Trading Glossary

The lowest price someone is currently willing to accept to SELL. If you want to BUY at the market, this is the price you pay.

When aggressive orders hit a price level but fail to move price, indicating large passive orders are absorbing the aggression. A key reversal signal on footprint charts.

The price range formed during the Asian session (8:00 PM to 12:00 AM ET). Acts as the daily reference range — London and New York sessions target the Asian high and low for liquidity sweeps.

The first phase of the Power of 3 cycle. Price consolidates in a tight range while Smart Money quietly builds positions. Creates liquidity on both sides of the range.

The framework stating that markets alternate between balance (rotation around fair value) and imbalance (trending). Balanced markets are range-bound; imbalanced markets trend directionally.

A market order (or marketable limit) that crosses the spread to execute immediately. Consumes liquidity. The aggressive trader pays the spread for the privilege of trading right now.

A VWAP that starts from a specific event rather than the session open — common anchors include the prior swing high/low, an FOMC release, an earnings event, or a breakout candle. Reveals the average price paid by participants since that anchor.

Common abbreviation for Anchored VWAP. A VWAP calculated from a chosen anchor point (event, swing, breakout) instead of the session open.

The highest price someone is currently willing to pay to BUY. If you want to SELL at the market, this is the price you get.

The two columns in a footprint bar showing volume traded at the bid (aggressive sellers) on the left and volume traded at the ask (aggressive buyers) on the right.

Confirmation that a trend change has occurred. Happens when price breaks beyond the next swing point after an initial Change of Character, establishing a new directional bias.

A failed order block that flips from support to resistance (or vice versa) after being broken. Acts as a key level for entries on retests.

Stop losses from short sellers and buy stop orders sitting above price action, typically above equal highs or swing highs. When price sweeps these levels, it triggers a burst of buy orders that institutions sell into.

A profile shape that is fat at the bottom and thin at the top, indicating a sell-off or liquidation session. The POC sits in the lower portion. Check delta to confirm whether it was real selling or long liquidation.

A multi-day price range where value areas overlap across sessions, forming a bracket. Price rotates within the bracket until initiative activity breaks one side. Failed breakouts from balance areas produce high-probability reversals to the opposite edge.

The highest price someone is currently willing to pay to buy. The top of the bid stack on the DOM. If you sell at market, this is what you receive (per share/contract).

The lowest price someone is currently willing to sell at. The bottom of the ask stack on the DOM. If you buy at market, this is what you pay. Also called the best offer.

Synonym for Best Ask. The lowest price at which someone is willing to sell. 'Lifting the offer' = paying this price to buy aggressively.

The difference between the best bid and best ask, in ticks or dollars. Liquid futures (ES, NQ) almost always have a 1-tick spread during RTH. Wider spreads mean less liquidity and higher trading costs.

A large concentration of bid size at one or more nearby price levels — the visible wall buyers are defending. Real walls hold when tested; fake walls (spoofs) get pulled.

Exhaustion at a high — bar makes a new high but the top few prices have minimal ask-side volume. Means buyers ran out before sellers showed up. Often precedes a sharp reversal lower.

Price prints a lower swing low while cumulative delta prints a higher swing low. Sellers extended price further but with less aggression — the flush is losing fuel. A buy signal at the new low.

Price prints a higher swing high while cumulative delta prints a lower swing high. Buyers extended price further but with less aggression — the rally is losing fuel. A sell signal at the new high.

The peak emotional event of a rally — a single bar with massive volume (2-5x average) at the top of an extended move, signaling late-buyer FOMO. Stacked imbalances at the new high. The rally is exhausting; reversal usually follows within 1-2 bars.

A running total of delta across the session, tracking the cumulative difference between aggressive buying and selling. Used to identify divergences between price and order flow.

The first signal that a trend may be ending. Occurs when price breaks a key swing point in the opposite direction of the prevailing trend — the early warning before BOS confirms.

A pullback or retracement that follows an impulse leg. Moves against the trend, is typically slower and choppier, and provides the entry opportunity for the next impulse.

A profile that combines multiple sessions into one, revealing the bigger-picture value areas and POCs. Composite levels carry more weight than single-session levels because they represent sustained institutional consensus.

To execute a trade by paying the unfavorable side of the bid-ask spread — buying at the ask or selling at the bid. The cost of immediacy. Every market order crosses the spread.

Adjacent bars sharing the same POC price — the market keeps returning to the same fair value. Strong magnet level. The longer it persists, the more meaningful the eventual break.

