Glossary

Trading glossary

The terms you meet on a price chart, each explained in two sentences – with a real screenshot from TradingView.

Break of structure
BOS A break of structure (BOS) is a candle close beyond the last swing high in an uptrend or beyond the last swing low in a downtrend. It confirms that the trend continues.
Change of character
CHoCH A change of character (CHoCH) is the first break of structure against the current trend, for example the first close above a lower high in a downtrend. It is an early sign that the trend may turn.
Fair value gap
FVG A fair value gap is a three-candle pattern in which the wicks of the first and the third candle do not overlap. The gap between them marks an imbalance that price may come back to.
Liquidity
In trading, liquidity often means the orders resting above highs and below lows: stop losses and pending entries. Obvious highs and lows are often run because that is where these orders sit.
Liquidity sweep
A liquidity sweep is when price trades through a high or low, triggers the orders resting there and then closes back on the other side of the level.
Market structure
Market structure is the sequence of swing highs and swing lows that shows whether price is trending up, trending down or moving sideways.
Order block
OB An order block is the last opposite candle before a strong move that breaks structure. Traders watch it as a zone where price may react when it returns.
Premium and discount
Premium and discount split a price range at its 50% level, the equilibrium. The upper half is premium (relatively expensive), the lower half discount (relatively cheap).
Previous day high and low
PDH · PDL The previous day high (PDH) and low (PDL) are the highest and lowest prices of the last completed trading day. They are among the most watched levels in intraday trading.
Repainting
An indicator repaints when what it showed on past candles changes later. On the chart history it then looks better than it would have looked in real time.
Support and resistance
S/R Support is a price area where falling prices have stopped before, resistance one where rising prices have stopped before. Traders expect a reaction when price returns to it.
Swing high and swing low
HH · HL · LH · LL A swing high is a peak with lower highs on both sides, a swing low a trough with higher lows on both sides. Together they are the building blocks of market structure.
Trading session
A trading session is the time when a major financial centre is open. In forex, the trading day is split into the Sydney, Tokyo, London and New York sessions.