Glossary

Trading glossary, A–Z.

Plain-English definitions of the terms you meet when you learn to trade. Education only, not financial advice.

219 of 219 terms

A

  • AccumulationA sideways phase where institutions quietly build positions before a markup — often at lows.
  • Algorithmic TradingAutomated computer systems executing orders by rules, in microseconds — most market volume today.
  • AltcoinAny cryptocurrency that is not Bitcoin. Higher beta: moves harder than BTC in both directions.
  • ArbitrageProfiting from price differences of the same asset on different venues — fast, low-risk, institutional.
  • AskThe lowest price sellers currently demand. You BUY at the ask.
  • Asset ClassA category of investments — equities, currencies, commodities, bonds, crypto.
  • ATH — All-Time HighThe highest price ever traded. Above it there is no resistance history — only psychology.
  • ATR — Average True RangeIndicator measuring average candle range — a volatility yardstick used for stop sizing.
  • Average DownAdding to a losing position to lower the entry price — a common account-killer without a plan.

B

  • BacktestingTesting a strategy on historical charts to measure its edge before risking money.
  • Base CurrencyThe first currency in a pair — EURUSD = how many USD one EUR buys.
  • Bear MarketA prolonged falling market (commonly −20% from highs). Sellers in control.
  • BiasYour directional opinion for the session, decided top-down from the higher timeframe BEFORE trading.
  • BidThe highest price buyers currently offer. You SELL at the bid.
  • BondA tradeable loan to a government or company paying interest — the world's biggest "safe" market.
  • Bond YieldThe effective interest a bond pays. Rising yields pull money out of risk assets.
  • BOS — Break of StructurePrice closes beyond the previous swing IN trend direction — confirmation the trend continues.
  • Bracket OrderEntry + stop loss + take profit sent as one package. The professional standard.
  • Break-Even (BE)Moving your stop to entry so the trade can no longer lose.
  • Breaker BlockA failed order block that flips: broken demand starts acting as supply (and vice versa).
  • BreakoutPrice CLOSES beyond a level with conviction — a regime change, valid only with the body, not a wick.
  • BTC DominanceBitcoin's share of total crypto market cap — crypto's internal risk-on/off gauge.
  • Bull MarketA prolonged rising market. Buyers in control; dips get bought.
  • Buy-Side LiquidityStop and entry orders resting ABOVE highs — the pool price runs to before reversing down.

C

  • CandlestickOne time period drawn as body + wicks, recording open, high, low and close.
  • Central BankThe institution controlling a currency and its interest rate — Fed (USD), ECB (EUR), BoJ (JPY).
  • CFD — Contract for DifferenceA broker contract mirroring an asset's price. Trade long/short with leverage without owning it.
  • CHoCH — Change of CharacterThe FIRST structural break against the trend — the earliest reversal warning.
  • Circuit Breaker (Personal)Your hard daily stop — e.g. two losses = done for the day. Kills revenge trading.
  • CommissionThe fee your broker charges per trade, alongside spread and swap.
  • CompoundingProfits generating profits. Small consistent gains become exponential over time.
  • ConfluenceMultiple independent signals (zone + fib + structure) agreeing at ONE price — where pros strike.
  • ConsolidationSideways compression after a move — the market catching its breath before deciding.
  • CorrectionA counter-trend move (in Elliott: the 3-wave A-B-C) that resets the trend for continuation.
  • CorrelationHow two assets move together. DXY vs gold: inverse. Nasdaq vs S&P: positive.
  • COT ReportWeekly CFTC report revealing how commercials and large speculators are actually positioned.
  • CounterpartyWhoever is on the other side of your trade. Every buy needs a seller.
  • CPI — Consumer Price IndexTHE inflation number. A hot CPI = rate-hike fear = risk assets sell.
  • Crypto ExchangeA venue where crypto trades (Binance, Coinbase, Kraken). Custody there ≠ your keys.