Abnormally high volume (2-5x recent average) on a single bar that ends a trend. Distinguished by extreme price reaction — sharp reversal within 1-2 bars. Different from stopping volume, which produces sideways consolidation rather than a sharp reversal.

The moment when the last holders of losing positions give up and exit. Marked by panic volume, stacked imbalances on the losing side, and extreme delta. Usually marks a major turning point — once the last weak hands are out, there is nobody left to sell (or buy).

A volume profile aggregated across multiple sessions (typically 5 days, 1 week, or 1 month). Reveals stronger structural levels than single-session profiles because composite POCs and value areas represent sustained two-sided interest.

The Point of Control of a composite (multi-session) volume profile. Carries more weight than any single-session POC because it represents the most-traded price across an extended period.

Short for the Dow Jones Industrial Average (DJIA) — an index of 30 large, established American companies (Boeing, Coca-Cola, Home Depot, McDonald's, etc.). Older and narrower than the S&P 500. Traded as futures under the symbol YM (or MYM for the micro).

The difference between ask volume and bid volume at a specific price level or for an entire bar. Positive delta indicates more aggressive buying; negative delta indicates more aggressive selling.

A chart overlay showing the net delta (ask minus bid volume) for each bar as a colored bar. Blue indicates positive delta; magenta indicates negative delta.

A view inside each footprint bar showing the net delta at every price level, colored by direction. Reveals where buying or selling aggression was concentrated within the candle.

A price area where buying pressure previously overwhelmed selling, causing price to rally. When price returns to this zone, expect buyers to step in.

The third phase of the Power of 3 cycle. After manipulation sweeps liquidity, price reverses sharply in the true direction. Smart Money distributes their position into retail momentum.

A strong, impulsive price move characterized by large-bodied candles that shows clear institutional commitment. Displacement creates FVGs and confirms that Smart Money is active.

The lower half of a swing range (below the 50% equilibrium level). Price is cheap relative to fair value. Look for long entries in discount, not shorts.

A balanced, bell-curve-shaped profile — fat in the middle, thin at the extremes. Indicates a two-sided session where neither buyers nor sellers dominated. The POC is near the center of the range.

A profile with two separate clusters of activity connected by a thin zone of single prints. Indicates the market repriced from one value area to another during the session, often triggered by a news event or catalyst.

A real-time view of every resting limit order at every price level around the current market. Three columns: bid size on the left, price in the middle, ask size on the right. Shows passive intent — what traders are willing to do, not what they have done. Also called Level 2 data, the order book, or the ladder.

A private trading venue where orders do not display on public order books. Used by institutions to execute large orders without telegraphing intent. The trades only become visible after they fill, on the consolidated tape.

When price and cumulative delta disagree at swing extremes. Price makes a new high but delta makes a lower high (bearish), or price makes a new low but delta makes a higher low (bullish). Order flow weakening before price confirms.

The E-mini S&P 500 futures contract. Tracks the S&P 500 index. 1 tick = $12.50, 1 point = $50. One of the most heavily traded futures contracts in the world.

A smaller electronic version of a full-size futures contract. "E" for electronic, "mini" for smaller. ES, NQ, and YM are all E-mini contracts. Still large enough that most beginners should start with micros instead.

Extended Trading Hours — the overnight and premarket periods outside RTH. The market is open but volume is thin, spreads widen, and moves can be erratic. Most pros watch ETH but don't trade it.

The 50% level of a swing range — the midpoint between the swing high and swing low. Represents fair value. Price above equilibrium is premium; price below is discount.

A single-print tail at the top or bottom of a Market Profile, showing strong rejection at the extreme. Excess confirms the auction at that price is complete — the market does not need to revisit.

When a price extreme is reached but the aggressive volume that should be driving it is missing. The bar makes a new high (or low) but the top (or bottom) prices show almost no aggressive volume. Classic reversal signal — the move ran out of participants.

Wyckoff principle — high volume (effort) without proportional price movement (result) signals exhaustion. Lots of activity, no progress = the trend is being absorbed. Foundational to spotting stopping volume and absorption.

A chart that displays the volume traded at each price level inside every candle, showing bid and ask activity separately. It reveals the order flow hidden inside standard candlesticks.

A three-candle pattern where the wick of Candle 1 does not overlap with the wick of Candle 3, leaving a gap where only Candle 2 traded. This gap is a price inefficiency — the market moved so fast that two-sided trading never happened at those prices. Price tends to return to fill FVGs.

