Forex Trading Glossary – U/V/W

Forex Trading Glossary – U

Unrealized Profit or Loss
The profit or loss status of open trades.

Uptrend
Characterized by a series of higher price highs and higher price lows.

Uptrend Line
A line drawn through least two ascending price lows, with a third needed for confirmation of the trendline.

Forex Trading Glossary – V

Value Date
The maturity date of a foreign exchange contract, at which time two currencies are exchange. A spot deal is usually done for value two business days from the trading date.

Variation Margin
The minimum funds required by an FX brokerage firm to support an open position.

Violation of a Trendline
When a currency trades below an uptrend line or above a downtrend line.

Volatility
A measure the tendency of price to move up and down, based on its daily price history over the some time period ranging from 30 days to 12 months.

Forex Trading Glossary – W

Wave
In Elliott wave theory, a sustained move (such as an impulse wave or corrective wave) by the market’s price in one direction.

Wave 1
(Elliott Wave)

elliott waves

The first impulse-wave, comprised of five internal waves – three impulsive (1, 3 & 5) and two corrective (2 & 4).

Wave 2
(Elliott Wave)
A correction to wave 1. It will normally be comprised of three waves, A-B-C but can become more complex.

Wave 3
(Elliott Wave)

The second impulse-wave, comprised of five internal waves – three impulsive (1, 3 & 5) and two corrective (2 & 4). Commonly (but not always) wave 3 is the longest of the impulse waves.

Wave 4
(Elliott Wave)

The second corrective wave. It is a correction to wave 3. It will normally be comprised of three waves, A-B-C but can become more complex.

Wave 5
(Elliott Wave)

The third and final impulse-wave, comprised of five internal waves – three impulsive (1, 3 & 5) and two corrective (2 & 4). It is also possible for wave-5 to develop as an extension (see extended waves).

The example shown displays the entire wave structure leading to the final wave 5 rally.

Forex Trading Glossary – U/V/W

Wave A
(Elliott Wave)

The first wave in a corrective pattern. In simple corrections (A-B-C) or linked combinations of A-B-C corrections, wave A will be constructed of five waves. However, in more complex corrections wave A is constructed of three waves.
In the diagram shown, notice the wave A in waves (2), (4), the wave [2] of one higher degree and the wave a in wave (B).

Wave B
(Elliott Wave)

The second wave in a corrective pattern. Wave B is always constructed of three waves or a combination of three-wave patterns. It can be the most complex of all waves with a wide variety of three-wave combination patterns that can develop.

The diagrams show a simple three-wave wave (B) on the left and a complex Wave (B) constructed of a five-wave (each of three-waves) triangle on the right.

Wave C
(Elliott Wave)

The third wave in a corrective pattern. In a simple corrective pattern (A-B-C) or a linked combinations of A-B-C corrections wave C is always constructed of five waves. However, in more complex corrections wave C is constructed of three waves.

The diagrams show a simple (A)-(B)-(C) on the left where the wave (C) is constructed of five waves. On the right we see a complex correction in which there are many examples of wave c (in blue) that are part of the triangular wave (B).

All the c waves (in blue) will be constructed of five waves as part of a series of a-b-c patterns. The third wave of this is a wave C (in green) which is constructed of three waves (ie a-b-c) and the final wave (C) (in red) is also constructed of five waves.

Wave D
(Elliott Wave)

The fourth wave in a correction, being of a triangle. Wave D will always be constructed of three waves and will only appear in a triangle.
The diagram displays a wave (B) triangle in which wave D is constructed of three waves.

Wave E
(Elliott Wave)

The fifth wave in a correction, being of a triangle. Wave E will almost always be constructed of three waves and will only appear in a triangle. In very rare occasions this wave E can be constructed of a triangle itself and thus will be constructed of five waves of three.

The diagram displays a wave (B) triangle in which wave E is constructed of three waves to complete the triangle.

Forex Trading Glossary – U/V/W

Wave (I)

The first wave of a complex impulsive wave, these commonly being a diagonal triangle or an expanding triangle. While it is normal for an impulsive wave to be constructed of five waves, on occasions these five waves develop in three-wave patterns (and not five-wave) and appear in the patterns mentioned. These complex impulsive waves normally appear in wave 5 of an impulsive move although there have been rare instances of being associated to a wave 1 position.

The diagram displays a wave (i) in a diagonal triangle wave 5 (in green) that has developed in five waves of three, each being labeled in red.

Wave (II)
(Elliott Wave)

The second wave of a complex impulsive wave, these commonly being a diagonal triangle or an expanding triangle. While it is normal for an impulsive wave to be constructed of five waves, on occasions these five waves develop in three-wave patterns (and not five-wave) and appear in the patterns mentioned. These complex impulsive waves normally appear in wave 5 of an impulsive move although there have been rare instances of being associated to a wave 1 position.

The diagram displays a wave (ii) in a diagonal triangle wave 5 (in green) that has developed in five waves of three, each being labeled in red.

Wave (III)
(Elliott Wave)

The third wave of a complex impulsive wave, these commonly being a diagonal triangle or an expanding triangle. While it is normal for an impulsive wave to be constructed of five waves, on occasions these five waves develop in three-wave patterns (and not five-wave) and appear in the patterns mentioned. These complex impulsive waves normally appear in wave 5 of an impulsive move although there have been rare instances of being associated to a wave 1 position.

The diagram displays a wave (iii) in an expanding triangle wave 5 (in green) that has developed in five waves of three, each being labeled in red.

Wave (IV)
(Elliott Wave)

The fourth wave of a complex impulsive wave, these commonly being a diagonal triangle or an expanding triangle. While it is normal for an impulsive wave to be constructed of five waves, on occasions these five waves develop in three-wave patterns (and not five-wave) and appear in the patterns mentioned. These complex impulsive waves normally appear in wave 5 of an impulsive move although there have been rare instances of being associated to a wave 1 position.

The diagram displays a wave (iv) in an expanding triangle wave 5 (in green) that has developed in five waves of three, each being labeled in red.

Wave (V)
(Elliott Wave)

The fifth wave of a complex impulsive wave, these commonly being a diagonal triangle or an expanding triangle. While it is normal for an impulsive wave to be constructed of five waves, on occasions these five waves develop in three-wave patterns (and not five-wave) and appear in the patterns mentioned. These complex impulsive waves normally appear in wave 5 of an impulsive move although there have been rare instances of being associated to a wave 1 position.

The diagram displays a wave (v) in a diagonal triangle wave 5 (in green) that has developed in five waves of three, each being labeled in red.

Wave X
(Elliott Wave)

A three wave pattern that divides extended corrections in a series of A-B-C waves. Within a Double Zig-zag there will be one wave X between the two ABC patterns. In a Triple Three there will be two instances of a wave X, each being between the three ABC patterns.

Forex Trading Glossary – U/V/W

Wedge
(Standard)

A period of trading within which the price action is either rising or falling within two converging trend lines.

(Elliott Wave)
This is a five-wave pattern in which the waves are constructed of three waves. The pattern emerges normally between two rising (or falling) converging lines, though they can be parallel. It is most commonly found in wave 5 positions, but can also occur in wave A or wave C. In classic technical analysis it is called a wedge.

Whipsaw
To buy and have the price collapse, and then sell short and watch the market rally.

Forex Trading Glossary – U/V/W

Forex Trading Glossary – U/V/W