Glossary¶

Complete reference of terms used in the RQF-ML system.

A¶

ATR (Average True Range)

Volatility indicator measuring the average range of price movement over a period.

B¶

BoS (Break of Structure)

Price breaking a swing point in the direction of the trend, indicating continuation.

Breaker Block

A failed Order Block that is broken and becomes a zone of opposite bias.

C¶

CHoCH (Change of Character)

Early sign of potential trend reversal, before full MSS confirmation.

Confluence

Multiple factors aligning (OB + FVG + HTF alignment + session) to strengthen a setup.

D¶

Discount Zone

The area from 0.0 to 0.382 Fibonacci - where to look for long entries.

Displacement

Aggressive, impulsive price movement showing institutional participation.

E¶

EQH (Equal Highs)

Multiple swing highs at similar prices, forming a liquidity pool.

EQL (Equal Lows)

Multiple swing lows at similar prices, forming a liquidity pool.

F¶

FVG (Fair Value Gap)

Imbalance in price delivery creating a gap between candles. Price often returns to fill.

H¶

HH (Higher High)

A swing high that is higher than the previous swing high (uptrend characteristic).

HL (Higher Low)

A swing low that is higher than the previous swing low (uptrend characteristic).

HTF (Higher Timeframe)

A larger timeframe used for directional bias (e.g., 4H for 15m trades).

I¶

ICT (Inner Circle Trader)

Trading methodology focused on institutional order flow and smart money concepts.

Invalidation

When a setup fails - price closes beyond the extreme level (0.0 Fib).

K¶

Kill Zone

High-probability trading sessions (London, NY AM, NY PM).

L¶

LH (Lower High)

A swing high that is lower than the previous swing high (downtrend characteristic).

LL (Lower Low)

A swing low that is lower than the previous swing low (downtrend characteristic).

Liquidity

Clusters of stop losses that institutions target (EQH, EQL, round numbers).

M¶

Mitigation

Price returning to an Order Block or FVG to fill the imbalance.

MSS (Market Structure Shift)

Price breaking structure against the trend, signaling potential reversal.

O¶

OB (Order Block)

The last opposing candle before an impulsive move - institutional order zone.

OOS (Out of Sample)

Data not used in model training, used for validation.

P¶

PDH/PDL (Previous Day High/Low)

Key liquidity levels from the prior session.

Premium Zone

The area from 0.618 to 1.0 Fibonacci - where to look for short entries.

Pivot

A swing high or swing low point on the chart.

R¶

R:R (Risk:Reward)

Ratio of potential profit to potential loss (e.g., 2:1 means 2x reward vs risk).

Repaint

When historical signals change after they're drawn (unreliable indicator).

RQF (Range Qualification Framework)

The system's implementation of ICT concepts: BoS → Sweep → MSS → Entry.

S¶

Sharpe Ratio

Risk-adjusted return metric. Higher is better (>1.0 is good, >2.0 is excellent).

Smart Money

Institutional traders (banks, hedge funds) with large capital and information edge.

Sweep

Price wicking beyond a level and closing back - liquidity grab.

T¶

TH (Trigger High)

The highest high between BoS and Sweep - MSS must break this level.

TL (Trigger Low)

The lowest low between BoS and Sweep - MSS must break this level.

TP (Take Profit)

Target price level for closing a profitable position.

W¶

Walk-Forward

Validation method that tests on sequential out-of-sample periods.

Wick

The thin line of a candle extending beyond the body (shadow).

Abbreviations Quick Reference¶