When price breaks beyond a balance area but fails to establish acceptance (value) in the new zone and re-enters the bracket. Expect a full rotation to the opposite side. One of the highest-probability Market Profile setups.

First In, First Out — the matching rule used by most futures exchanges (CME, ICE). At a given price level, the oldest resting limit order fills first. Determines queue position.

A move down that prints a new low but with weak delta — sellers couldn't muster the aggression they had at the previous low. Often forms the bottom of a swing. Confirmed by bullish divergence.

A move up that prints a new high but with weak delta — buyers couldn't muster the aggression they had at the previous high. Often forms the top of a swing. Confirmed by bearish divergence.

A breakout above resistance (or below support) that immediately reverses, typically within 1-3 bars. Footprint shows exhaustion at the new extreme + absorption + delta divergence. The reversal traps breakout chasers and triggers their stops.

The 61.8% Fibonacci retracement zone — the most watched retracement level among institutional traders. Corrections that hold at the golden pocket typically produce the strongest measured move continuations.

A swing high that is above the previous swing high. A series of higher highs indicates bullish momentum and an uptrend.

A swing low that is above the previous swing low. Combined with higher highs, it confirms bullish market structure.

To sell aggressively at the best bid, taking the resting buy limit orders out of the book. The opposite of lifting the offer. Prints on the bid side of footprint charts and shows up as negative delta.

A limit order that does not appear on the DOM at all — fully invisible until it executes. Some venues (especially equities) support hidden orders. Distinct from icebergs which show a partial tip.

Continuation signal (opposite of regular divergence). Hidden bullish: higher low in price + lower low in delta = uptrend will continue. Hidden bearish: lower high in price + higher high in delta = downtrend will continue. Often more reliable for trend-following entries than regular divergence.

The longest timeframe in a multi-timeframe stack — typically daily or 4-hour. Used to determine overall trend bias and identify key structural levels. The HTF tells you which way to lean before any intraday signal matters.

A local high-volume area on the volume profile — a price range where the market spent a lot of time and transacted heavy volume. Acts as support/resistance; price tends to pause and react at HVNs.

A list of stocks tracked together as a single number. The number represents the combined performance of the whole group, not any individual stock. Example: the S&P 500 is an index of 500 large U.S. companies.

A price level where one side overwhelms the other by a ratio of 3:1 or more. Buying imbalances show aggressive buyers dominating; selling imbalances show aggressive sellers dominating.

A sharp, directional price move that establishes or continues a trend. Characterized by large candles and strong momentum. Creates new swing points and breaks structure.

A smaller liquidity grab that lures retail traders into positions before the real sweep happens. Acts as bait — creates false confirmation that traps traders, building more liquidity for the actual move.

The price range established during the first hour of the regular trading session (A and B periods). The IB width helps predict day type — narrow IBs produce trend days, wide IBs produce range days.

The highest price reached during the Initial Balance (first hour). Acts as intraday resistance. A break above IB High signals potential bullish extension.

The lowest price reached during the Initial Balance (first hour). Acts as intraday support. A break below IB Low signals potential bearish extension.

Buying at or above value, or selling at or below value — unexpected behavior that breaks the current range. Initiative activity creates new value areas. Follow initiative moves, do not fade them.

The highest bid and lowest ask currently available — the two prices where you can trade right now. Also called the NBBO (National Best Bid and Offer). The spread is the gap between them.

A large order that displays only a small visible portion (the 'tip') on the DOM. As the visible size gets filled, more is automatically released from the hidden total. Used by institutions to disguise size and avoid moving the market against themselves.

The total resting buy size at the best bid price. Watching this number shrink (without fills) often means buyers are pulling — a warning sign for shorts to take profit and for longs to be cautious.

The total resting sell size at the best ask price. Watching this number shrink (without fills) often means sellers are pulling — a warning that the offer side may not hold a test.

A price level that institutional execution is measured against — primarily VWAP. Funds executing large orders try to fill at or better than VWAP; missing it means they paid more than market average. Drives a lot of intraday flow.

When price breaks above the Initial Balance high (extension up) or below the IB low (extension down). Direction of extension is a strong intraday bias signal. Range extension of 1x IB or more = trend day potential.

A deceptive price move — typically during London Open — that sweeps liquidity in the wrong direction before the real daily move begins. Named after the biblical betrayal because it tricks traders into the wrong side.

