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- 52-week high / low
- The highest and lowest price an asset has traded over the past year — widely watched reference levels, and common spots for breakouts.
A
- Absorption
- When a large player quietly soaks up the orders hitting a level, so heavy volume trades but price barely moves — often right before a sharp move the other way.
- ADX (Average Directional Index)
- An indicator that measures how strong a trend is, regardless of direction, on a 0–100 scale. Readings above roughly 25–30 suggest a trend strong enough to follow.
- Anchored VWAP
- A VWAP calculated from a chosen starting point — a major high, low, or event — rather than the day's open, to measure the average price paid since that moment.
- Ask
- The lowest price a seller is currently willing to accept. Paired with the bid to form the bid–ask spread.
- Average (market average / index)
- A single number that tracks a basket of stocks — like the Dow Jones Industrial Average or the S&P 500 — used to gauge 'the market' as a whole.
B
- Bear market
- A sustained decline in prices, often defined as a drop of 20% or more from a high. Pessimism and selling dominate.
- Bid
- The highest price a buyer is currently willing to pay.
- Bid–ask spread
- The gap between the bid and the ask. A tight spread signals a liquid, actively traded market; a wide spread signals the opposite.
- Breakout
- When price moves decisively beyond a level it had struggled to cross — often a signal that one side has taken control.
- Bull flag
- A momentum continuation pattern: a sharp rally (the 'flagpole'), a brief light-volume pullback (the 'flag'), then a breakout to new highs.
- Bull market
- A sustained rise in prices. Optimism and buying dominate.
C
- Candlestick
- A chart symbol showing four prices for a period — open, high, low, close — with a thick 'body' (open to close) and thin 'wicks' (to the high and low).
- Capital
- The money you put to work in the markets. Protecting it is the first job of any trader.
- Catalyst
- A piece of news or an event — earnings, an economic report, a product launch — that moves price.
- Cup with handle
- A bullish base pattern: a rounded 'cup' that repairs a decline, a short pullback 'handle', then a breakout above the rim. Popularized by William O'Neil.
D
- Death cross
- When a shorter moving average crosses below a longer one (e.g., the 50-day below the 200-day) — a widely watched, lagging bearish signal. The opposite of a golden cross.
- Depth of market (DOM)
- A real-time view of the order book: the resting bids and offers stacked at each price, showing where supply and demand are waiting.
- Divergence
- When price and an indicator disagree — e.g., price makes a higher high while an oscillator makes a lower high — hinting that momentum is fading.
- Dividend
- A cash payment a company distributes to its shareholders, usually from profits.
- Doji
- A candlestick whose open and close are nearly equal, leaving almost no body — a sign of indecision between buyers and sellers.
- Drawdown
- The decline from a peak to a trough — in an account or in price. Managing drawdown is central to survival.
E
- Earnings
- A company's profit, reported each quarter. Earnings surprises are major catalysts for stock prices.
- Engulfing pattern
- A two-candle reversal in which one candle's body completely engulfs the prior candle's body, signalling a sudden shift in control.
- Equity
- Ownership in a company (a share of stock). Also used to mean the current value of a trading account.
- Expectancy
- The average profit or loss you can expect per trade over many trades, usually measured in R. Positive expectancy is the mathematical definition of an edge.
F
- Fundamental analysis
- Valuing an asset by studying the underlying business and economy — earnings, balance sheets, interest rates — rather than the price chart.
G
- Gap
- A jump between one period's close and the next period's open, leaving a 'hole' on the chart. Often caused by overnight news.
- Gap and go
- A momentum strategy that trades a stock gapping on news at the open, entering as it breaks the opening range in the gap's direction.
- Golden cross
- When a shorter moving average crosses above a longer one (e.g., the 50-day above the 200-day) — a widely watched, lagging bullish signal.
H
- Hammer
- A candlestick with a small body and a long lower wick: sellers pushed price down but buyers reclaimed it by the close — a potential bullish reversal at support.
- Hedge
- A position taken specifically to reduce the risk of another position, rather than to profit on its own.
L
- Leverage
- Using borrowed money (margin) to control a larger position than your cash alone would allow. It amplifies both gains and losses.
- Limit order
- An order to buy or sell at a specified price or better — you control the price, but the fill isn't guaranteed.
- Liquidity
- How easily an asset can be bought or sold without moving its price. High volume and a tight spread mean high liquidity.
- Long
- A position that profits when price rises — you buy first, hoping to sell higher.
- Low-volume node
- A price area where very little has traded. With few resting orders to slow it down, price tends to move quickly through these zones.
M
- MACD
- Moving Average Convergence Divergence — an indicator built from two moving averages and their difference (a histogram), used to read trend strength, turns, and momentum.
- Margin
- Funds borrowed from a broker to trade. Margin enables leverage and magnifies risk.
- Market capitalization (market cap)
- A company's total value: share price × number of shares outstanding.
- Market order
- An order to buy or sell immediately at the best available price — fast, but you don't control the exact fill.
