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Frequently used Terms Support and Resistance A broad term for price levels in the past which the contract "remembers" and which might lead to rallies and declines. This usually involves clusters of previous ranges or prior highs and lows. Go short To sell a contract you don't own with the intention of buying it at a lower price to close out the contract. Go long To buy or own a contract. Open Interest An open interest of one represents both agreement to deliver and an agreement to receive a contract, every time a contract moves there is a winner and a loser. Stop An order in the futures market written at a specific level through which a contract is bought or sold "at the market" automatically. "A desk stop quote" - is a price which should trigger a mental alarm for you to enter an order "at the market" to enter or exit a position. Cycles A perceived rhythm in the market where bottoms and lows are made with regularity. There are many cycles that can be perceived. The cycle range is 14 days in currencies, up to 28 days for other commodities, and the average cycle is 20 day. Seasonal A perceivable rhythm with a trading period (therefore not calendar days.) The daily seasonal for instance is for contra-trend moves to take place in mid-morning and moves with the trend to take place in the last 15-30 minutes of trading. An example of a longer seasonal is for corn to bottom at the end of the harvest in autumn and to top in early July when it begins to appear the crop is "going to be made." Long-term A chart of monthly bars showing open, high, low and close for individual months and extending 5 to 10 years. Medium-term A chart of weekly bars showing open, high, low and close for individual weeks and extending 6 to 12 months. Short-term A chart of daily bars showing open, high, low and close for individual days and extending 30 to 90 days. Trend lines A line connecting a series of significant highs or lows and then this line forms support or resistance. Trend channel Parallel trend lines.
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