Placing a limit buy order at the current best bid price — adding to the existing size at that level. You go to the back of the FIFO queue at that price. Used when you want to be passive at the inside but don't want to chase.

Placing a limit sell order at the current best ask price — adding to the existing size at that level. The mirror image of joining the bid.

Specific time windows during the trading day when institutional activity is highest. The main killzones are London Open (2-5am ET), NY Open (7-10am ET), and London Close (10am-12pm ET).

A position where you buy a contract expecting price to go up. "Going long" means you profit if the market rises.

An order to buy or sell only at a specific price or better. Your order sits and waits — if the market reaches your price, you get filled. If it doesn't, your order never fills. You control the price, but risk missing the trade.

A swing high that is below the previous swing high. A series of lower highs indicates bearish momentum and a downtrend.

A swing low that is below the previous swing low. Combined with lower highs, it confirms bearish market structure.

Resting orders in the market — stop losses and limit orders sitting at known price levels. Institutional traders need liquidity to fill large positions. Buy-side liquidity sits above price, sell-side below.

When price briefly pushes beyond a key level to trigger stop losses, then reverses. The signature of institutional activity — stops are triggered to create the liquidity institutions need to fill their orders.

The killzone from 2:00 AM to 5:00 AM ET when European banks begin trading. Often creates the Judas Swing by sweeping the Asian session range before the real daily move begins.

The minimum market data feed: best bid, best ask, last trade price, and last trade size. Shows only the inside market — no depth. Most retail brokers include Level 1 free.

The full order book showing depth — every resting bid and ask at every price level around the market. This is what powers the DOM. Usually a paid subscription on top of Level 1. Required for serious order flow trading.

Order-by-order detail beyond Level 2 — shows individual orders rather than aggregated size at each price. Reveals queue position, iceberg refills, and individual cancellations. Available on a few exchanges and primarily used by HFT firms.

Trader slang for the DOM. Reflects the visual layout — a vertical ladder of price levels with bid and ask sizes on either side. Scalpers say 'reading the ladder' to mean watching the DOM.

To buy aggressively at the best ask, taking the resting sell limit orders out of the book. This is what every aggressive buyer does. Prints on the ask side of footprint charts and shows up as positive delta.

A form of spoofing where the manipulator places fake orders at multiple price levels to create the illusion of a deeper book. Same intent as spoofing — to deceive — and same illegality. Same defense: wait for orders to be tested before trusting them.

A range of prices on the DOM with very little resting size — usually because liquidity was just pulled or because the price area is rarely traded. Price moves through vacuums very quickly because there's nothing to absorb the flow.

A price area with heavy resting size on the DOM — often where prior volume nodes, VWAP, or composite POCs sit. Price tends to pause or react when it reaches a liquidity pocket.

The shortest timeframe in a multi-timeframe stack — typically 1m, range bars, or tick bars. Used for trade triggers and execution timing. The LTF only matters when its signal aligns with the higher-timeframe bias.

A local low-volume area on the volume profile — a price range with minimal resting interest. Price moves quickly through LVNs because there is little to absorb the flow. Often called a 'volume gap.'

The Micro E-mini S&P 500 futures contract — 1/10th the size of ES. 1 tick = $1.25, 1 point = $5. The recommended starting contract for beginners because the smaller size means smaller risk per tick.

The Micro E-mini Nasdaq 100 futures contract — 1/10th the size of NQ. 1 tick = $0.50, 1 point = $2. Great for beginners who want exposure to the faster-moving Nasdaq without the full-size risk.

The Micro E-mini Dow futures contract — 1/10th the size of YM. 1 tick = $0.50, 1 point = $0.50. The smallest-dollar-value micro, useful for learning with very small accounts.

The Micro E-mini Russell 2000 futures contract — 1/10th the size of RTY. 1 tick = $0.50, 1 point = $5. Tracks small-cap U.S. stocks.

A futures contract that is 1/10th the size of its E-mini parent. Same chart, same signals, same strategies — smaller dollar values per move. MES, MNQ, MYM, and M2K are all micro contracts. The recommended starting point for every beginner.

The amount of money your broker holds while you have a futures position open. NOT the full price of the contract. For MES, day trading margin is typically $50 per contract. This is why you can trade futures with a small account — you only post a small fraction of the contract's total value.

An order to buy or sell RIGHT NOW at whatever price is currently available. Fastest execution, but you accept whatever price the market gives you (which may differ slightly from what you saw — called slippage).

