Some more jargon

Trade like a pro with this authentic Old Salt trader's jargon, guaranteed 100% acceptable in any pit!

Seriously, anyone using this stuff is, in my opinion, so laid back about their trading that they're probably going to lose their shirts, but I provide it just for the record and to show what a colourful, wicked industry it is.

All dressed up with nowhere to go  The market is over-extended. For example, half an hour after the market has opened, it's already up 3% for no very cogent reason - what's it going to do for the remaining 7 hours of trading? Has to be down, unless the whole economy is going gang-busters...

Dead cat bounce  Much beloved of pundits, this turn of phrase showcases traders' robust character by demonstrating their cold-heartedness at the spectacle of a dead cat being dropped so far and so hard that it bounces. Such callousness, it is believed by some, is rewarded in the markets, but there are those who say that it will later be punished in hell.  It means simply that a rise in the market is temporary, and will soon be followed by further falls. "Fool's rally" is a synonym.

Enveloping  This is when, on a bar chart, the current session makes a higher high and a lower low than the previous session - it is said to be enveloping the previous session. This, like its converse Enveloped, is said to denote a possible sea change in the market, especially when accompanied by the freezing of witches' gizzards on midsummer night.

Head and shoulders  A shape on a graph marking a peak or trough in the market. It's actually usually more like the shape of Batman's cape...

I'm flat  means I have no position - I'm taking a breather.

Island reversal  This is when the market gaps up and then gaps down (or the reverse), leaving an 'island' of trades. Legend has it that this marks a significant long-term change in the market's direction.  Bat's bile curdling is also a dead cert sign of change...

Looking toppy  The market is looking over-bought, usually after a big run-up and all of a sudden nobody's trading any more and those who've just bought suddenly look dangerously exposed...

Mums 'n' dads A contempuous term for middle-class punters, who can always be relied upon to get it wrong, while seasoned professionals can get rich simply by trading against them. When you hear someone say "the mums and dads are out in force today", implying that you should bet against the market because mums and dads are suckers, don't be fooled : in any case, how exactly would the speaker know that the market was being moved by individuals rather than by institutions?

My friend A form of address used by professionals when speaking to somebody for whom they have absolutely no concern other than to relieve them of any spare cash that they may have. Thus "if the market hits your stop, my friend, I shall have to close your position". It's shorthand for "sorry, but it's everybody for himself".

Rate tarts Investors who promiscuously flit from one borrower to another in pursuit of the highest rate of interest.

Work it  This is a vague and unprofessional instruction often given to brokers, meaning "don't execute this order in your standard time and manner, but rather I authorise you to use your discretion to choose your time and method in order to get the best result". Typically it will refer to a large order that will best be handled by splitting it up over a number of trades and over several minutes, hours or even days.

Please email me with more of this stuff - all contributions will be gratefully acknowledged!

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