Arbitrage Glossary

Use this glossary of common Arbitrage terms to get a better understanding. If you notice something missing, please let us know! We will be happy to add it!

Term Definition Related Terms
3rd Deviation As candles get to the edge of 3rd deviation of the band, it acts as a point of resistance and should slowly drift in the opposite direction. Arbitrage Band System
Arbitrage Buy/ Sell Entry

The Compass Line has crossed the RSI Line (either over or under) confirming direction of the trend within the band in use (Arbitrage, Novice, Intermediate, Advance, Apocalypse). As you can see in the picture below: the Green Triangle indicates the beginning of a new buy-trend, and the Red Triangle indicates the beginning of a new sell-trend. This feature is enabled by choosing 'Show Band exits/ Show exits'. 


Arbitrage, Novice, Intermediate, Advance, Apocalypse, and Atlas
Arbitrage Candle Colors

Candle colors are based on the  navy blue compass line within the arbitrage band indicator.  This function is enabled by 'Show Candle Colors'. 

Blue: The compass has a negative slope, indicating a sell trend is in progress.

Magenta: only appears when the RSI Line is sitting within the UDZ and the compass line has crossed under the RSI Line, this candle indicates a high probability of a sell trend. 

White: The slope of the compass has not changed. 

Yellow: The compass has a positive slope, indicating a buy trend is in progress.

Green: Only appears when the RSI Line is sitting within the LDZ and the compass line has crossed over the RSI Line, this candle indicates a high probability of a buy trend. 

Candles
Arbitrage Z

-Top green section means buys are trending within a sustainable uptrend means sells are trending within a sustainable downtrend. 

- When the trend line pokes out of the top green area (into white) it means the uptrend is over bought and must correct, creating a brief downtrend.

- Z Line is the average of all the bands' probability. It gives you an idea of the overall trend. 

RSI Line
Asking price - Offering Price The lowest price any potential seller is willing to accept for a particular security.
Atlas Component: Show MTF The 'Show MTF' component shows the highest and lowest values of the previous candle on a specified time frame. This helps to illustrate where strong support and resistance is on the current time frame.  Atlas
Atlas Component: Show Windows

Aqua '$' - A window of Profit is opening up

       - When the Atlas band is green, aqua $ means it could be the end of that buy trend

       - When the Atlas band is red, aqua $ means it could be the end of that sell trend

Red '$' - means it is the potential end of a downtrend 

        - Could be a potential bottom- extremely risky entrance for a BUY

Green '$'- means it is the potential end of an uptrend

        - Could be a potential top- extremely risky entrance for a SELL

Atlas
Atlas Indicator

Atlas is the primary indicator for alerts within the arbitrage bands trading system.

It is comprised of: 

- Multi Time Frame indicator

- Top Bots

- Band Exits

- Candle Colors 

- Windows of profit 

- Highs

- Lows

- High Lows

- Low Highs

Atlas Components
Band

The Arbitrage Band System is comprised of 9 distinct bands, each reflecting large time frames. In ordertheare the Money Band, Scalp Band, Compass Band, Arbitrage Band, Novice Band, Intermediate Band, Advance Band, and Apocalypse Band. Each band contains a Mean, six standard deviations(3 up, 3 down), Upper and Lower Danger Zones, RSI Line, Compass Line, and a Momentum Line.


Arbitrage Band System
Bear Doji

A red candle in which the daily movement is negative, and the daily movement has a range of 1-3 cents with a long tail both above and below.


Candles, Doji
Bear Engulf

A time in which the previous day consisted of a green candle that was engulfed the following day with a larger red candle. 


Candles
Bear Harami

A time in which the previous day consisted of a large green candle and the following day resulted in a small red candle that is contained within the range of the previous days movement. 


Candles
Bear Marubozu (High Tail)

A single day in which the low of the day is the closing price represented by a red candle and the body of the candle is larger than the tail.


Candles
Bear Marubozu (Low Tail)

A day in which the High of the day is the opening price and the closing price of the candle is near the low of the day. The body of this candle is larger than its lower tail.


Candles
Bear Spinning Top

A red candle consisting of a medium sized body with a long high and low tail. 


Candles
Bearish An outlook anticipating lower prices in the underlying security. Bullish
Bearish Continuation Strategy

Setup

Downtrend

Psychology

A downtrend shows further strength by gapping down on the open and driving the price lower to close as a red candle. This is followed by a pause as the bulls attempt to force the price up, but are unable to close the gap. Continued trading below the gap shows the strength with the bears. 

Confirmation

The price continues to trade below the gap, and preferably below the green candle's real body.


Candles, Downward Gap Tasuki
Bearish Continuation Strategy II

Setup

Downtrend

Psychology

The bears domination of the bulls is evident within the downtrend by the formation of the first long red candle. The price then pauses, forming 2 or more small candles within the range of the first candle. The bulls are not able to force the price above the high of the original candle, and are then overcome once again by the bears who push the price downwards with a second long red candle closing below the first candle. 

