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Lexicon - Bear Market Trader
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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

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 
Exam­ples of a few mar­ket narratives
  • 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