A price projection where the distance of Leg A (impulse) is added to the correction low to project Leg B's target. Halsey's primary target is the -23.6% extension beyond the 100% level.

The second phase of the Power of 3 cycle. Price breaks out of the accumulation range in the wrong direction to sweep liquidity. This is the Judas Swing — the trap that provides institutional order fill.

The Power of 3 applied to daily and weekly cycles. Identifies the accumulation range, waits for the manipulation sweep, then enters during the distribution phase targeting opposite-side liquidity.

A price projection where Leg A's distance is added to the correction low to project Leg B's target. The -23.6% extension beyond 100% is Halsey's primary target in strong trends.

A charting method created by J. Peter Steidlmayer that organizes price data by time using TPO letters. The resulting profile shape reveals where the market accepted value and where it moved through quickly.

A participant who provides liquidity by placing resting limit orders on the DOM. Makers earn rebates on some venues (especially equities) since they make the market. Synonymous with passive participant.

A price level the market repeatedly gravitates toward — typically a naked POC, prior session POC, VWAP, or major composite reference. Magnet levels work because liquidity, unfinished business, and institutional reference points all concentrate at them.

Analyzing the same instrument across multiple timeframes (typically 3) — higher timeframe for bias, middle for setup, lower for execution. Take only trades where the lower-timeframe signal aligns with the higher-timeframe direction.

An index of the 100 biggest non-financial companies on the Nasdaq stock exchange — heavy on tech (Apple, Microsoft, Google, Meta, Tesla, Nvidia). Moves faster and more volatile than the S&P due to its tech concentration. Traded as futures under the symbol NQ (or MNQ for the micro).

The E-mini Nasdaq 100 futures contract. Tracks the Nasdaq 100 index. 1 tick = $5, 1 point = $20. Known for faster, more volatile moves than ES due to tech concentration.

The killzone from 7:00 AM to 10:00 AM ET — the highest volume session with the most reliable setups. Often defines the day's range and creates the real expansion move.

National Best Bid and Offer — regulatory term for the inside market. The highest bid and lowest ask aggregated across all venues trading the same instrument. Brokers are required to fill market orders at the NBBO or better.

A Point of Control from a prior session that price has never returned to test. Acts as a magnet — markets revisit naked POCs more often than chance would predict. Also called a virgin POC or untested POC.

The last opposing candle before an impulse leg. Marks the zone where the institutional order that initiated the move originated. A common entry point on retests.

The ideal entry point during a retracement, typically at the 62-79% Fibonacci retracement level of the impulse move. Aligns with order blocks and FVGs for precision entries.

The highest conviction open type. Price opens and drives aggressively in one direction with no significant pullback to the opening price. OTF participants decided before the bell. Produces trend days — do not fade.

Second-highest conviction open type. Price opens, probes a reference level to confirm no business exists there, then reverses and drives aggressively the other way. The failed test is the entry signal.

The Globex or ETH (Electronic Trading Hours) session that runs from the prior RTH close through the next morning's open. It establishes its own Value Area, POC, high, and low — reference levels that set the stage for the RTH session.

The complete list of all outstanding buy (bid) and sell (ask) limit orders at every price level for a given instrument. The DOM is a live visualization of the order book.

A large concentration of ask size at one or more nearby price levels — the visible wall sellers are defending. Real walls hold when tested; fake walls (spoofs) get pulled.

When one side of the DOM has significantly more resting size than the other — often calculated as (bid size − ask size) / total size at the inside. Strong imbalance is a short-term directional signal: heavy bid book often precedes upward moves.

The process by which your broker decides where to send your order — to which exchange or dark pool. Smart Order Routers (SOR) seek best execution. Some retail orders are 'sold' to wholesalers (Payment for Order Flow).

An opening pattern where price drives in one direction immediately at the bell with strong, persistent volume. No retracement. The market opens with a clear bias and runs. Trade with the drive on the first pullback.

An opening pattern where price briefly tests in one direction, then drives in the opposite direction with conviction. The initial test is a probe to find liquidity; the real move starts after the test fails.

An opening pattern where price stays in a narrow range with balanced two-sided action — no decisive direction. The market is in a 'let's see' mode. Wait for a breakout from the opening range before committing.

An opening pattern where price drives in one direction, hits a key reference level (PDH, PDL, weekly POC), and reverses hard. Often sets the day's high or low within the first 15-30 minutes.

Synonym for Open Rejection — initial drive that gets reversed at a key level early in the session.