D

  • Day TradingOpening and closing positions within the same day — no overnight exposure.
  • Dealing RangeThe range between the last major swing low and high — the frame for premium/discount.
  • Demand ZoneThe origin area of an explosive move UP — unfilled institutional buy orders likely remain.
  • DerivativeAny contract deriving its value from an underlying asset — CFDs, futures, options.
  • DiscountThe cheap lower half of the dealing range (below 50%) — where professionals buy.
  • DistributionA sideways phase where institutions unload positions to the crowd — often at highs.
  • DiversificationSpreading capital across uncorrelated assets so one failure can't sink you.
  • DojiA candle closing where it opened — tiny body, indecision. Meaningful only at key levels.
  • DovishCentral-bank tone favoring LOWER rates / easier money — usually bullish for risk assets.
  • Dow TheoryThe founding framework of trend analysis: trends persist until structure proves otherwise.
  • DrawdownThe distance from your account's peak to its low. The number that ends careers — cap it.
  • DXY — US Dollar IndexThe dollar vs a basket of majors. The anchor: DXY up usually pressures gold, BTC and EUR.

E

  • Economic CalendarThe schedule of market-moving releases (CPI, NFP, FOMC). Checked before EVERY session.
  • Elliott WaveTheory that markets move in repeating 5-wave impulse + 3-wave correction crowd cycles.
  • Engulfing CandleA candle whose body fully swallows the previous one — momentum change signal at key levels.
  • EntryThe price where your position opens. Planned in advance — never improvised.
  • Equal Highs / LowsTwo+ swings at the same price — a textbook stop cluster and liquidity magnet.
  • EquilibriumThe 50% midpoint of the dealing range — the fair-value line between premium and discount.
  • EquityYour account's live value including open positions.
  • Equity CurveThe chart of your account value over time — smooth and rising = real edge.
  • ETFExchange-Traded Fund — a tradeable basket of assets. ETF flows reveal where big money moves.
  • ExecutionThe act of actually placing and filling orders — where plans meet reality.
  • ExitThe price where your position closes — at target, at stop, or by plan. Never by panic.
  • ExpectancyAverage R earned per trade over many trades. Positive expectancy = a real, tradeable edge.
  • ExposureTotal capital at risk across all open positions right now.

F

  • Fair Value Gap (FVG)The 3-candle imbalance: a price range skipped by one violent candle — a magnet for revisits.
  • FakeoutA breakout that instantly fails — usually a liquidity sweep in disguise. The close tells the truth.
  • Fear & Greed IndexSentiment gauge 0–100. Extremes are contrarian: max fear ≈ bottoms, max greed ≈ tops.
  • Fibonacci ExtensionLevels beyond 100% (1.272 / 1.618) projecting profit targets after the pullback.
  • Fibonacci RetracementRatio tool (0.382 / 0.5 / 0.618…) measuring how deep a pullback has gone.
  • FillThe moment your order executes. Your fill price is where you actually got in.
  • FOMCThe Fed's rate-setting meeting — the biggest scheduled event in global markets.
  • FOMOFear Of Missing Out — chasing extended moves late. The most expensive emotion in trading.
  • Forex (FX)The global currency market — $7.5T daily, open 24/5, the largest market on earth.
  • Fundamental AnalysisValuing assets through economics — rates, inflation, earnings — the WHY behind big moves.
  • Funding RateThe periodic fee between longs and shorts keeping crypto perpetuals near spot price.
  • FuturesStandardized exchange contracts to buy/sell at a set date — the institutional derivatives arena.

G

  • GapEmpty space between one close and the next open — price jumped without trading between.
  • GDPGross Domestic Product — the broadest economic growth measure; recessions = two negative quarters.
  • Golden Cross50-day average crossing above the 200-day — a classic long-term bullish regime signal.
  • Golden PocketThe 0.618–0.65 Fibonacci band — the highest-probability pullback entry area.
  • Golden Ratio1.618 / its inverse 0.618 — the proportion behind Fibonacci levels in markets and nature.

