Trader Terminology

At Hawkeye Traders, we teach traders how to use Volume Price Analysis and how to select timeframes to smooth out volume and price. The shorter the timeframe, the less smooth volume and price will be. When you watch our videos, notice how market momentum and market trends make price action smoother and easier to follow on the weekly chart than on the daily or intraday charts.  Knowing which timeframes to use is crucial to achieving success in the markets.

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But first you need to know the terminology of stock trading.  Without knowing the meaning of the following terms, you well be lost in the jargon:

Position Trader

Position Traders rely on trend trading. They enter and hold positions for longer timeframes. In Exchange-Traded Funds (ETFs), this might mean holding the position indefinitely.

Swing Trader

When swing traders enters a position, they expect to exit in a few days or maybe in a few weeks.  Swing trading relies on a longer timeframe than day trading, but a shorter timeframe than trend trading.

Day Trader

A Day Trader does not hold positions even overnight. Day Trading attempts to profit from quick price changes.

Exchange-Traded Funds

(ETF) Exchange-traded funds (ETFs) are index-based derivatives, usually composed of stocks, and sometimes including commodities and bonds. An ETF is valued like a mutual fund.  But, unlike a mutual fund, an ETF can be traded throughout the day as the net asset value or current trading price is continually recalculated based on trading activity.

Derivative

A derivative is an investment product that derives its value from another security. For example an ETF’s value is based on the value of the securities it includes.

Bearish

The market is bearish when price action is biased to the downside.

Bullish

The market is bullish when price action is biased to the upside.

Demand

Demand refers to the number of buyers in a specific market.

Intraday

Intraday trading is a type of trading in which a position is entered and exited within the same day.  A trader who relies exclusively on this type of trading is day trading.

Interday

Interday trading is a type of trading in which a position is entered one day and held until the next day or longer.

Range

Range is the difference between the high and the low of a market in one day.

Resistance

Resistance means that some conditions are preventing stocks in an area of the market from moving higher, sometimes despite significant recent market momentum. When such conditions prevail, a large supply of stocks is being sold in that area, and a large number of sellers are usually selling abruptly. The trading price may go to and through the area of resistance. If the trading price closes above the resistance area, the current bias should be bullish.

Supply

Supply is the number of shares or contracts in a specific market.

Support

Support means that an overwhelmingly high number of buyers have entered an area of the market. When such conditions prevail, many buyers are usually purchasing abruptly because the supply of stocks in this area is low.  The trading price can go to and through the area of support. However, if the trading price closes below the support area, the current bias should be bearish.

Volatility

Volatility is used to describe the variation of the trading price in a specific market. When the trading price varies widely, the market is described as more volatile.  When the variation in the trading price is narrow, the market is described as less volatile .Volatility can be measured for the whole of the market or for a specific area of the market, plotted by a specific volume bar. The measurement of volatility can also be for a specific timeframe, such as an intraday timeframe or an interday timeframe (used in day trading).

Scalping

Scalping is short-term trading to take advantage of small price moves.  Usually scalping is conducted on a fast chart. In Forex trading (Foreign Exchange currency trading), Forex Scalping is a common term.

Pivot High

Pivot High is a Hawkeye Indicator based on price action and illustrating resistance.

Pivot Low

Pivot Low is a Hawkeye Indicator based on price action and illustrating support.

Roadkill Volume

In Volume Price Analysis, RoadKill Volume is volume from a slower chart, plotted on a faster chart.  You read Roadkill Volume in the same manner as Hawkeye Volume.

Hawkeye Volume

Hawkeye Volume is a Volume Indicator within Hawkeye ChartTools, a suite of trading tools available as one of our trading software products.  The Hawkeye Volume Indicator shows volume plotted in color. Green Volume Bars indicate that buyers currently control the market, and red Volume Bars indicate that sellers are in control. White Volume Bars demonstrate areas of no demand.