The high-low range of the first N minutes of RTH (commonly 5, 15, 30, or 60 minutes). The 60-minute opening range is the Initial Balance. Breakouts of the opening range are classic intraday setups.

A trade setup where you enter on the first sustained breakout above the opening range high or below the opening range low. Commonly used with the 15-minute or 30-minute opening range. Confirmation comes from aggressive footprint in the breakout direction.

A larger price move made up of multiple ticks. On most equity-index contracts, 1 point = 4 ticks. On MES, 1 point = $5 (4 ticks × $1.25). On NQ, 1 point = $20.

The price level with the highest total volume in a given period. Represents fair value — where the market attracted the most trading interest from both sides.

The ICT framework describing how every significant move is structured in three phases: Accumulation (range), Manipulation (fake breakout / stop hunt), and Distribution (real directional move).

The upper half of a swing range (above the 50% equilibrium level). Price is expensive relative to fair value. Look for short entries in premium, not longs.

A profile high that lacks a single-print tail — multiple TPO letters at the extreme instead of a clean rejection. The auction is incomplete and price tends to revisit the level.

A profile low that lacks a single-print tail — multiple TPO letters at the extreme instead of a clean rejection. The auction is incomplete and price tends to revisit the level.

The overall shape of a completed session profile. Common shapes include D-shape (balanced), P-shape (rally), b-shape (sell-off), double distribution (repricing), and elongated (trend day).

A profile shape that is fat at the top and thin at the bottom, indicating a rally or short-covering session. The POC sits in the upper portion. Check delta to confirm whether it was real buying or short covering.

A resting limit order on the DOM, waiting to be hit. Provides liquidity. The passive trader chooses their price and waits — they may not get filled, but they don't pay the spread.

When market participants rapidly cancel resting limit orders, often right before a directional move. If bids vanish before a drop, sellers know something. If offers vanish before a rip, buyers know something. The DOM thinning out is a leading indicator.

Specifically when bid-side resting orders cancel en masse. Usually means buyers are stepping aside or that informed flow expects a drop. Often precedes a fast move down through the now-empty levels.

How the developing Point of Control moves from bar to bar through a session. Rising POC = buyers winning. Falling POC = sellers winning. Stable POC = balance. One of the cleanest single tells for who is in control.

When the POC migrates consistently in one direction across consecutive bars — a wave of fair-value migration. Bullish POC wave = POC stair-stepping higher. Bearish POC wave = stair-stepping lower. Strong directional signal.

When the bar's POC (highest-volume price) is inside the wick rather than the body. Indicates rejection — heavy trading occurred at a level that price subsequently rejected. Often a reversal tell at the bar level.

Where your limit order sits in line at a given price level — first in, first out. Earlier orders fill first. On Level 2 you can only see total size; Level 3 shows individual queue order. Critical for HFT.

An index of 2,000 smaller U.S. companies (small-cap stocks). Often moves differently than the S&P 500 because it reflects the health of smaller domestic businesses rather than multinational giants. Traded as futures under the symbol RTY (or M2K for the micro).

Regular Trading Hours — 9:30 AM to 4:00 PM Eastern Time, matching the NYSE session. This is where 80–90% of daily futures volume happens and where most setups form.

Buying below value or selling above value — expected behavior that maintains the current range. Responsive activity tends to push price back toward the POC. Fade responsive moves.

Price movement beyond the Initial Balance High or Low. A range extension signals that one side is taking control of the session. The 1x IB rule projects the first target by adding the IB width to the breakout side.

A limit order sitting on the DOM, waiting for the market to come to it. Synonymous with passive order. The collection of resting orders is what makes up the order book.

Synonym for iceberg order. The 'reserve' is the hidden quantity behind the displayed tip — the part of the order held back from the public DOM display.

When the visible portion of an iceberg gets filled and the order automatically releases the next slice from its hidden reserve. To the DOM watcher it looks like the size 'refills' instantly. Repeated refills are how you spot an iceberg.

A session where price oscillates within a defined range without committing to a direction. Typically signaled by an average-width Initial Balance with rotation inside it. Fade extremes; take profit near the opposite end of the range.

Bars that close after price moves a fixed amount (typically 4, 8, or 16 ticks). Each bar represents the same price movement, producing uniform bar sizes and cleaner footprint signatures. Best for footprint execution, scalping, and reading order flow signals.

Brick-style chart with fixed up/down boxes that ignore wicks and only print when price moves a set amount. Distinct from range bars (which preserve highs and lows). Less commonly used for footprint trading because the wick information is lost.

