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Week 1 Vocabulary 

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Abundance –  In trading terms… think of an overflowing fullness of quantity, affluence, and wealth. The market is infinite with infinite opportunity.  There is never a missed opportunity     because there is always opportunity.  Abundance truly is a state of mind in recognizing these truths regardless of ones current financial situation.  Having this mindset is critical in experiencing and realizing consistent success in the market place.

 Candlestick – A form of measurement showing price fluctuation developed by the Japanese more than 400 years ago.  A narrow line (shadow, also called the wick) shows the day’s price range.  A wider body marks the area between the open and the close.  If the close is above the open, the body is typically shown in green (not filled); if the close is below the open, the body is typically shown in red (filled), we at ONTOTRADE use the color blue (filled).

 Demand –  A consumer’s desire and willingness to pay for a good or service.  Think of demand as what you want.  For example, market demand is the total of what everybody in the      market wants. In some instances the demand curve is downward sloping, since consumers will want to buy more as price decreases.  This is why you will sometimes see a drop with a positive BA difference.  Along with supply, demand is one of the two key determinants of the market price.

 Economics –  A social science that studies how individuals, governments, firms and nations make  choices on allocating scarce resources to satisfy their unlimited wants. Economics can  generally be broken down into: macroeconomics, which concentrates on the behavior of the aggregate economy; and microeconomics, which focuses on individual consumers.

 Mindset – A habitual or characteristic mental attitude or disposition that predetermines a person’s responses to and interpretations of situations.

 Resistance –  Resistance is a price level at which there is a large enough supply of a financial instrument     available to cause a halt in an upward trend and turns the trend down.  Resistance levels indicate the price at which most investors feel that prices will move lower.  Imagine a concrete rooftop at a specific price level that a financial instrument is having a hard time breaking through.  This is   referred to as resistance. Furthermore, if price is going to surpass a point of resistance, it will most likely bounce off of it before it does.  Once price breaks through this level, it is referred to as a breakout.

 Scarcity – Like abundance, scarcity is also a mindset but it is the complete opposite.  The root of scarcity is fear.  Usually a fear of loss but it can also be a paralysis of the fear of success.  Letting go of this fear will open the gates for success and abundance to flow freely.

 Sim-millionaire –  A trader who does extremely well in simulated trading but is so overcome by fear that they rarely if  ever take a live trade.

Simulation Trading – A hypothetical trade that does not involve any monetary transactions using software that         simulates an actual trading experience.  It is a risk-free way to learn the ropes of the market. As you go through the ONTOTRADE course, you will simulate your trades until you have      consistent success before trading with real money.

 Supply – A fundamental economic concept that describes the total amount of a specific good or service that is available to consumers.  Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph.  This relates closely to the      demand for a good or service at a specific price; all else being equal, the supply provided by    producers will rise if the price rises because all firms look to maximize profits.

 Support –  Support is a price level at which there is a large enough demand for a stock to cause a halt in a downward trend and then turns price in opposite direction.  Support levels can indicate a price level at which some investors feel that prices will move higher once it has held over time. Imagine a concrete basement at a specific price level that a financial instrument is having  a hard time breaking through.  This is referred to as support.  Furthermore, if price is going to surpass a point of support it will most likely bounce off of it before it does.

TRADER’S MINDSET – In ONTOTRADE’s Trader’s Mindset classes, we are focused on cultivating a “growth mindset” that promotes continued development of talents and abilities through productive teaching and learning, hard work and persistence.  Our study is focused on the psychology of trading, allowing our students to better understand and prepare themselves for any emotional obstacles that may come their way in their daily pursuit of excellence and success in trading. “Success is peace of mind which is a direct result of self-satisfaction in  knowing you made the effort to become the best of which you are capable.” – John Wooden

 TRADING FROM ABUNDANCE – First and foremost, trading capital must be risk capital.  ONTOTRADE recommends all traders trade with an amount they are willing and able to risk. Most professional traders trade with 8% to 25% of their capital; while others trade with 25% to 50% of the capital in their accounts.  This creates an       abundance mentality.  For example, If you were to open your account with the minimum of $2,500.00 this would allow you to trade with 2 contracts at most on the Emini S&P.  If you lose your first trade you can no longer trade with 2 contracts; you are down to only being able to trade 1 contract.  You   default into a have to make money emotional mindset, because now you have to make money.  Trading because you have to make money will only result in loss.  You get what you  focus on most.

 JOURNAL KEEPING IN THE ONTOTRADE Journal –  Your success in trading will be a direct reflection of how well you keep track of your experience through executing trades.  Trading is all based off of    established rules, like Discipline, Execution and Consistency.  In order to have consistent success you must create rules for yourself and then become     impeccably disciplined and stick to those rules without wavering.  Log your trades in the DFTT™ each day.  Not only will it help you keep track of your monetary statistics but it will also help ONTOTRADE help you.  If we don’t know where your strengths and weaknesses are, it is very difficult for us to help you achieve success.

 SIMULATION – Treat simulation as if it is real. The key to mastering the market is mastering your mind. If you can condition your mind to think simulation is real then you will experience the same success trading live. Never get caught up in finding yourself rationalizing and saying “I would never have made that trade with real money”.  The reality is that you will, “What you do in Sim you will do live.”  How you practice is how you will play.

 GOING LIVE – Three words of advice… Don’t Change Anything!!! If you have treated simulation seriously, dedicated yourself to be discipline, execution and consistency following the system as it is laid out; then you will experience the same results with real money.  Do exactly what you have been doing through your training period.  The important thing is to not rush it. You have all the time there is. You never miss out on opportunity because there is always opportunity.

 CONTRACT KILLING – Contract killing is when a trader tries to recapture loss by adding more contracts after they have lost with the intent to make ALL of their money back twice as fast as they lost it.  It also refers to the example above of not trading out of abundance.  Trading this way creates a scarcity mentality and results in the draining of your account.

SUPPORT & RESISTANCE (SR) –  This refers to price action or specific MAJOR & SUBSTANTIAL(SR) price levels in the market. That’s’ where price has either tested, held, straddled and retested for validation. The SUPPORT & RESISTANCE’s are typically where substantial entries and exits take place in most ONTOTRADE approved trades.