Trading Glossary

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

Average True Range — measures typical price movement per period, used to size stops.

The first currency in a pair (EUR in EUR/USD) — the one you're buying or selling.

A sustained decline of 20%+ from recent highs, usually with pessimistic sentiment.

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

A distributed, tamper-resistant ledger that records crypto transactions across many computers.

A moving average with bands set at standard deviations above and below to show volatility and extremes.

When price pushes decisively through a support or resistance level, often starting a new trend.

A sustained period of rising prices and optimistic sentiment.

A contract giving the right (not obligation) to buy an asset at a set strike price before expiry.

A chart symbol showing the open, high, low, and close for a period. The body and wicks reveal buying vs selling pressure.

Borrowing a low-interest currency to buy a higher-yielding one, earning the rate difference.

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

When price and an indicator (like RSI) disagree — often an early warning of a reversal.

A cash payment a company distributes to shareholders out of its profits.

A candle with a tiny body where open and close are nearly equal — signals indecision.

The peak-to-trough decline in your account balance, a key measure of risk.

A repeatable advantage that makes your strategy profitable over many trades.

A two-candle pattern where the second candle's body fully covers the first — a strong reversal signal.

Earnings Per Share — a company's net profit divided by its shares outstanding.

An imbalance left by a fast move where price skipped levels; often gets filled later.

Horizontal levels (38.2%, 50%, 61.8%) marking likely pullback zones within a trend.

Fear Of Missing Out — the urge to chase a fast-moving market, usually near the top.

Fear, Uncertainty, and Doubt — negative sentiment that can drive panic selling.

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

The market's forecast of future volatility, baked into an option's price.

Borrowed capital that multiplies your position size — and both gains and losses.

An order to buy or sell only at a specified price or better.

How easily an asset can be bought or sold without moving its price. High liquidity = fast fills, small spreads.

A quick spike beyond a swing high/low to trigger stops before price reverses the other way.

A standardized forex trade size. A standard lot is 100,000 units of the base currency.

Moving Average Convergence Divergence — tracks momentum via the relationship of two EMAs and a signal line.

The collateral you must post to open a leveraged position.

Share price multiplied by shares outstanding — the total value the market puts on a company.

A participant who continuously quotes buy and sell prices, providing liquidity.

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

The average price over N periods, smoothing noise to reveal trend direction.

An ICT concept: the last opposing candle before a strong impulsive move, often revisited before continuation.

Price divided by earnings per share. A quick gauge of how expensive a stock is relative to its profits.

The smallest standard price move in forex — usually the 4th decimal (0.0001).

The price paid to buy an option contract.

A temporary move against the prevailing trend — a chance to enter at a better price.

A contract giving the right to sell an asset at a set strike price before expiry.

The second currency in a pair (USD in EUR/USD) — used to price the base.

A price level where selling tends to appear, slowing or reversing a rise.

Impulsively trading to recover a loss — a fast path to bigger losses.

The ratio of potential loss to potential gain on a trade. Aim for at least 1:2.

Relative Strength Index — a 0-100 momentum oscillator. Above 70 = overbought, below 30 = oversold.

The difference between the expected fill price and the actual fill price, common in fast markets.

The gap between the bid and the ask. A tight spread means a liquid, cheap-to-trade market.

A crypto token pegged to a stable asset like the US dollar (e.g. USDT, USDC).

A resting order that closes a position once price hits a set level, capping your loss.

The fixed price at which an option can be exercised.

A price level where buying tends to appear, slowing or reversing a decline.

A resting order that closes a position at a target price to lock in gains.

The rate an option loses value each day as expiry approaches (time decay).

A stop that moves with price in your favour, protecting profit while giving room to run.

The general direction of price: higher highs and higher lows (up), or lower highs and lower lows (down).

How much and how quickly a price moves. Higher volatility means bigger opportunity and bigger risk.

The number of shares or contracts traded in a period. Confirms the strength behind a move.

Volume-Weighted Average Price — the average price weighted by volume, a key intraday reference for institutions.

Software or hardware that stores the keys used to access and move your crypto.