An index of the 500 biggest publicly traded companies in the United States — Apple, Microsoft, Amazon, Walmart, Exxon, and more. When people say "the market was up today," they usually mean the S&P 500. Traded as futures under the symbol ES (or MES for the micro).

A position where you sell a contract expecting price to go down. In futures, going short is just as easy as going long — you're not borrowing shares like with stocks.

An automatic exit order that closes your trade if price moves against you by a preset amount. The most important tool in trading — it caps your maximum loss on any trade. Every trade needs one.

The gap between the bid and ask. On active contracts like ES and NQ during RTH, the spread is typically 1 tick. A wider spread means it costs more to enter and exit a trade.

Three or more consecutive price levels with imbalances in the same direction. Marks zones where institutional traders committed significant size, creating reliable support or resistance.

A local peak on a chart where price reversed lower. The highest point between two lower candles on either side. Marks a level where sellers previously overpowered buyers.

A local trough on a chart where price reversed higher. The lowest point between two higher candles on either side. Marks a level where buyers previously overpowered sellers.

A price area where selling pressure previously overwhelmed buying, causing price to drop. When price returns to this zone, expect sellers to defend it.

A period of low volatility compression, typically identified by contracting Bollinger Bands or Keltner Channels. When the squeeze releases, it often produces an explosive directional move.

A trend-following indicator that combines moving averages to create a colored cloud on the chart. Green indicates bullish trend; red indicates bearish trend.

Stop losses from long buyers and sell stop orders sitting below price action, typically below equal lows or swing lows. When price sweeps these levels, it triggers a burst of sell orders that institutions buy into.

Institutional traders — banks, hedge funds, and market makers — who have the capital and information to move markets. ICT methodology focuses on identifying and trading with Smart Money activity.

A single directional price movement from one swing point to the next. Can be an impulse leg (with trend, fast) or a correction leg (against trend, slow). Legs are measured in points to project future targets.

A price level on the Market Profile where only one TPO letter appears — the market visited that price during only one 30-minute period. Single prints represent initiative activity and act as support or resistance when revisited.

A dramatic price movement in the final 1-2 periods of a session, creating single prints at the extreme. The spike high and spike base become key reference levels for the next session based on where price opens relative to them.

Placing large orders with no intent to fill them, just to mislead other traders about supply and demand. The order is canceled before it can be hit. Illegal under Dodd-Frank — but it still happens. Defense: never trust DOM size that has not been tested.

Multiple consecutive price levels below the market with unusually large bid sizes. Indicates a buyer (often institutional) defending an area as support. Also called a bid wall. Only meaningful if it stays when price approaches.

Multiple consecutive price levels above the market with unusually large ask sizes. Indicates a seller defending an area as resistance. Also called an offer wall. Only meaningful if it stays when price approaches.

A single aggressive order that takes out multiple price levels at once — eats through the entire visible book at one or more levels. Often institutional or HFT activity. Visible as a sudden drop in DOM size and a wide footprint print.

On the DOM specifically, the spread is the visible gap between the best bid and best ask. A 1-tick spread means the inside market is tightly contested; wider spreads (2+ ticks) signal thin or stressed conditions.

Exhaustion at a low — bar makes a new low but the bottom few prices have minimal bid-side volume. Means sellers ran out before buyers showed up. Often precedes a sharp reversal higher.

The peak emotional event of a sell-off — a single bar with massive volume (2-5x average) at the bottom of an extended move, signaling panic capitulation. Often coincides with bad news or stop cascades. Reversal up usually follows.

Wyckoff concept — high volume that halts a trend without reversing it immediately. Bar volume is 1.5-3x average, delta is balanced (not one-sided), and subsequent bars print narrow-range consolidation. The break out of that consolidation marks the reversal entry.

The smallest price move a futures contract can make. Each contract has its own tick size and tick value. On MES, 1 tick = $1.25. On NQ, 1 tick = $5. Ticks are how you measure small moves and calculate stop-loss risk.

Time Price Opportunity — a single letter on a Market Profile chart representing one 30-minute period at a specific price level. Letters stack horizontally to show how much time the market spent at each price.

Same as the inside market — the best bid and best ask. The 'top' of the order book is where the most aggressive resting orders sit, closest to current market.

The visible portion of an iceberg order — the small amount that displays on the DOM while the rest stays hidden. Typically 50–100 contracts on a futures iceberg whose true size could be thousands.

