Trading Dictionary

Any cryptocurrency other than bitcoin.

Being unable to act because you are still looking for more confirmation.

The lowest price a seller is currently willing to accept for an asset.

When an option seller is required to fulfill the contract’s obligation.

The average size of an instrument’s price range per period, including gaps.

The first currency in a pair — the one being bought or sold.

An extended period of falling prices and generally negative sentiment.

The highest price a buyer is currently willing to pay for an asset.

A moving average with volatility bands plotted a set number of standard deviations above and below.

An entry order submitted together with its stop loss and take profit.

The win rate a strategy needs, at a given risk/reward, just to avoid losing money.

When price moves decisively beyond an established support or resistance level.

The firm that routes your orders to the market and holds your account.

An extended period of rising prices and generally positive sentiment.

A contract giving the right, but not the obligation, to buy an asset at a set price before expiration.

A chart element showing the open, high, low and close for one period.

Borrowing in a low-interest currency to hold a higher-interest one, collecting the difference.

An automatic trading pause triggered by an extreme price move.

Holding crypto assets offline, away from exchanges and internet-connected systems.

Growth applied to a balance that already includes previous growth.

Seeking out information that supports a position while discounting evidence against it.

A period where price moves sideways in a narrow range without clear direction.

The hidden risk of holding several positions that tend to move together.

Two currencies quoted against each other, showing how much of one buys the other.

How much an option’s price moves for a $1 move in the underlying.

When price makes a new extreme but the indicator does not, suggesting momentum is fading.

A cash payment distributed to shareholders out of company profits.

A candle that opens and closes at nearly the same price, showing indecision.

The decline from an account’s peak value to its lowest point before a new peak.

A company’s net profit divided by its number of outstanding shares.

A company’s scheduled quarterly disclosure of financial results.

The price at which you open a position.

The price at which you close a position, whether at a profit or a loss.

The average amount you expect to win or lose per trade over a large sample.

The date an options contract ceases to exist.

A moving average that weights recent prices more heavily than older ones.

Trading sessions before the open and after the close, with far less liquidity.

The part of an option’s premium beyond intrinsic value, reflecting time and volatility.

A move beyond a key level that quickly reverses back inside the prior range.

Horizontal levels drawn at set percentages of a prior move, used to anticipate pullback depth.

The actual execution of an order, at the price and quantity you really received.

The number of shares actually available for public trading.

Entering a trade because the move is already happening, not because the setup appeared.

A recurring payment between long and short holders that keeps a perpetual near spot price.

The rate at which delta changes as the underlying moves.

A jump between one period’s close and the next period’s open with no trading in between.

The cost paid to a blockchain network to process a transaction.

A scheduled reduction in the rate at which new coins are created.

A swing high that exceeds the previous swing high, confirming upward momentum.

A swing low that sits above the previous swing low, showing buyers stepping in earlier.

The market’s expectation of future price movement, derived from option prices.

An option that currently has intrinsic value.

The portion of an option’s premium that would be realized if exercised right now.

Using borrowed capital to control a position larger than your account balance.

An order to buy or sell at a specified price or better — it may not fill at all.

The price at which a leveraged position is forcibly closed because margin is exhausted.

How easily an asset can be bought or sold without moving its price.

A sharp move beyond an obvious level that triggers clustered stops before reversing.

A position that profits when the price rises.

The tendency to feel losses about twice as strongly as equivalent gains.

The standardized unit of trade size in forex.

A swing high that fails to reach the previous swing high, showing weakening demand.

A swing low that breaks below the previous swing low, confirming downward momentum.

A momentum indicator built from the difference between two exponential moving averages.

The most heavily traded currency pairs, all involving the US dollar.

The capital your broker requires you to post to open and hold a leveraged position.

A broker demand for more capital when account equity falls below the required minimum.

The total market value of a company’s shares — share price times shares outstanding.

An instruction to buy or sell immediately at the best price currently available.

The pattern of highs and lows that describes whether a market is trending or ranging.

The largest peak-to-trough decline an account or strategy has ever experienced.

The average price over a set number of periods, recalculated as each new period closes.

The total market value of a position — size multiplied by price.

A pair of orders where filling one automatically cancels the other.

The total number of option contracts currently outstanding at a given strike.

The live list of all resting buy and sell orders at each price level.

An option with no intrinsic value, whose entire premium is time and volatility.

Taking more positions than your strategy actually justifies.

A company’s share price divided by its earnings per share.

When only part of your order executes and the rest stays open or is canceled.

A US regulatory designation for accounts making four or more day trades in five business days.

A leveraged derivative contract that tracks an asset’s price with no expiration date.

The standard smallest price increment in a currency pair — usually 0.0001.

How much one pip of movement is worth in your account currency, given your position size.

The combined risk of every open position, measured as a percentage of your account.

The amount of an asset you buy or sell in a single trade.

The price paid for an options contract.

A temporary move against the prevailing trend before it resumes.

A contract giving the right, but not the obligation, to sell an asset at a set price before expiration.

The second currency in a pair — the one the price is expressed in.

A trade’s result expressed as a multiple of the amount you originally risked.

A market bounded between a clear high and low, with no directional trend.

Overweighting recent outcomes when judging what is likely to happen next.

A price area where selling has repeatedly been strong enough to stop an advance.

When price returns to a broken level to confirm it now holds from the other side.

Trading to recover a loss rather than because a valid opportunity appeared.

The set of rules that decides how much you can lose, before you think about what you can win.

The probability that a series of losses reduces an account below the point of recovery.

The fixed share of your account you are willing to lose on any single trade.

How much you stand to gain compared with how much you stand to lose on a trade.

A momentum oscillator from 0 to 100 that compares the size of recent gains to recent losses.

A unit of ownership in a company.

A position that profits when the price falls.

The number of shares sold short but not yet bought back, often shown as a percent of float.

The difference between the price you expected and the price you actually got.

A market where assets are bought and sold for immediate delivery and full ownership.

The gap between the bid and the ask — the built-in cost of entering a trade.

A crypto asset designed to hold a fixed value, usually one US dollar.

A momentum indicator showing where the close sits within the recent high-low range.

The gap between your entry and your stop loss — your risk on a single unit.

A stop order that becomes a limit order instead of a market order when triggered.

A predefined exit that closes a losing trade before the loss becomes serious.

A dormant order that becomes a market order once price reaches a trigger level.

The price at which an option contract can be exercised.

A price area where buying has repeatedly been strong enough to stop a decline.

The interest charged or earned for holding a forex position overnight.

A peak with lower highs on both sides — a local turning point in price.

A trough with higher lows on both sides — a local turning point where buyers took control.

A predefined price where a winning trade is closed automatically.

How much value an option loses per day purely from the passage of time.

The short code that uniquely identifies a tradable instrument on an exchange.

The instruction that says how long an order stays active before it expires.

The period each candle on a chart represents, from one minute to one month.

A record of every trade, including the reasoning behind it and the result.

A written set of rules defining what you trade, how you size it, and when you exit.

A stop loss that follows price in your favor and never moves back against you.

A sustained directional bias in price, built from a repeating pattern of highs and lows.

A straight line drawn along successive highs or lows to visualize a trend’s slope.

How much an option’s price changes for a one-point move in implied volatility.

How much and how quickly an asset’s price moves over a given period.

A stop placed at a multiple of the instrument’s Average True Range rather than a fixed percentage.

The number of shares, contracts or units traded during a period.

A histogram showing how much volume traded at each price level rather than in each period.

The average price over a session, weighted by the volume traded at each price.

The percentage of your trades that close at a profit.