H

  • HalvingBitcoin's supply issuance cut in half every ~4 years — the clock of the crypto macro cycle.
  • HammerA candle with a long lower wick at a low — sellers pushed, buyers slammed it back. Bullish at support.
  • HawkishCentral-bank tone favoring HIGHER rates / tighter money — usually bearish for risk assets.
  • HedgeA position opened to offset the risk of another — insurance, not profit-seeking.
  • Heikin-AshiAveraged "smoothed" candles. Look clean, but hide real entries/exits — display only, never execute from them.
  • HFT — High-Frequency TradingAlgorithms trading in micro-seconds, farming spreads and reacting to news instantly.
  • Higher High (HH)A swing high above the previous one — uptrend fuel.
  • Higher Low (HL)A pullback low above the previous low — buyers stepping up earlier. Where pros buy.
  • HODLCrypto slang for long-term holding regardless of volatility (from a famous "hold" typo).

I

  • ImbalancePrice moved so fast one side barely traded — inefficient pricing the market tends to revisit.
  • ImpulseThe powerful move WITH the trend (in Elliott: the 5-wave advance). Fast, directional, high volume.
  • IndexA weighted basket of stocks traded as one — Nasdaq 100, S&P 500, DAX 40.
  • IndicatorA calculation drawn on the chart (RSI, MA…). Derived FROM price — always late to it.
  • InducementAn enticing minor level luring early entries — engineered bait before the real zone gets hit.
  • InflationThe rate at which money loses buying power. The force central banks fight with rates.
  • Inside BarA candle fully within the previous candle's range — compression before expansion.
  • Institutional TraderBanks, funds, asset managers — 80–90% of volume. We track their footprints, not fight them.
  • Interest RateThe price of money, set by central banks. The gravity that reprices every asset on earth.
  • InvalidationThe price level where your trade idea is objectively WRONG — where your stop belongs.

J

  • Japanese CandlesticksThe 18th-century rice-trader charting method that became the world standard.
  • JournalYour written record of every trade: setup, screenshots, R result, emotions. The #1 improvement tool.

K

  • Key LevelA price area of major historical significance — weekly/daily zones every timeframe respects.
  • Kill ZoneThe high-probability session windows (London open, NY open) where institutional volume concentrates.
  • KYC"Know Your Customer" — identity verification required by regulated brokers and exchanges.

L

  • LeverageTrading with borrowed capital — 10× controls $10,000 with $1,000. Amplifies wins AND losses.
  • Limit Order"Fill me only at MY price or better." The professional entry tool — price comes to you.
  • LiquidationForced closure of a leveraged position when margin runs out — the crypto-perp account killer.
  • LiquidityHow easily size trades without moving price — and the resting orders themselves.
  • Liquidity PoolA cluster of resting stops/entries at an obvious level — fuel institutions hunt.
  • Liquidity SweepPrice wicks through a pool, consumes the orders, and snaps back — the trap before the real move.
  • London SessionEurope's trading hours — the day's volume ignition; famously sweeps the Asia range first.
  • LongA position profiting when price RISES. Buy low, sell high.
  • LotStandard trade size unit. Forex: 1 lot = 100,000 units; mini 10k; micro 1k.
  • Lower High (LH)A weaker bounce top — sellers stepping in earlier. Downtrend fuel; where pros short.
  • Lower Low (LL)A swing low beneath the previous one — downtrend confirmation.

M

  • MarginYour own capital locked as collateral for a leveraged position.
  • Margin CallThe broker's demand for more funds when losses eat your margin — the step before liquidation.
  • Market CapPrice × supply — the honest way to compare asset sizes. Price alone lies.
  • Market MakerFirms quoting both bid and ask, earning the spread — they need volume where stops cluster.
  • Market Order"Fill me NOW at the best available price." Instant, but pays spread and slippage.
  • MarubozuA full-body candle with no wicks — one side controlled the entire period. Maximum conviction.
  • MitigationPrice revisiting a zone and consuming its resting orders — each visit drains the battery.
  • MomentumThe speed and force of a move — big consecutive bodies = strong momentum.
  • Monetary PolicyA central bank's rate + liquidity toolkit — easing (dovish) or tightening (hawkish).
  • Moving Average (MA)The average of the last N closes drawn as a line — trend context, not an entry signal.
  • Multi-Timeframe AnalysisTop-down reading: Daily for bias, 4H for setup, 15m for the trigger.

