, the pair goes on the hit list. If 1H doesn't sync, skip it.

Bigger Cut Location Space - the foundational validation rules for OG Regular and OG Mini sauce patterns. BIGGER: the sauce candle must be significant in size. CUT: the 13 EMA must cut through both candle bodies. LOCATION: the pattern must form at a valid EMA level. SPACE: there must be room for price to reach the next target.

The wave structure visible on the 800 EMA (Blue). Shows macro trend direction and overall market strength. The cardinal rule: never fight the Blue Wave direction. Used to filter trade direction on lower timeframes — if Blue Waves point up, only take buys on smaller charts.

An advanced precision entry at major confluence zones. Named for its reliability — "money in the bank." Requires multiple confluences aligning simultaneously: EMA level + sauce candle + TDI confirmation + session timing + M/W pattern. The highest-probability setup in the system when all conditions are met.

Between The Sheets - the third signature trade. A countertrend trade between the 50 EMA (Aqua) and 200 EMA (White). Process: wait for price to break the Water (50 EMA), then pull back, find sauce, and take profit at the White (200 EMA). Always requires 1:2 risk-reward or higher.

Candlestick-based Multi-EMA-Grid confluences. Uses candle structure analysis at MEG (Multi-EMA-Grid) levels for precision entries. Combines traditional candlestick pattern recognition with MEG level analysis to identify high-probability setups where candle formations align with key EMA grid zones.

The practice of reinvesting trading profits to increase position sizes proportionally. "What 5% a day can do" is a core teaching: starting with $500 at 5% daily growth, the balance compounds dramatically over 53 days. The math behind long-term trading success.

The practice of systematically growing a funded account by increasing contract or lot size as profits accumulate. Start conservative with minimum position sizes, then scale up methodically as your balance grows. Key to maximizing prop firm payouts over time. Patience and consistency beat aggressive sizing.

When multiple trading signals or conditions align at the same price level or time. Examples: EMA stack + sauce candle + TDI SFBW + session time + M/W pattern. More confluence = higher probability trade. Always seek 3+ confirmations before entering.

A specific price level where three or more trading signals align at the same time. Examples include: EMA level + sauce candle + TDI signal + session timing + market structure pattern. More confluence factors = higher probability trade. The Brinks Trade is the ultimate confluence zone setup.

Position sizing in futures markets using contracts rather than lots. 1 ES contract = $50/point exposure. Scale: Micro (1/10th of a mini) → Mini (1x) → Standard. Start small with micros, compound up to minis as your account grows. Proper contract sizing is the foundation of futures risk management.

A technique for determining profit targets by counting EMA levels between entry and potential targets. Count the number of EMAs between your entry point and where price could reach. More EMA levels crossed = stronger move. Used to set realistic take-profit zones and assess trade potential.

CUT: The 13 EMA must cut through both candle bodies. LOCATION: The sauce must form at a significant level (EMA, support/resistance). SPACE: There must be room for price to move to the next EMA or target level. All three must be present for a valid sauce entry.

The quiet period between major trading sessions when volatility drops significantly. Trading during dead gaps is risky due to thin liquidity and unpredictable price movements. Avoid entering trades during these periods.

Futures contract tracking the Dow Jones Industrial Average (30 stocks). 1 point = $5. The least volatile of the three major index futures (ES, NQ, YM). Good for beginners transitioning from forex to futures due to smaller tick values and more predictable price action.

Futures contract tracking the Nasdaq-100 index. 1 point = $20 (4 ticks at $5 each). More volatile than ES, offering larger moves but requiring tighter risk management. Micro version (MNQ) = $2/point. Good for momentum-based Matrix setups due to its strong directional moves.

The most liquid futures contract in the world. Tracks the S&P 500 index. 1 point = $50 (4 ticks at $12.50 each). Micro E-mini (MES) = $5/point for smaller accounts. Primary instrument for Matrix futures trading. Deep liquidity means tight spreads and reliable fills.

When all 5 EMAs (5, 13, 50, 200, 800) are lined up in order, the trend is strong. For buys: EMAs stacked below price. For sells: EMAs stacked above price. When EMAs bunch together, expect consolidation or reversal.

End-of-Day rules specific to prop firm evaluations. Some firms require all positions to be closed before market close. Trailing drawdown may reset at end of day depending on the firm. Critical to understand before starting a funded evaluation — violating EOD rules can result in immediate disqualification.

A prop firm trading account funded with real capital after the trader passes an evaluation phase. Trader keeps 80-90% of profits. Rules include daily loss limits, maximum drawdown thresholds, and minimum trading days. The goal of every MTM evaluation — prove your consistency, get funded, scale up.

