Beginner Day Trading Glossary
A quick-reference guide for common terms every new trader needs to know. Organized from A–Z for easy searching.
A
Ask Price — The lowest price a seller is willing to accept for a security right now.
Account Size — The total amount of money in your trading account.
ATR (Average True Range) — A volatility indicator that measures how much price moves on average.
B
Bear Market — A market where prices are generally falling.
Bid Price — The highest price a buyer is willing to pay right now.
Break-Even Point — The price at which a trade makes zero profit and zero loss.
Breakout — When price moves beyond a support or resistance level with strong momentum.
Bull Market — A market where prices are generally rising.
C
Candlestick — A type of chart that shows open, high, low, and close prices for a set period.
Chart Pattern — A visual shape in price data that traders believe can predict future moves (e.g., head and shoulders, double top).
Confluence — When multiple signals or indicators point in the same direction.
Crypto — Short for cryptocurrency, digital assets like Bitcoin or Ethereum.
D
Day Trading — Buying and selling within the same trading day.
Drawdown — How much your account balance drops from its peak before recovering.
Dynamic Support/Resistance — Levels that change over time, like moving averages.
E
Edge — A repeatable condition that gives you a probability advantage over time.
Entry Price — The price you pay when opening a position.
Equity — The total value of your account, including open trades.
Expectancy — The average amount you make per trade, calculated as (Win% × Avg Win) – (Loss% × Avg Loss).
F
Fill Price — The actual price where your order is executed.
Forex (Foreign Exchange) — The market for trading currencies.
FOMO (Fear of Missing Out) — Entering trades late because you’re afraid of missing a move.
G
Gap — When price jumps between two periods with no trading in between.
Green Day — A day where your account ends with a profit.
H
High of Day (HOD) — The highest price a symbol reaches during the session.
Higher High (HH) — A price peak that’s higher than the previous peak.
Higher Low (HL) — A price low that’s higher than the previous low.
I
Indicator — A tool on a chart that uses price/volume data to help you make decisions (e.g., RSI, MACD, moving averages).
Inside Bar — A candle pattern where the entire candle is within the range of the previous candle.
J
Journal — A record of all your trades, setups, and performance for review and improvement.
K
Key Level — A price area where the market has reacted multiple times (support/resistance).
L
Liquidity — How easily you can buy or sell without moving the price too much.
Loss Aversion — The tendency to avoid taking losses even when it’s the smart move.
Lot — A standardized trading size in forex (e.g., 100,000 units for a standard lot).
M
MACD (Moving Average Convergence Divergence) — An indicator showing momentum changes.
Margin — Borrowed money from your broker to trade larger positions.
Market Order — An order that executes immediately at the best available price.
Max Drawdown — The largest loss from peak to trough before recovery.
Moving Average (MA) — An indicator that smooths price over a set period.
O
OCO (One Cancels Other) — Two linked orders; when one executes, the other cancels.
Open Position — A trade that is currently active in the market.
Order Book — A list of buy and sell orders for a particular asset.
P
Paper Trading — Practicing trades with fake money using real market data.
Partial Profit — Closing part of a position to lock in gains while letting the rest run.
Pattern Day Trader Rule (PDT) — U.S. rule requiring $25,000 to make more than 3 day trades in 5 days.
Pip — A standard unit of movement in forex, usually 0.0001 for most pairs.
Position Size — How many units, shares, or contracts you buy or sell in a trade.
Price Action — Trading decisions based on raw price movement rather than indicators.
Q
Quote — The latest market price for a security or asset.
R
Range — When price moves sideways between support and resistance.
Red Day — A day where your account ends with a loss.
Resistance — A price zone where selling pressure often stops upward moves.
Reward-to-Risk Ratio (R:R) — How much you stand to make compared to what you risk.
Risk Per Trade (RPT) — The % of your account you’re willing to lose on a single trade.
RSI (Relative Strength Index) — An indicator that measures momentum.
S
Scalping — A very short-term trading style aiming for small quick profits.
Setup — A specific condition or pattern that signals a potential trade.
Slippage — When your trade is filled at a worse price than expected.
Spread — The difference between the bid and ask prices.
Stop-Loss — An order to exit a trade at a set price to limit losses.
Support — A price zone where buying pressure often stops downward moves.
Swing Trading — Holding positions for days or weeks, not minutes or hours.
Sunk Cost Fallacy — Continuing a trade because you’ve already invested time or money, even if it’s losing.
T
Take-Profit (TP) — An order to close a trade at a set profit level.
Tick — The smallest price movement possible in a market.
Trend — The general direction of price movement over time.
U
Unrealized P/L — Current profit or loss on open trades that haven’t been closed yet.
V
Volatility — How much price moves over a certain time period.
Volume — How many units or shares are traded in a given period.
W
Watchlist — A list of symbols you monitor for trading opportunities.
Win Rate — The percentage of your trades that are profitable.
Z
Zone — A broad price area (support/resistance) where reactions often happen.
