GLOSSARY
Day trading glossary
100 day trading terms, from A to Z, explained simply.
A
- Aggressive Buying
- A buy executed at the ask price.
- Aggressive Selling
- A sell executed at the bid price.
- Anxiety
- An emotional state that leads to impulsive decisions.
- Asset
- An instrument traded in the market (indices, currencies, stocks, cryptocurrencies).
B
- Bearish Candle
- A candle that closes below its open.
- Beginner Trader
- Focuses on winning fast.
- Bollinger Bands
- An indicator that measures volatility.
- Bottom
- A zone where the price struggles to go lower.
- Breakout
- When the price moves past a support or resistance.
- Broker
- A company that intermediates your trades in the market.
- Bullish Candle
- A candle that closes above its open.
C
- Candle
- Shows the open, high, low and close of the price.
- Capital Preservation
- Making not blowing the account the priority.
- Chart
- A visual representation of price over time.
- Clarity
- A clean chart and a simple reading.
- Confirmation
- Validating the scenario before entering.
- Consistency
- Repeatable results over time.
- Consistency
- The ultimate goal of every trader.
- Consistent Trader
- Focuses on losing little.
D
- Day Trade
- Buying and selling an asset on the same day, without holding the position overnight.
- Discipline
- Following the plan even under pressure.
- Discipline > Emotion
- The basic rule of trading.
- Double Bottom
- A chart pattern that may signal a bullish reversal.
- Double Top
- A chart pattern that may signal a bearish reversal.
- Drawdown
- A sequence of accumulated losses.
E
- Edge
- The statistical advantage of a strategy.
- Emotions
- The psychological state that influences decisions.
- Expectancy
- The average result of a strategy.
- Exponential Moving Average
- Gives more weight to recent prices.
F
- False Breakout
- When the price breaks out and quickly comes back.
- Fill
- The execution of an order.
- Financial Market
- The environment where buyers and sellers trade assets.
- FOMO
- Fear of missing out on an opportunity.
- Frequency
- The number of trades.
G
- Gap
- A space on the chart with no trading.
H
- High Liquidity
- Easy execution.
I
- Indicator
- A mathematical tool that helps analyze price.
L
- Learning
- The market demands continuous study.
- Less Is More
- Few trades, done well.
- Leverage
- Lets you trade larger amounts than your available capital (increases risk).
- Limit Order
- Executes only at the price you set.
- Liquidity
- How easily an asset can be bought or sold quickly.
- Long Term
- A view beyond the current day.
- Lot
- The standard quantity traded of an asset.
- Low Liquidity
- Difficult execution.
M
- MACD
- An indicator that measures trend and momentum.
- Market Context
- The overall reading before entering.
- Market Order
- Executes immediately at the best available price.
- Martingale
- Increasing the size after a loss (high risk).
- Mini Contract
- A smaller version of a futures contract, more accessible for beginners.
- Money Stop
- A stop based on the maximum amount you accept to lose.
- Moving Average
- Shows the average price over a period.
- Moving Average Crossover
- A possible sign of a trend change.
N
- Noise
- Random price movement.
O
- OCO Order
- One order cancels the other (stop and target).
- Order
- An instruction sent to the broker to buy or sell.
- Order Book
- A list of buy and sell orders.
- Overbought
- A zone where the price may be stretched to the upside.
- Oversold
- A zone where the price may be stretched to the downside.
- Overtrading
- Taking too many trades.
P
- Partial Fill
- When an order is only partly executed.
- Patience
- The ability to wait for good opportunities.
- Price Action
- Analysis based only on price, without indicators.
- Price Channel
- Movement between two parallel lines.
- Probability
- No trade is a certainty.
- Process
- Focusing on executing well, not just on winning.
- Professionalism
- Trading treated as a business.
- Pullback
- A price correction after a strong move.
Q
- Quality
- Well-selected entries.
R
- Range
- A price band in which the market moves.
- Resistance
- A zone where the price tends to stall rallies.
- Responsibility
- A trader is responsible for their own results.
- Result
- A consequence of the process.
- Revenge Trading
- Trading to win back a loss quickly.
- Risk Capital
- Money that can be lost without affecting your life.
- Risk Management
- A set of rules to protect your capital.
- Risk per Trade
- How much you accept to lose on one trade.
- Risk/Reward
- The ratio between what you can lose and what you can gain.
- RSI
- An indicator that measures the strength of a move.
S
- Setup
- A set of entry rules.
- Sideways Market
- When the market moves without a clear direction.
- Simple Moving Average
- The arithmetic average of prices.
- Slippage
- The difference between the expected and the executed price.
- Spread
- The difference between the buy and sell price.
- Stop Loss
- The maximum loss limit.
- Stop Order
- An order triggered when the price reaches a certain level.
- Strong Candle
- A large candle showing buyers or sellers in control.
- Support
- A zone where the price tends to hold declines.
- Survival
- Staying in the market over the long term.
T
- Take Profit
- The profit target of the trade.
- Technical Stop
- A stop based on the chart structure.
- Timeframe
- The time scale of the chart.
- Top
- A zone where the price struggles to go higher.
- Trader
- A person who trades financial assets seeking profit from price changes.
- Trading Journal
- A record of your trades for review.
- Trading Plan
- A set of rules defined before entering.
- Trend
- The prevailing direction of price (up, down or sideways).
V
- Volatility
- How strongly the price swings.
- Volume
- The quantity traded.
W
- Wick
- The part of the candle that shows price rejection.