Every trading term, one page.
47+ quick, precise definitions — order types, risk and position sizing, market structure, trading styles, and crypto-specific terms. Looking for a full deep-dive with a diagram instead? Check the main Trading Glossary.
Orders & Mechanics
Market Order
An order to buy or sell immediately at the best available current price. Guarantees execution, not price — in a fast or thin market, you can pay noticeably more (or receive less) than the last quoted price.
Limit Order
An order to buy or sell only at a specific price or better. Guarantees price, not execution — if the market never reaches your limit, the order simply never fills.
Stop-Loss Order
An order that triggers a market (or limit) sell once price falls to a set level, capping how much a losing trade can cost you. It only protects the position it’s attached to — it does nothing for the rest of an account.
Take-Profit Order
An order that automatically closes a position once it reaches a target profit level, so gains get locked in without needing to watch the chart and exit manually.
Stop-Limit Order
A stop order that, once triggered, becomes a limit order instead of a market order. It avoids the worst-case slippage of a stop-market order, but carries the risk of not filling at all in a fast-moving market.
Trailing Stop
A stop-loss that automatically moves with price in your favor (by a fixed amount or percentage) but never moves against you, letting a winning trade run while still protecting gains already made.
Order Book
The live list of all open buy (bid) and sell (ask) limit orders for an asset, ranked by price. Reading its depth shows where real supply and demand are actually sitting, not just the last traded price.
Slippage
The difference between the price you expected on an order and the price you actually got, usually from a market order eating through the order book during fast moves or thin liquidity.
Risk & Position Sizing
Position Sizing
Deciding how large a trade should be based on your account size and how far your stop-loss sits from your entry, so the dollar risk on every trade stays consistent regardless of setup.
Risk-Reward Ratio
How much you stand to gain compared to how much you’re risking on a trade, expressed as a ratio (e.g. 1:3 means risking $1 to potentially make $3). A favorable ratio lets a strategy stay profitable even with a win rate below 50%.
Leverage
Borrowed exposure that lets a trader control a larger position than their actual capital would otherwise allow (e.g. 10x leverage turns $1,000 into $10,000 of exposure). It multiplies both gains and losses equally, and can wipe out an account far faster than trading without it.
Margin
The collateral you must put up to open a leveraged position. If losses shrink that collateral below a required threshold, the position gets margin-called or automatically liquidated.
Liquidation
The forced closure of a leveraged position by an exchange or broker when losses erode the margin backing it below the minimum required level, usually at a worse price than the trader would have chosen.
Drawdown
The decline from an account’s peak value to its lowest point afterward, usually shown as a percentage. It’s one of the clearest ways to judge how painful a strategy actually is to trade, beyond just its average return.
Dollar-Cost Averaging (DCA)
Buying a fixed dollar amount of an asset at regular intervals regardless of price, which averages out your entry cost over time instead of betting everything on a single entry point.
Market Structure & Liquidity
Liquidity
How easily an asset can be bought or sold without moving its price much. High liquidity means tight spreads and minimal slippage; low liquidity means even modest orders can swing the price significantly.
Bid-Ask Spread
The gap between the highest price a buyer is currently offering (bid) and the lowest price a seller will currently accept (ask). A tighter spread generally signals a more liquid, more efficiently priced market.
Market Capitalization
The total value of an asset in circulation — price multiplied by total supply (shares outstanding for a stock, circulating coins for a crypto asset). Used to compare the overall size of companies or coins, not just their per-unit price.
Bull Market
An extended period of rising prices and generally optimistic sentiment across a market or asset, typically defined as a rise of 20% or more from a recent low.
Bear Market
An extended period of falling prices and pessimistic sentiment, typically defined as a decline of 20% or more from a recent high.
Long Position
A trade that profits if the asset’s price rises — the standard "buy low, sell high" position.
Short Position
A trade that profits if the asset’s price falls, typically by borrowing and selling an asset first with the intent to buy it back later at a lower price.
Pip
The smallest standardized price move in a forex pair, usually the fourth decimal place (0.0001) for most pairs. Used to measure and compare gains, losses, and spreads in a currency-agnostic way.