A market state where DOM size at and around the inside is small — often during overnight hours, around news events, or in less-liquid contracts. Thin markets see wider spreads, higher slippage, and bigger price jumps per market order.

A real-time scrolling list of every executed trade — timestamp, price, size, and which side (bid or ask) it hit. Also called the tape. Where the DOM shows intent, the tape shows action.

Trader slang for time and sales — the running stream of executed trades. 'Reading the tape' is the practice of inferring buyer/seller aggression from the speed, size, and side of incoming prints.

The skill of inferring market direction from time and sales — speed of trades, size of prints, which side they hit. The original day-trading skill from the ticker-tape era. Combined with the DOM today for real-time order flow analysis.

A participant who consumes liquidity by sending market orders that cross the spread. Takers pay fees on some venues since they take the market. Synonymous with aggressive participant.

Time Weighted Average Price — like VWAP but unweighted by volume. Less common than VWAP but sometimes used as a benchmark for execution algorithms designed to spread orders evenly through time.

A session where price moves persistently in one direction with little retracement. Typically signaled by a narrow Initial Balance followed by a strong IB extension. Trade with the trend; do not fade.

Retail traders who chase a breakout (or breakdown) just before it fails. When price reverses back through the broken level, their stops trigger and the forced unwind fuels the reversal. The most reliable intraday reversal pattern in futures.

Bars that close after a fixed time interval (1m, 5m, 15m, 1h, etc.). The default for most charting. Bar size and volume vary widely throughout the session — a 5m bar at the open has 10x the activity of a 5m bar at lunch. Best for context, not order-flow execution.

Bars that close after a fixed number of trades execute (e.g., 1000 ticks per bar). Adapts to market activity rather than time or price movement. Useful during news events and for specialized scalping strategies.

The process of working from higher timeframes down to lower ones — bias first, setup second, trigger third. Each timeframe answers a specific question. The discipline of confirming alignment across timeframes is one of the highest-ROI habits in discretionary trading.

An incomplete auction where the high or low of a footprint bar shows zero volume on one side. Price tends to revisit these levels to complete the two-sided trading process.

A POC from a prior period that price has not returned to since the period ended. Daily, weekly, monthly, and composite untested POCs all act as magnets — the longer the timeframe and the longer untested, the stronger the pull.

The range of prices where approximately 70% of total volume traded during a session. Defined by the Value Area High (VAH) and Value Area Low (VAL) around the POC.

The top of the Value Area — the highest price within the zone where 70% of volume traded. Acts as resistance. When price breaks above the VAH, the market is repricing higher.

The bottom of the Value Area — the lowest price within the zone where 70% of volume traded. Acts as support. When price breaks below the VAL, the market is repricing lower.

A histogram showing the total volume traded at each price level over a defined period. Reveals where the heaviest trading occurred and where price is likely to find support or resistance.

Volume Weighted Average Price — the session's average price weighted by volume. The institutional benchmark for fair value. Price above VWAP = buyers in control. Price below = sellers in control.

The signature of exhaustion on a footprint — the highest (or lowest) prices in a bar show abnormally low volume on the aggressive side. Price reached the level by drifting through air, not by being driven there.

Synonym for naked POC — a prior-session POC that price has not retested since the session ended.

Volume Weighted Average Price — the average price of every transaction in the session, weighted by volume traded at each price. The most-watched intraday reference for institutional traders, who are measured against it. Acts as both a trend filter and a mean-reversion magnet.

When price tests VWAP and immediately reverses with aggressive footprint signature on the rejecting side. Means VWAP is being defended as a level. High-edge fade setup in trending sessions.

When price loses VWAP intraday but quickly trades back through and holds above (or below) it. Confirms the prior trend is intact and traders who entered on the break are trapped. Common continuation entry.

Bars that close after a fixed quantity of contracts traded (e.g., 5000 contracts per bar). The fairest measure of activity but rarely used by discretionary traders due to complexity.

Synonym for Low-Volume Node — a section of the volume profile with little resting size. Price moves fast through volume gaps because there's nothing to slow it down.

Richard Wyckoff's analytical framework from the early 1900s — accumulation, markup, distribution, markdown phases driven by smart money. Many modern order-flow concepts (stopping volume, absorption, effort vs result) trace directly to Wyckoff's work.

The E-mini Dow Jones futures contract. Tracks the Dow Jones Industrial Average. 1 tick = $5, 1 point = $5. Less volatile than ES or NQ; fewer setups but smoother moves.