TAS Specific Terms
Balanced Area
Within the context of time frames a balanced area is a horizontal consolidation. This is the fair value area, where we have relatively equal highs and lows. Because this is fair value area to trade, we can buy all we want at the lows and sell all we want at the highs. Relatively is the key word.
Balance always leads to imbalance
b Formation
A balanced/price consolidation area after a step one vertical move to the downside.
Dynamic Profile Indicator—the Boxes
Boxes are formed when new valuations are detected from market data. They show the area of balance that the market is deeming it to be fair value. Boxes form at the close of the particular time frame. They continue until price action changes from fair value balanced to an imbalance state. The boxes represent the fair value area on any given time frame.
The top/bottom of the boxes are the unfair high and unfair low, areas. The middle line represents the high volume node or the area where the most volume occur in that balanced area.
When price is trading within the boxes, on any given time frame this is called "balanced". Price will rotate between the unfair high and the unfair low, around the point of control. When price moves out of those areas it will be imbalanced either to the up side or the down side. When price goes to imbalance, either a new set of boxes will be formed or, the price will be pulled back into the old set of boxes.
Floaters
Floaters are price comparison levels that adjust on a time level
The yellow floater is the control level or mid line to determine the area in which to trade from.
High Volume Area
The area depicted on the market map where the most volume occurs at a certain range of price and time.
Imbalanced
Within the context of a time frame an imbalanced market is a vertical or trending market—expressed in price. Imbalance always follows a balanced area time context sensitive
Legging into a position
Often you will hear us say we are "legging into a position".
While we can see areas such as unfair high and low timing the exact top or bottom of a market is not possible. When we see and area of unfair high or low and wish to position ourselves in a position we start opening a position with an area that we want to go long or short. We have a stop and target and will add to the position up to a certain point or area. To leg in you would just take your normal number of shares and enter the position in smaller portions so if you leg in thru and area your total position size and stop loss would be the same as if you entered with a whole position at once.
Last Chance line (LCL)
The LCL is the line on the static indicators that is, above or below the daily support or resistance lines. When price trades outside of these lines, it is usually an area that has had little previous price development.
Market map
The TAS proprietary indicator showing real time volume development at a certain price and time frame.
Market Profile
Market Profile is the graphical organization of price and time information. Is a registered name of CBOT.
Nibble
Taking a small lot size with the anticipation of legging into a position or testing the area of a possible turning point. The size is usually a quarter of the normal lot size you would consider.
P Formation
A balanced/price consolidation area that forms after a step one vertical move to the upside.
Point of control (POC)
POC is the area where the most volume had gone off in a particular time period for a profile. The yellow line on the market map is the POC.
Rotational day
A day that is balanced or trading in a range. Will trade within the first one hour highs and lows.
Steps of Market Activity
This is a simply way to remember the sequence of events that lead to any market movement:
Step one (always the first step): A vertical move either up or down is initiated by a market imbalance.
Step two: Stopping price to end the vertical move. Indicating that the last of the supply imbalance or demand is in place
Step three: Development around the stopping price that formed in step 2.
Step four: The market rebalances the inefficiency of the prior vertical move.
Trend day
A day that is imbalanced on the daily time frame.
Unfair High
The unfair high is the area where price rallies to the up side to shut off buying. It is an area where buyers feel the price is to expensive.
Unfair Low
The unfair low is the areas where price rallies to the down side to shut off selling. It is an area where buyers perceive the price is inexpensive.
The Wall
Static indicators that are represented by a very tight contraction of the yellow and 3 cyan static levels for the day. The area represent a very defined area of support or resistance and getting through this area is usually not accomplished.