Van Tharp Institute Glossary
The Van Tharp Institute Glossary is a comprehensive resource designed to help traders and investors understand the essential terminology and concepts related to trading psychology, systems development, and market analysis. Whether you’re a beginner or an experienced trader, this glossary offers clear definitions and insights into the principles that Dr. Van Tharp championed. By providing a deeper understanding of key terms, the glossary aims to enhance your knowledge and support your journey toward consistent and profitable trading. Explore the glossary to unlock the language of trading success.
MACD
See moving average convergence divergence.
Margin
The percentage of the total price of something that an exchange requires you to have...
Marked to Market
A term used to describe the fact that open positions are credited or debited funds...
Market Maker
A broker, bank, firm, or individual trader that makes a two-way price to either buy...
Market Order
An order to buy or sell at the current market price. Market orders are usually...
Market SQN
A measure of a market’s movement through an application of the System Quality Number calculation....
Market Type
A categorization of market conditions that helps describe various price behaviors. Combining trend measurements of...
Market’s Money
A form of position sizing in which your core equity is sized at a conservative...
Martingale Strategy
A position-sizing strategy in which the position size increases after you lose money. The classic...
Maximum Adverse Excursion (MAE)
The maximum loss attributable to price movement against the position during the life of a...
Maximum Mean Return
When you do a number of simulations, you want to know the mean (average) return...
Maximum Median Return
When you do a number of simulations, you want to know the median (half are...
Maximum/Minimum Ending Equity
When you simulate a position sizing strategy, two of the data points that you probably...
Mean
The average or the sum of all of the numbers divided by the total number...
Mechanical Trading
A form of trading in which all actions are determined by a computer with no...
Median
The middle point of a sequence of numbers arranged in sequence. In other words, half...
Mental Rehearsal
The psychological process of preplanning an event or strategy in one’s mind before actually doing...
Mental Scenario Trading
A trading concept in which the trader uses his or her macro assessment of what...
Modeling
The process of determining how some form of peak performance (such as top trading) is...
Momentum
An indicator that represents the change in price now from some fixed time period in...
Money Management
A term that has been frequently used to describe position sizing but that has so...
Monte Carlo Simulation
A simulation that determines the probability of trading results based on multiple trials.
Moving Average
A method of representing a number of price bars (that is, showing the high, low,...
Moving Average Convergence Divergence (MACD)
A technical indicator developed by Gerald Appel that follows the difference between a series of...
Multiple-tier Position Sizing
Changing the value of your position sizing variable multiple times when some performance criterion is...