Trading Terminology Glossary
Reference this page whenever you encounter an unfamiliar term. Bookmark it.
Market Basics
| Term | Definition | |------|-----------| | Bull / Bullish | Expecting price to go up | | Bear / Bearish | Expecting price to go down | | Long | Buying an asset to profit from price increase | | Short | Selling (borrowed) an asset to profit from price decrease | | Bid | Highest price a buyer is willing to pay | | Ask | Lowest price a seller is willing to accept | | Spread | Difference between bid and ask | | Liquidity | How easily an asset can be bought/sold without moving price | | Slippage | Difference between expected fill price and actual fill price | | Volume | Number of units traded in a period |
Chart & Technical Terms
| Term | Definition | |------|-----------| | Candlestick | A chart element showing open, high, low, close for a period | | Wick / Shadow | The thin lines above/below the candle body | | Support | A price level where buying pressure tends to emerge | | Resistance | A price level where selling pressure tends to emerge | | Breakout | Price moving above resistance or below support | | Fakeout | A false breakout that reverses quickly | | HH / HL | Higher High / Higher Low (uptrend structure) | | LH / LL | Lower High / Lower Low (downtrend structure) | | BOS | Break of Structure | | CHoCH | Change of Character (trend reversal signal) |
Order & Execution Terms
| Term | Definition | |------|-----------| | Market Order | Buy/sell immediately at current price | | Limit Order | Buy/sell at a specific price or better | | Stop Loss | An order to exit a losing position at a set price | | Take Profit | An order to exit a winning position at a set price | | Fill | When your order gets executed | | Leverage | Using borrowed funds to increase position size | | Margin | The collateral required to open a leveraged position | | Liquidation | Forced closure of a position when margin is insufficient |
Risk & Performance Terms
| Term | Definition | |------|-----------| | R:R (Risk-Reward) | Ratio of potential loss to potential profit | | Win Rate | Percentage of trades that are profitable | | Drawdown | Peak-to-trough decline in account value | | P&L | Profit and Loss | | ROI | Return on Investment | | Position Size | How much capital you allocate to one trade | | Risk % | Percentage of account risked per trade (usually 1-2%) |
Crypto-Specific Terms
| Term | Definition | |------|-----------| | Perpetual (Perp) | A futures contract with no expiry date | | Funding Rate | Periodic payment between longs and shorts | | DEX | Decentralized Exchange | | CEX | Centralized Exchange | | Gas Fee | Transaction fee on a blockchain | | Whale | A trader with a very large position | | HODL | Hold On for Dear Life (long-term holding) |