Glossary

31 terms in plain English.

Ask

The lowest price a seller will accept.

ATR

Average True Range: the typical candle range, used for stop distance.

Bid

The highest price a buyer will pay.

BoS

Break of structure: a close beyond the previous swing in the trend direction.

ChoCh

Change of character: the first close against the prevailing trend structure.

Delta

Buy volume minus sell volume.

Drawdown

The fall of an account from its peak.

EMA

Exponential moving average, weights recent prices more.

Equity

Account value including open profit and loss.

Funding rate

Periodic payment between long and short futures traders.

FVG

Fair value gap: a three-candle imbalance that price may return to fill.

HH / HL

Higher high / higher low: the building blocks of an uptrend.

iFVG

Inverse FVG: a gap that has been closed through and may flip role.

Kill zone

The busy hours after the London or New York open.

Leverage

Using borrowed buying power to control a larger position.

Limit order

An order that fills only at the named price or better.

Liquidation

Forced closing of a leveraged position when margin runs out.

Liquidity

The ease of trading without moving price.

MACD

Moving Average Convergence Divergence: a momentum indicator.

Market order

An order that fills immediately at the best available price.

Order block

The last opposite candle before an impulsive move.

POC

Point of control: the price with the most traded volume.

R (R-multiple)

One unit of risk; a trade that makes twice its risk is +2R.

RSI

Relative Strength Index, a 0–100 momentum gauge.

Slippage

The difference between expected and actual fill price.

Spread

The gap between bid and ask.

Stop loss

An order that closes a losing trade at a set price.

Sweep

A move through a level to trigger stops before reversing.

VAH / VAL

Value area high / low: the edges of the zone containing about 70% of volume.

VWAP

Volume-weighted average price for the session.

Whale print

An unusually large single trade.