A standardized agreement to buy or sell an asset at a predetermined price at a specified future date. Traded on the CME (Chicago Mercantile Exchange). Key markets: ES (S&P 500), NQ (Nasdaq), YM (Dow), CL (Crude Oil), GC (Gold). Unlike forex, futures have expiration dates and are traded in contracts, not lots.

The trading window from 1am to 5am EST, overlapping the late Asian and early London sessions. This is when the Vector trade typically sets up and BTS entries often occur. Historically produces the most reliable trade setups.

The fundamental choice every trader faces. The Yellow Pill represents greed: overtrading, moving stop losses, ignoring rules. The Purple Pill represents discipline: following the plan, honoring stops, taking only A+ setups. Choose the purple pill.

Advanced micro-structure analysis within a Vector formation. Involves breaking down the Vector's internal candle patterns to find the optimal entry point. Rather than entering on the Vector signal alone, dissect the candles inside it for a precision entry with tighter stop loss placement.

An intraday variant of the 50/50 Bounce designed for shorter timeframes (5M, 15M). Price touches the 50 EMA on lower timeframes and bounces with sauce confirmation. Faster setup with tighter stops compared to the standard 50/50 Bounce. Ideal for day traders who want quicker entries and exits.

An exit strategy triggered when a candle body fully closes on the opposite side of the 13 EMA (Red/Ketchup line). For a buy trade, KC triggers when a candle body closes below the 13 EMA. For sells, when it closes above.

The trading window from 6am to 10am EST, covering the London/NY overlap. This is when volatility peaks and the best sauce candle formations appear. The most active trading session for intraday traders.

The 50 level on the TDI indicator (Yellow line), acting as the equilibrium line. TSI crossing above L50 signals bullish momentum; below signals bearish. Acts as a dynamic support/resistance level for TDI readings.

When the TSI (Blood) dramatically crosses the Liquid 50 line against your trade direction. The cardinal rule: NEVER go against the Liquid Collapse. It signals a fundamental shift in momentum that overrides all other signals.

A two-candle pattern where one candle's body is significantly longer than the other. The 13 EMA must cut through both bodies. Must satisfy CUT, LOCATION, and SPACE rules. Often signals strong momentum continuation.

The standard unit of measurement for position size. Standard lot = 100,000 units of base currency. Mini lot = 10,000 units. Micro lot = 1,000 units. Position sizing determines pip value and total risk per trade.

Double top (M pattern) and double bottom (W pattern) formations. Key rule: the second leg should NOT take out the first leg. If it does, the pattern is invalidated. Used to confirm Vector reversals and identify key support/resistance levels.

The pattern of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend). Shifts in market structure — when the pattern breaks — signal potential trend changes. Foundation of all EMA-based analysis. Always identify market structure before looking for trade setups.

Sauce candle patterns that form specifically at Multi-EMA-Grid (MEG) levels. Higher probability than regular sauce because they occur at key EMA grid confluences. The 4 levels of MEG provide multiple entry zones, each with its own probability profile. MEG + sauce = enhanced accuracy.

Morning/Evening Star - a 3-candle formation. Candle 1 is a strong directional candle, Candle 2 is a small indecision candle (the star), and Candle 3 is a strong candle in the opposite direction. Morning Star is bullish, Evening Star is bearish.

Same structure as OG Regular (Bigger Candle Littler Sauce) but smaller in overall size. Still requires the 13 EMA to cut through both candle bodies. Often found in lower timeframes or during less volatile sessions.

The original sauce candle pattern validated by BCLS (Bigger Cut Location Space). A large candle followed by a smaller candle. The 13 EMA must CUT through BOTH candle bodies, at a valid LOCATION (EMA level), with SPACE to reach the target. Entry on the break of the sauce candle.

Pull Back Is Coming - a small candle followed by a large engulfing candle in the opposite direction. Signals that a pullback to the EMAs is imminent. Used as a warning to manage existing positions or prepare for reversal entries.

Pin bars and railroad track patterns formed by long wicks. Pins show price rejection - long upper wick = sellers rejected buyers. Railroads are consecutive candles with opposite bodies but similar wicks, signaling indecision. Used to identify trapped traders.

Percentage in Point - the smallest standard price movement in forex. For most pairs, 1 pip = 0.0001. For JPY pairs, 1 pip = 0.01. Pip value depends on position size and the currency pair being traded.

A high-probability trade setup triggered when TDI reaches super extreme levels. Price pulls back to the 4H Aqua (50 EMA). Requires TDI confirmation with RSI at extremes, TSI confirmation, and sauce candle entry. One of the highest win-rate setups in the system.

A systematic, controlled approach to recovering from account drawdowns. Key principles: reduce position size immediately, focus exclusively on A+ setups, use tighter risk management, and never revenge trade. Systematic recovery prevents emotional spiraling and account blowup. Discipline over desperation.