- Market profile
- A way of organising a session's trading into a distribution that shows where price spent the most time — revealing value, balance, and price discovery. Created by Peter Steidlmayer.
- Mean reversion
- The tendency of price to snap back toward an average or 'fair value' after stretching too far from it — the basis of fade and range strategies.
- Morning star
- A three-candle bullish reversal: a down candle, a small indecisive candle, then a strong up candle — signalling sellers are exhausted.
- Moving average
- The average price over the last N periods, recalculated each period. It smooths out noise to reveal the trend.
O
- Order book
- The live list of all resting bids and asks at each price — the raw record of supply and demand.
- Order flow
- The live stream of actual buy and sell orders hitting the market, read through the tape and order book to gauge real-time supply, demand, and conviction.
- Oscillator
- An indicator that swings within a bounded range (like RSI, 0–100) to measure momentum and flag overbought or oversold conditions.
- Overbought / oversold
- Conditions, usually flagged by an oscillator, where price has risen or fallen a long way fast. A warning of a possible pause, not a guaranteed reversal.
P
- P/E ratio (price-to-earnings)
- Share price divided by earnings per share — a quick gauge of how expensive a stock is relative to its profits.
- Pip / point / tick
- The smallest standard price increment in a market (a 'tick' in stocks, a 'pip' in forex).
- Point of control (POC)
- In a market or volume profile, the single price where the most volume traded — the session's 'fairest' price and a frequent magnet for price.
- Portfolio
- The full collection of assets and positions you hold.
- Position sizing
- Deciding how much to risk on a single trade — arguably more important to long-run results than the entry itself.
- Position trading
- A long-term style that holds for months to years, riding primary trends and leaning on fundamentals.
- Pullback
- A temporary move against the prevailing trend — a pause that often offers a lower-risk entry in the trend's direction.
R
- R-multiple (R)
- Profit or loss measured in units of the initial risk on a trade. A trade that makes three times what you risked is a +3R win.
- Relative volume (RVOL)
- How a stock's current volume compares with its typical volume for the same time of day. High relative volume signals unusual interest and a possible catalyst.
- Relative strength (RS) rating
- A 1–99 percentile ranking of a stock's price performance (usually over 12 months) versus all other stocks — popularized by William O'Neil / IBD. An RS of 90 means it has outperformed 90% of the market. Not to be confused with the RSI oscillator.
- Relative strength line
- A line plotting the ratio of a stock's price to a benchmark index (e.g., the S&P 500). A rising line means the stock is outperforming the market; new highs in the line — especially before price — flag emerging leadership.
- Resistance
- A price level where rising prices tend to stall, because selling interest (supply) increases there.
- Risk / reward
- The ratio between what you stand to lose and what you stand to gain on a trade. Favorable risk/reward is what lets a strategy profit even with many losers.
- RSI (Relative Strength Index)
- A momentum oscillator on a 0–100 scale; readings above ~70 are often called overbought and below ~30 oversold, though both can persist in a strong trend.
S
- Scalping
- A very short-term style that takes many small profits from intraday moves, holding for seconds to minutes and finishing the day flat.
- Sector
- A group of related companies — technology, energy, financials — that often move together.
- Shooting star
- A candlestick with a small body and a long upper wick: buyers pushed price up but sellers slammed it back down — a potential bearish reversal at resistance.
- Short (short selling)
- A position that profits when price falls: you sell borrowed shares first, hoping to buy them back lower.
- Slippage
- The difference between the price you expected and the price you actually got — common in fast or illiquid markets.
- Stop-loss
- A preset order to exit a losing trade at a defined point, capping the loss. The cornerstone of risk control.
- Support
- A price level where falling prices tend to stall, because buying interest (demand) increases there.
- Swing trading
- A style that holds positions for several days to a few weeks to capture a single market 'swing' or trend leg.
T
- Tape (time & sales)
- The live feed of every executed trade — price, size, and whether it hit the bid or the offer. 'Reading the tape' gauges urgency and who is in control.
- Technical analysis
- Studying price and volume on charts to make trading decisions — reading the market's behavior rather than the underlying business.
- Trend
- The prevailing direction of price: an uptrend (higher highs and higher lows), a downtrend (lower highs and lower lows), or sideways.
V
- Value area
- In a market profile, the price range where about 70% of a session's volume traded — the zone the market accepted as fair value.
- Volatility
- How much and how fast price moves. Higher volatility means bigger swings — more opportunity and more risk.
- Volume
- The number of shares or contracts traded in a period. Rising volume in a trend's direction helps confirm it.
- VWAP (volume-weighted average price)
- The average price over a period weighted by volume — a benchmark for the 'fair' intraday price that institutions watch closely.
W
- Wick (shadow)
- The thin lines above and below a candlestick's body, marking the highest and lowest prices reached in the period.
Y
- Yield
- The income an asset pays as a percentage of its price — such as a stock's dividend yield or a bond's yield.
More terms added regularly. Missing one you'd like explained? It probably belongs here.