N

  • Nasdaq 100The 100 largest US tech-heavy stocks as one index — the growth/risk-appetite thermometer.
  • New York SessionUS trading hours — overlaps London for the day's deepest liquidity; indices open 15:30 CET.
  • News TradingTrading scheduled releases directly — violent spreads and slippage; beginners stand aside.
  • NFP — Non-Farm PayrollsThe US jobs report, first Friday monthly — one of the most violent regular events.
  • NoiseMeaningless small fluctuations, especially on low timeframes — what over-zoomed beginners trade.

O

  • OCO — One Cancels OtherTwo linked orders where one filling cancels the other — powers the bracket.
  • OHLCOpen, High, Low, Close — the four prices every candle records.
  • Open InterestTotal outstanding derivative contracts — rising OI = new money fueling the move.
  • OptionsContracts giving the RIGHT (not duty) to buy/sell at a price — advanced; their hedging moves spot.
  • Order BlockThe last opposite candle before an impulsive move — the institution's refined footprint, used as an entry zone.
  • Overnight / Swap FeeInterest charged (or paid) for holding leveraged positions past the daily rollover.
  • OvertradingTaking trades outside your plan for action's sake — death by a thousand spreads.

P

  • P&LProfit & Loss. Unrealized while open ("paper"), realized once closed.
  • Perpetual (Perp)A crypto futures contract with no expiry, tethered to spot by the funding rate.
  • Pin BarA candle that's mostly wick — a violent rejection. Powerful at key zones, noise elsewhere.
  • PipThe standard forex price unit — EURUSD 1.0850 → 1.0851 = 1 pip (4th decimal).
  • PMIPurchasing Managers' Index — business sentiment; above 50 = expansion, below = contraction.
  • POC — Point of ControlThe price with the most traded volume — a magnet and a strong level.
  • PortfolioEverything you hold — positions, cash, investments — viewed as one risk unit.
  • Position Sizingsize = risk ÷ stop distance. The formula that keeps every loss survivable.
  • PPI — Producer Price IndexFactory-gate inflation — often leads CPI by months.
  • PremiumThe expensive upper half of the dealing range (above 50%) — where professionals sell.
  • Price ActionTrading from raw price movement — structure, candles, levels — no indicator crutches.
  • Prop FirmA company funding traders who pass a risk-controlled evaluation — you trade their capital for a profit split.
  • Psychological LevelRound numbers (1.1000, BTC 100k) where human orders naturally cluster.
  • PullbackA temporary counter-move within a trend — the market breathing in before the next leg.

Q

R

  • R — Risk UnitYour per-trade risk as a unit. Win 1:3 = +3R; any loss = −1R. Keeps math clean across account sizes.
  • R:R — Risk-Reward RatioPotential reward ÷ risk. MoneyCircle minimum: 1:2 — or the trade doesn't exist.
  • RallyA strong sustained rise in price.
  • RangeSideways market between defined support and resistance — no new highs or lows. Trade edges or wait.
  • RecessionA shrinking economy (two negative GDP quarters) — risk-off regime, safe havens bid.
  • ResistanceA price AREA where rising price historically finds sellers. Drawn as a zone, never a line.
  • RetestPrice returning to a broken level to confirm it from the other side — the pro breakout entry.
  • RetracementA pullback measured in Fibonacci terms — 38.2%, 50%, 61.8% of the prior move.
  • ReversalA genuine trend change — CHoCH first, then confirmed by opposite BOS.
  • Risk ManagementThe complete survival system: fixed risk %, sizing, stops, loss limits. The actual "holy grail".
  • Risk-On / Risk-OffThe market's mood: chasing growth (stocks, crypto) vs hiding in safety (gold, bonds, USD, JPY).
  • Round NumberClean price levels (00/50) that act as psychological magnets and S/R.
  • RSIRelative Strength Index — momentum oscillator 0–100. Context tool; "overbought" can stay overbought.