The ratio between potential loss (risk) and potential gain (reward). The More Than Money system requires a minimum 1:2 risk-reward ratio. This means for every $1 risked, you target $2 in profit. BTS trades especially must maintain 1:2 or higher.

The RSI component of TDI (Green line), nicknamed "Shark Fin." When RSI leaves the Volatility Bands, it signals extreme momentum. The Shark Fin formation occurs when RSI pokes out of the bands and curves back, resembling a shark fin. Key component of SFBW.

Shark Fin Blood in Water - the key TDI confirmation. Occurs when RSI (Shark Fin) leaves the Volatility Bands and TSI (Blood) surfaces above/below the L50. Confirms extreme momentum and potential reversal. One of the strongest confirmation signals.

"I am a sniper in the market. My entry defines my destiny." The core psychological principle: wait for the perfect setup, execute with precision, and maintain discipline. Quality over quantity. One perfect trade beats ten mediocre ones.

The difference between the bid (sell) price and the ask (buy) price. This is the broker's implicit fee on every trade. Wider spreads mean higher costs. Stop losses should account for the spread (spread x2 rule).

Institutional price manipulation where price spikes sharply to take out retail stop losses before reversing in the intended direction. Common before major moves and news events. Defeat stop hunts by placing stops beyond institutional zones: spread x2 plus a buffer. Understanding this concept is key to proper stop placement.

A predetermined exit point to limit losses. Placement: spread x2 above/below the highest high (HH) or lowest low (LL), or above/below the sauce candle plus 10 pips. Always set your stop loss before entering a trade.

The 4th Signature Trade. A momentum continuation setup where price runs away from the EMAs in one direction without pulling back. Ride the trend, don't fight it. Entry is taken on a smaller timeframe sauce candle after confirming the direction of the move. Requires strong EMA stack alignment.

The 5th Signature Trade. A rejection/bounce trade off the 50 or 200 EMA after a Straightaway move. Price extends far from the mean, then snaps back. Look for sauce formation at the EMA level combined with TDI at an extreme reading. The rubber band effect — price always returns to the Aqua.

The Traders Dynamic Index combines multiple indicators into one: RSI/Shark Fin (Green line), TSI/Signal/Blood (Red line), Liquid 50/L50 (Yellow line), and Volatility Bands (Blue lines). Used to confirm trade entries and identify exhaustion. Key formations include SFBW, VBC, and LC.

The area around the 50 EMA (Aqua) where price consolidates before bouncing. Identified when price reaches the Aqua and pauses. The 50/50 Bounce trade enters after a 1.5-hour break at the Fringe.

When the 5 EMA (Yellow) crosses the 13 EMA (Red), it signals a shift in momentum. A bullish shift occurs when 5 crosses above 13; bearish when 5 crosses below 13. Critical confirmation for Vector entries.

A 4-candle sauce pattern: a long candle, followed by two small candles, then another long candle. The two small candles represent accumulation/distribution. The final long candle confirms direction. The most powerful sauce formation.

The first signature trade. A fast magnitude push or fake-out toward the EMAs on the 15M timeframe. The Vector creates the high or low of the day. Entry follows a 10-step process: identify A-range, determine direction, find pins, look for M/W patterns, confirm shift, and find sauce.

The minimum price movement in a futures contract. ES = $12.50/tick (4 ticks per point), NQ = $5/tick (4 ticks per point), YM = $5/tick. Critical for position sizing and risk calculation. Knowing your tick value is essential before placing any futures trade.

How long to hold trades based on the entry timeframe. 1M chart = 3 minutes, 5M = 15 minutes, 15M = 45 minutes, 1H = 3 hours, 4H = 12 hours, D1 = 3 days. Helps set realistic expectations for trade duration.

A prop firm evaluation rule where the maximum loss threshold moves upward as your account profits grow, but never moves back down. This effectively locks in profits as a floor. Different from static drawdown, which stays fixed from the starting balance. Understanding this rule is critical before trading any funded evaluation.

The True Strength Index component of TDI (Red line), nicknamed "Blood." Confirms the trend direction and strength. In the SFBW formation, TSI "surfaces" (crosses above or below the Liquid 50 line) to confirm the trade direction.

Volatility Band Collapse - an exit signal triggered when the TDI Volatility Bands squeeze or collapse together. Indicates momentum exhaustion and potential reversal. One of three primary exit strategies alongside KC and LC.

The outer bands on the TDI indicator (Blue lines). When RSI reaches or exits the Volatility Bands, price is at an extreme. VB Collapse (VBC) is an exit signal when TDI bands squeeze together. TDI levels: 70 (super extreme), 60 (extreme), 50 (L50), 40 (extreme), 30 (super extreme).