Lot
A standardized trade size, most commonly used in forex, where one standard lot equals 100,000 units of the base currency (with mini and micro lots at 10,000 and 1,000 units).
Trading Styles & Behavior
Day Trading
Opening and closing all positions within the same trading day, with nothing held overnight, to avoid gap risk and capture short-term intraday moves.
Swing Trading
Holding a position for several days to a few weeks to capture a larger price "swing," a middle ground between day trading’s speed and long-term investing’s patience.
Scalping
An extremely short-term trading style aiming for small, frequent gains from tiny price movements, often holding positions for only seconds to a few minutes.
Breakout
A move where price closes decisively beyond a established support or resistance level, often on higher-than-average volume, read as the start of a new directional move.
Pullback
A short-term move against the direction of a larger trend, generally viewed as a temporary pause rather than a reversal, as long as the broader trend structure stays intact.
Consolidation
A period where price trades sideways within a defined range instead of trending, often reflecting a temporary balance between buyers and sellers before the next directional move.
Dead Cat Bounce
A short, temporary price recovery during an overall downtrend, which fails and rolls back over rather than marking a genuine reversal — the market equivalent of "even a dead cat bounces if it falls far enough."
FOMO (Fear of Missing Out)
Entering a trade impulsively, chasing a move that has already run, purely out of fear of missing further gains rather than following a planned setup — a common source of poorly timed, oversized entries.
Momentum, Volume & Volatility
Volume
The total number of shares, contracts, or coins traded in a given period. Rising price on rising volume is read as a stronger, more convincing move than the same price rise on thin, quiet volume.
VWAP (Volume-Weighted Average Price)
The average price an asset has traded at over a session, weighted by how much volume traded at each price. Institutions use it as a fairness benchmark, and many day traders treat it as intraday dynamic support or resistance.
Average True Range (ATR)
A volatility indicator measuring the average size of an asset’s price range over recent periods, commonly used to size stop-losses relative to how much an asset typically moves rather than an arbitrary fixed distance.
Stochastic Oscillator
A momentum indicator that compares a closing price to its recent trading range, plotted on a 0–100 scale, with readings above 80 read as overbought and below 20 as oversold — similar in spirit to RSI but built from a different formula, and typically faster-moving.
Read the full guideDivergence
When price and an indicator (commonly RSI or MACD) move in opposite directions — price making a new high while the indicator makes a lower high, or vice versa — often read as a sign that the current trend’s momentum is fading.
Read the full guideGolden Cross
A shorter moving average (commonly the 50-period) crossing above a longer one (commonly the 200-period), widely read as a bullish, longer-term trend signal.
Read the full guideDeath Cross
The bearish mirror of a golden cross: a shorter moving average crossing below a longer one, widely read as a bearish, longer-term trend signal.
Read the full guideAll-Time High / All-Time Low (ATH / ATL)
The highest (ATH) or lowest (ATL) price an asset has ever traded at. Particularly watched in crypto, where a fresh ATH often triggers a fresh wave of retail attention and momentum.
Crypto-Specific
Open Interest
The total number of outstanding derivative contracts (futures or options) that have not yet been closed. Rising open interest alongside a price move suggests new money is entering the trend; falling open interest suggests positions are being closed out.
Funding Rate
A periodic payment exchanged between long and short traders on a crypto perpetual futures contract, designed to keep its price anchored close to the underlying spot price. A strongly positive funding rate means longs are paying shorts, often a sign of crowded, over-leveraged bullish positioning.
HODL
Crypto slang for holding an asset long-term through volatility rather than trading in and out of it, originating from a misspelled "hold" in an early Bitcoin forum post.
Whale
A wallet or trader holding a large enough position that their buying or selling can noticeably move an asset’s price on its own, especially in lower-liquidity coins.
Short Squeeze
A sharp price spike caused by short sellers being forced to buy back an asset to close their losing positions, which adds extra buying pressure on top of whatever originally drove the move higher.
Perpetual Futures (Perps)
A crypto futures contract with no expiration date, kept in line with the spot price through the funding rate mechanism rather than settling on a fixed future date like traditional futures.