S

  • S&P 500The 500 largest US companies — the world's benchmark equity index.
  • Safe HavenWhere scared money hides: gold, government bonds, USD, JPY, CHF.
  • ScalpingVery short-term trading for small moves — high frequency, high skill, high cost sensitivity.
  • Sell-Side LiquidityStops and entries resting BELOW lows — the pool price runs to before reversing up.
  • SentimentThe crowd's collective mood — measured by Fear & Greed, positioning, funding rates.
  • SessionA market's active hours — Asia, London, New York. Volatility and liquidity follow the clock.
  • ShortA position profiting when price FALLS — sell first, buy back cheaper.
  • SlippageThe difference between expected and actual fill price — grows violently around news.
  • Smart MoneyInstitutional capital — needs liquidity to fill size, hence sweeps and hunts at obvious levels.
  • Spot MarketBuying/selling the actual asset for immediate delivery — no leverage, no expiry, no liquidation.
  • SpreadThe gap between bid and ask — your cost to enter any trade.
  • Stop HuntA deliberate push into a stop cluster to trigger orders — fuel for the real move.
  • Stop Loss (SL)Your pre-set maximum loss, placed at invalidation. Non-negotiable on every trade.
  • Stop Order"Trigger a market order when price crosses X" — powers stops and breakout entries.
  • StructureThe skeleton of swings (HH/HL or LH/LL) that defines trend, reversal and bias.
  • Supply ZoneThe origin area of an explosive move DOWN — unfilled institutional sell orders likely remain.
  • SupportA price AREA where falling price historically finds buyers. A zone, never a line.
  • Swing High / LowA local peak/trough with lower highs (or higher lows) on both sides — structure's building block.
  • Swing TradingHolding positions for days to weeks, riding the 4H/Daily structure.

T

  • Take Profit (TP)Your pre-set exit in profit — decided when calm, executed automatically.
  • TickThe smallest possible price increment of an instrument.
  • TiltEmotional meltdown after losses — revenge trades, doubled size. Circuit breakers exist for this.
  • Timeframe (TF)How much time one candle covers — 1m to Monthly. Higher = WHAT, lower = WHEN.
  • Top-Down AnalysisAlways analyzing from high timeframe to low — map before street before door.
  • Trading PlanYour written rules: setups, risk, sessions, review ritual. No plan = gambling.
  • TradingViewThe industry-standard charting platform — and this academy's workstation.
  • Trailing StopA stop that follows price behind new structure — locks profit while letting winners run.
  • TrendThe market's persistent direction — staircase up (HH+HL), down (LH+LL), or sideways.
  • TrendlineA line connecting swing points. Useful context — and famous engineered liquidity bait.
  • Tweezer Top / BottomTwo candles rejecting the exact same level — double rejection at an extreme.

U

  • Unemployment RateThe share of jobless workers — labor weakness moves rate expectations and markets.
  • Unrealized P&LPaper profit/loss on open positions — not yours until closed.
  • UptrendThe HH+HL staircase — each peak and each dip higher. Buy the dips, never chase the peaks.

V

  • Vector CandleHuge body, tiny wicks, high volume — institutional aggression made visible; births zones and FVGs.
  • VolatilityHow violently price moves. Opportunity and risk scale together with it.
  • VolumeHow much traded in a period — the conviction meter behind every move.
  • Volume ProfileVolume displayed BY PRICE level — reveals where the real business was done (POC, value areas).
  • VWAPVolume-Weighted Average Price — the institutional "fair price" benchmark for the session.

W

  • WalletWhere YOU hold crypto keys — "not your keys, not your coins."
  • Wave CountLabeling a chart's Elliott waves (1-5, A-B-C) — valid only while the three iron rules hold.
  • WhaleA player whose size moves markets — their footprints are the zones and sweeps you learned to read.
  • WhipsawViolent back-and-forth chops stopping out both sides — typical around news and thin liquidity.
  • Wick / ShadowThe thin lines beyond the body — prices visited but rejected. The battle, not the verdict.
  • Win RatePercentage of winning trades. Meaningless alone — a 40% win rate with 1:3 R:R prints money.

X

  • XAU / XAGThe tickers for gold (XAUUSD) and silver (XAGUSD) — metals quoted against the dollar.

Y

  • YieldThe return an asset pays (bond interest, dividend %) — rising yields compete with risk assets.
  • Yield CurveBond yields across maturities — inversion (short > long) has preceded most recessions.

Z

  • Zero-Sum GameDerivatives markets: every dollar won is a dollar lost by the counterparty. Edge decides who.
  • ZoneA price AREA (not a line) where orders cluster — how institutions and this academy think about levels.