Confirmation

The price trades below the body of the second long red candle. 


Candles, Falling Three
Bearish Engulfing

- BEARISH two candle Reversal Pattern. 

- 1st candle has a smaller GREEN real body. 

- 2nd longer RED candle completely engulfs the 1st candle body. 


Candles, Bearish Reversal Strategy III
Bearish Reversal

Setup

Uptrend 

Psychology

The bulls continue the uptrend by gapping the price up at the open and driving it to new highs. The bears come back in force though and drive the price back down. A red Shooting Star is more bearish the a green Shooting Star, due to the bears ability to force the close of the candle below the opening price. 

Confirmation

The Price trades below the body of the Shooting Star candle. 



Candles, Shooting Star
Bearish Reversal Strategy II

Setup

Uptrend 


Psychology

The uptrend initially appeared that it would continue strongly as the price gapped up at the open, however the bears fought back strongly driving the price convincingly lower. Although the bulls were able to resist the downward pressure, this is only temporary. A red Hanging Man is more Bearing than a green Hanging Man, due to the bulls inability to force the close of the candle above the opening price. The Hanging Man is not considered as bearish as the Shooting Star due to the fact that the bulls were able to fight back to some degree. 


Confirmation

The price trades below the body of the Hanging Man candle. 



Candles, Hanging Man, Shooting Star
Bearish Reversal Strategy III

Setup

Uptrend 

Psychology

This is a very bearish reversal pattern in which the bears inflict a rapid and decisive victory over the bulls. The uptrend continues via a green bodied candle. The opening of the next candle ideally gaps upwards (continued sign of bullishness) however the bears then drive the price down to close the candle below the open of the green bodied candle. The name 'bearish engulfing' is due to the fact the the real body of the red candle completely engulfs the real body of the green candle. 

Confirmation

The price trades below the body of the red candle. 



Candles, Bearish Engulfing
Bearish Reversal Strategy IV

Setup

Uptrend

Psychology

The uptrend continues via a green bodied candle. The opening of the next candle ideally gaps up (continued sign of bullishness) however the bears then drive the price back down showing renewed strength and a potential change of trend. The bears win the battle closing the candle in the lower half of the green candle's body. Note that this is not as bearish as the bearish engulfing pattern, in which the bears were able to drive the price lower to close below the first candle's real body. 

Confirmation

The price trades below the real body of the red candle. 


Candles, Dark Cloud Cover
Bearish Reversal Strategy V

Setup

Uptrend

Psychology

The bulls continue the uptrend by forming a long green bodied candle. The gap opening up to the second candle initially appears bullish, but the small body of the star shows a possible loss of momentum. The bears the re-enter the market in force, ideally gaping down from the star, and driving price to close well within (or below) the first candle. The lower the close, the more decisive the victory of the bears over the bulls. 

Confirmation

The price trades below the body of the long red candle. 



Candles, Evening Star
Bearish Reversal Strategy VI

Setup

Uptrend 

Psychology

The upper extreme of the shadows represents area of resistance. Bulls were not willing to buy above this price, so the bears returned in force to drive the price back down. The Tweezer Top forms when two or more candle's upper shadows form at same level, confirming the strength of this resistance, and the likelihood that the uptrend will either pause or reverse to a downtrend. 

Confirmation

The price trades below the level of resistance. Price trading below the body of the Tweezer Top candles is more bearish, and likely to indicate a reversal of trend rather than a change to consolidation. 



Candles, Tweezer Top
Bid or Asked Spread The difference in price between the latest available bid and offering prices for a particular security. Bid Price, Asking or Offering price
Bid Price The highest price any potential buyer is willing to pay for a particular security.
Bitcoin (BTC) Founded by Satoshi Nakamoto, BTC is the first globally successful cryptocurrency. Released in 2009 in the wake of the Global Financial Crisis, Bitcoin introduces a digital currency with a decentralized medium known as Blockchain. Crypto Currency
Blockchain A decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, setting trades, voting and many other issues.  Crypto Currency
Bull Harami

A time in which the previous day consisted of a large red candle and the following day resulted in a small green candle that is contained within the range of the previous days movement.


Candles
Bull Marubozu (High Tail)

A single day in which the high of the day is near the closing price represented by a long green candle. The body of the candle is larger than its Upper tail.


Candles
Bull Spinning Top

A green candle consisting of a medium sized body with a long high tail and low tail. 


Candles
Bullish An outlook anticipating higher prices in the underlying security. Bearish
Bullish Continuation Strategy

Setup

Uptrend

Psychology

An uptrend shows further strength by gaping up on the open and driving price higher to close as a green candle. This is followed by a pause as the bears attempt to force the price down, but are unable to close the gap. Continued trading above the gap shows strength with the bulls. 

Confirmation

The price continues to trade above the gap, and preferably above the red candle's real body. 


