Trading Glossary
Essential trading terms and concepts used throughout Pro Signals V5 documentation and the indicator itself.
Higher High (HH)
A swing high that is higher than the previous swing high, indicating bullish momentum and uptrend continuation.
Higher Low (HL)
A swing low that is higher than the previous swing low, confirming bullish market structure and uptrend strength.
Lower High (LH)
A swing high that is lower than the previous swing high, indicating bearish pressure and potential downtrend.
Lower Low (LL)
A swing low that is lower than the previous swing low, confirming bearish market structure and downtrend continuation.
Break of Structure (BOS)
Occurs when price breaks through a significant swing point (previous high or low), signaling a potential trend change or continuation.
Stars (signal rating)
Every Pro Signals V5 signal is rated 0 to 5 stars, one for each check it passes: next timeframe up agrees, the timeframe above that agrees, volume above average, room to run, and a clean market.
Momentum
The rate of change in price movement. Strong momentum indicates trending conditions, while weak momentum suggests consolidation or reversal.
Volatility
The degree of price fluctuation in the market. High volatility means larger price swings; low volatility indicates calmer, range-bound conditions.
Market Structure
The pattern of swing highs and lows that define trend direction. Bullish structure = HH + HL, Bearish structure = LH + LL.
Confluence
When multiple technical factors align at the same price level or time, increasing the probability of a successful trade setup.
Swing Point
A local peak (swing high) or trough (swing low) in price action that helps define market structure and trend direction.
Reversal Zone
An area where price shows potential to change direction, identified by extreme momentum/volatility conditions and structural shifts.
Targets (TP1, TP2, TP3)
Profit targets at 1x, 2x and 3x the risk (the distance from entry to stop). After TP1 the stop moves to the entry.
Trailing Stop Loss
A stop loss that automatically adjusts higher (long) or lower (short) as price moves favorably, protecting profits while allowing trend continuation.
Signal Mode
Conservative (fewest signals, widest stop), Balanced, or Aggressive (most signals, tightest stop). Conservative is the default.
Trend Cloud
A smoothed volatility-momentum cloud that visually represents trend direction and strength through color and thickness.
Active Trend
Visual overlay showing real-time trend direction and strength through color intensity and directional indicators.
Reversal Bands
Dynamic bands calculated from volatility that expand/contract with market conditions, highlighting overbought/oversold zones.
Momentum Line
The 13-candle average a signal candle has to close beyond. Green while price is above it, red while below.
Momentum Candles
Candles colored green in an uptrend and red in a downtrend, brighter with stronger momentum.
Support
A price level where buying pressure is strong enough to prevent price from declining further, creating a floor.
Resistance
A price level where selling pressure is strong enough to prevent price from rising further, creating a ceiling.
Overbought
A market condition where price has risen too quickly and may be due for a pullback or reversal, often indicated by reversal bands.
Oversold
A market condition where price has fallen too quickly and may be due for a bounce or reversal, often indicated by reversal bands.
Risk-Reward Ratio
The relationship between potential profit and potential loss on a trade. A 1:3 ratio means risking $1 to potentially gain $3.
Understanding the Terms
These terms are fundamental to understanding how SimpleAlgo analyzes markets and generates signals. Familiarizing yourself with these concepts will help you make better trading decisions and use the indicator more effectively.