Lexicon

Lexicon

• KC = Keltner Channels
• UKC = Upper Keltner Channel
• LKC = Lower Keltner Channel
• VWAP = Volume-Weighted Average Price
• 50MA/200MA = 50/200-period Moving Average
• DBD = Drop Base Drop
• RBR = Rally Base Rally
• RBD = Rally Base Drop
• DBR = Drop Base Rally
• NSF = Normal Supply Formation
• NDF = Normal Demand Formation
• Phase 1 = Accumulation
• Phase 2 = Mark-Up
• Phase 3 = Distribution
• Phase 4 = Mark-Down
• MN = Monthly Chart
• W1 = Weekly Chart
• D1 = Daily Chart
• H4 = 4 Hour Chart
• H1 = 1 Hour Chart
• M30 = 30 Minute Chart
• M15 = 15 Minute Chart
• M5 = 5 Minute Chart
• TF = Time Frame
• LTF = Lower Time Frame (anything below H4)
• MTF = Medium Time Frame (H4, D1)
• HTF = Higher Time Frame (W1, MN)
• UT = Uptrend
• DT = Downtrend
• CAR = Confirm As Resistance
• CAS = Confirm As Support
• BO = Break Out
• BD = Break Down
• IB = Initial Balance
• IBR = Initial Balance Range
• IB Low = IBR Lower Edge
• IB High = IBR Higher Edge
• Sustained Auction = A sustained move in the direction of the extension of IB
• Failed Auction = Failure to find business outside of IBR thus returning
• R = Range
• PA = Price Action
• DTTZ = Day Trading Time Zone
• C = Conterminous line or Supply/Demand line
  • Example: D1-C-D 1.9xxxx means a Daily timeframe supply/demand line has been formed at 1.9xxxx
• HiDC = High in Distribution Curve
• LiDC = Low in Distribution Curve
• FT = Forward-Testing

Market Narratives

This is a rudimentary explanation of how I view market narratives. I don’t use these as end all be all explanations of what SHOULD happen. Instead I use them as odds enhancers combined with Supply and Demand zones as well as the (im)balance at the open. This helps me form hypotheses that help me guide my trading decisions during the trading session. Then I use price action and order flow reading through market profile to gauge intraday sentiment. This helps me to either align myself with a potential market narrative or disqualify the thesis. 

The VWAP is interchangeable with other averages like a 50 or 200-period (simple) moving average or Lower/Upper Keltner Channel

• TF VWAP (in UT/DT) TC
  • Timeframe VWAP Trend Continuation
    • When in a trend price often tests VWAP before continuing
• TF VWAP in DT BO
  • Timeframe VWAP in Downtrend Break out
    • Price breaks out from VWAP after a downtrend. As such the sentiment shifts to favor longs until a critical opposing level has been hit. 
• TF VWAP in DT BO to CAS
  • Timeframe VWAP in Downtrend Break out to Confirm as Support
    • After the break out price ‘usually’ goes back to test the break out level (in this case VWAP). As such the sentiment shifts to favor shorts.
• TF VWAP in DT CAS
  • Timeframe VWAP in Downtrend Confirmed As Support
    • After testing that Break Out level and price confirms a reversal at said level, now that level is Confirmed As Support. As such the sentiment shifts to favor longs.
• TF VWAP in UT BD
  • Timeframe VWAP in Uptrend Break Down
    • Price breaks down from VWAP after an Uptrend. As such the sentiment shifts to favor shorts until a critical opposing level has been hit. 
• TF VWAP in UT BD to CAR
  • Timeframe VWAP in Uptrend Break Down to Confirm as Resistance
    • After the break down price ‘usually’ goes back to test the break down level (in this case VWAP). As such the sentiment shifts to favor longs.
• TF VWAP in DT CAR
  • Timeframe VWAP in Uptrend Confirmed As Resistance
    • After testing that Break Down level and price confirms a reversal at said level, now that level is Confirmed As Resistance. As such the sentiment shifts to favor shorts.
• TF UKC/LKC in UT/DT CAS/CAR
  • Timeframe Upper/Lower Keltner Channel in Up- Downtrend Confirm as Support/Resistance