Candles, Upward Gap Tasuki
Bullish Continuation Strategy II

Setup

Uptrend

Psychology

The bulls domination of the bears is evident within the uptrend by the formation of the first long green candle. Price then pauses, forming 2 or more small candles within the range of the first candle. The bears are not able to force price below the low of the original candle and are then overcome once again by the bulls who push price upwards with a second long green candle closing above the first candle. 

Confirmation

The price trades above the body of the second long green candle. 




Candles, Rising Three
Bullish Engulfing

- BULLISH two candle Reversal Pattern. 

- 1st candle has a smaller RED real body.

- 2nd longer GREEN candle completely engulfs the first candle body. 


Candles, Bullish Reversal Strategy III
Bullish Reversal Strategy

Setup

Downtrend 

Psychology

The bears continue to downtrend by gapping the price down at the open and driving it to new lows. The bulls come back in force though and drive the price back up. A green Hammer is more bullish then a red Hammer, due to the bulls ability to force the close of the candle above the opening price. 

Confirmation

The price trades above the Hammer candle's real body. 



Candles, Hammer
Bullish Reversal Strategy II

Setup

Downtrend 

Psychology

The downtrend initially appeared that it would continue strongly as the price gapped down at th open, however the bulls fought back strongly driving the price convincingly higher. Although the bears were able to resist the upward pressure, this is only temporary. A green Inverted Hammer is more bullish than a red Inverted Hammer, due to the bear's inability to force the close of the candle below the opening price. The Inverted Hammer is not considered as bullish as the Hammer, due to the fact that the bears were able to fight back to some degree. 

Confirmation

The price trades above the body of the Inverted Hammer candle. 



Candles, Inverted Hammer
Bullish Reversal Strategy III

Setup

Downtrend 

Psychology

This is a very bullish reversal pattern in which the bulls inflict a rapid and decisive victory over the bears. The downtrend continues via a red bodied candle. The opening of the next candle ideally gaps down (continued sign of bearishness) however the bulls then drive the price upwards to close the candle above the open of the red bodied candle. The name 'bullish engulfing' is due to the fact that the real body of the green candle completely engulfs the real body of the red candle. 

Confirmation

The price trades above the body of the green candle. 


Candles, Bullish Engulfing
Bullish Reversal Strategy IV

Setup

Downtrend

Psychology

The downtrend continues via a red bodied candle. The opening of the next candle ideally gaps down (continued sign of bearishness) however the bulls then drive the price back up showing renewed strength and a potential change of trend. The bulls win the battle closing the candle in the upper half of the red candle's body. Note that this is not as bullish as the bullish engulfing pattern, in which the bulls were able to drive the price higher to close above the first candle's real body. 

Confirmation

The price trends above the real body of the green candle.



Candles, Piercing Pattern
Bullish Reversal Strategy V

Setup

Downtrend 

Psychology

The bears continue the downtrend by forming a long red bodied candle. The gap opening down to the second candle initially appears bearish, but the small body of the star shows a possible loss of momentum. The bulls then re-enter the market in force, ideally gaping up from the star, and driving price to close well within (or above) the first candle. The higher the close, the more decisive the victory of the bulls over the bears. 

Confirmation

The price trades above the body of the long green candle. 



Candles, Morning Star
Bullish Reversal Strategy VI

Setup

Downtrend

Psychology

The lower extreme of the shadows represents an area of support. Bears were not willing to sell below this price, so the bulls returned in force to drive the price back up. The Tweezer Bottom forms when two or more candle's lower shadows from at the same level, confirming the strength of this support, and the likelihood that the downtrend will either pause or reverse to an uptrend. 

Confirmation

The price trades above the level of support. Price trading above the body of the Tweezer Bottom candles is more bullish, and likely to indicate a reversal of trend rather than a change to consolidation. 





Candles, Tweezer Bottom
Bullish/ Bearish Reversal strategy

Setup

A trending market- an uptrend for a bearish reversal or a downtrend for a bullish reversal. 

Psychology

A Doji indicates a 'tug of war' between the bulls and bears in which neither party was dominant. Price may have been driven up and/or down from the open, but was driven back to close equal to (or almost equal to) the opening price. This indecision in the market often precedes a change in trend to either a sideways or a reverse direction trend. 

The Gravestone Doji is more bearish, and therefore more effective at a market top. The Dragonfly Doji is more bullish, and therefore more effective at a market bottom. 

Confirmation

The price trades above the doji at a market bottom, or below the doji at a market top. 




Doji
Bullish/ Bearish Reversal Strategy II

Setup

A trending market- an uptrend for a bearish reversal, or a downtrend for a bullish reversal.

Psychology

Bearish Harami- Often found at market top, the uptrend continues with the bulls driving the price higher to complete a green candle. The second candle shows indecision as the price then stalls. Neither the bulls nor the bears are able to dominate, resulting in a small candle of either color contained within the first body candle. This indecision often precedes a change to sideways congestion or a reversal of the trend. 

Confirmation

The price trades above the pattern for a bottom reversal, or below the pattern for a top reversal.