Definition: A dynamic stop-loss that moves with price to lock in profit as the trade moves in your favor. Example: You set a trailing stop 5% below the highest price BTC reaches after your entry.

Definition: The worst unrealized loss a trade experienced before it closed, used to evaluate stop-loss placement. Example: Your trade hit -8% before recovering to +15%; MAE analysis shows whether your stop was too tight.

Definition: A mathematical formula that calculates optimal position size based on win rate and average win/loss ratio. Example: With 60% win rate and 1:2 risk/reward, Kelly suggests risking 20% per trade—but traders use a fraction of that for safety.

Definition: The alignment of multiple independent signals — pattern, volume, indicator, key level — that together strengthen a trade setup. Example: A double bottom at major support, confirmed by RSI divergence and rising volume, is a high-confluence setup.

Definition: A recognizable formation on a price chart that suggests a probable future price movement based on historical behavior. Example: A head-and-shoulders pattern on BTC’s daily chart suggested a reversal before a 30% decline.

Definition: A three-peak reversal pattern where the middle peak is the highest, signaling a shift from bullish to bearish momentum. Example: ETH formed a head-and-shoulders in 2021 before a major correction.

Definition: The support or resistance line connecting the lows (or highs) in a head-and-shoulders pattern; a break confirms the pattern. Example: BTC’s neckline at $28,000 broke with high volume, confirming the reversal.

Definition: A bullish reversal pattern — the mirror image of head and shoulders — signaling a shift from bearish to bullish momentum. Example: SOL formed an inverse head and shoulders before a 60% rally.

Definition: A bullish continuation pattern with a flat resistance line and rising support, indicating accumulating buying pressure. Example: ADA consolidated in an ascending triangle for six weeks before breaking out.

Definition: A bearish continuation pattern with flat support and declining resistance, indicating increasing selling pressure. Example: A descending triangle on BTC’s 4H chart preceded a breakdown below key support.

Definition: A neutral consolidation pattern with converging trendlines, indicating a breakout is imminent but direction is unconfirmed. Example: LTC formed a symmetrical triangle for three weeks before a sharp upside breakout.

Definition: A short rectangular consolidation pattern following a strong price move, indicating the trend is likely to continue. Example: After a 20% rally, BTC consolidated in a tight flag before continuing higher.