P1:a/b P2:c/d QC:e/f T1:g
gloss JWBK182-McDowell April 25, 2008 16:35 Printer: Yet to come
Glossary 201trend exhaustion When a trend ends it has reached trend exhaustion. With the
ART system, trend exhaustion generally occurs after four to five consecutive
primary pyramid trading pointsin the same direction.
trend trader The trend trader trades or invests in the direction of the overall
trend.
trending day A day that continued primarily in one trend direction, either up or
down, from open to close.
true range The greatest of the difference between the current high and the cur-
rent low, or the difference between the current high and the previous close, or the
difference between the current low and the previous close.
ungrounded assessments Trading and investing rules that try to forecast or pre-
dict the market. For example, MACD, stochastic and Elliott wave are ungrounded
assessments.
unrealized gain The appreciation in value of an asset that has not been sold—
paper gains.
unrealized loss The depreciation in value of an asset that has not been sold—
paper loss.
uptrend A general tendency for rising prices in a given market.
volatility Refers to the range of prices in a given time period. A highly volatile
market has a large range in daily prices, whereas a low-volatility market has a small
range of daily prices. This is a measure of price variability in a market. A volatile
market is a market that is subject to wide price fluctuations.
volume The total number of shares or contracts traded during a given period.
whipsaw A price pattern characterized by repeated, abrupt reversals in trend. The
term is often used to describe losses resulting from a choppy or trendless market.
win ratio Number of winning trades divided by the total number of trades equals
the win ratio. Example a win ratio of 60 percent means you have 60 percent winning
trades.