Encyclopedia

Every trading term, in plain words.

668 terms, each with what it means in one line. The full entries, with formulas, worked examples and the courses, are inside AlsaTitan.

Open the full Encyclopedia

Indicators

RSI, MACD, moving averages, volatility bands, volume and breadth tools.

Accelerator Oscillator (AC): Bill Williams' histogram of the Awesome Oscillator minus its own 5-period moving average, which measures whether momentum is speeding up or slowing down.
Accumulation / Distribution Line (A/D): Marc Chaikin's cumulative volume line that weights each bar's volume by where the close falls within the bar's high-low range.
Advance-Decline Line (A/D Line): Running total of the daily number of advancing stocks minus declining stocks on an exchange, which shows how broadly a market move is shared.
Anchored VWAP (AVWAP): Volume weighted average price calculated from a chosen starting bar, such as an earnings day or a major high or low, instead of from the session open.
Andrews' Pitchfork: Trend channel drawn from three pivot points: a median line from the first pivot through the midpoint of the next two, with parallel lines through those two pivots.
Arms Index (TRIN): Richard Arms' market breadth ratio that divides the ratio of advancing to declining stocks by the ratio of advancing to declining volume.
Arnaud Legoux Moving Average (ALMA): Moving average that weights prices along a bell-shaped (Gaussian) curve whose peak can be shifted toward recent bars, aiming for both smoothness and low lag.
Aroon Indicator: Tushar Chande's pair of lines, Aroon Up and Aroon Down, that measure how many bars have passed since the highest high and the lowest low of the lookback window.
Aroon Oscillator: Aroon Up minus Aroon Down: a single line between -100 and +100 that shows whether the latest high or the latest low of the lookback window is more recent.
Average Directional Index (ADX): J. Welles Wilder's 0 to 100 indicator of trend strength, built from the directional indicators DI+ and DI-, that measures how strongly price trends but not in which direction.
Average True Range (ATR): J. Welles Wilder's volatility indicator: the average of the true range over the last N bars, 14 by default, showing how much price typically moves per bar.
Awesome Oscillator (AO): Bill Williams' momentum histogram: a 5-period simple moving average of bar midpoints minus a 34-period simple moving average of bar midpoints.
Bollinger %B: Indicator that shows where price sits relative to the Bollinger Bands, with 0 at the lower band, 1 at the upper band and 0.5 at the middle.
Bollinger Bands: John Bollinger's volatility bands: a 20-period simple moving average with bands two standard deviations above and below it.
Bollinger BandWidth: Width of the Bollinger Bands divided by the middle band, a pure measure of how volatile price has been relative to its level.
Camarilla Pivots: Pivot-point variant that sets four resistance and four support levels around the prior close using fixed fractions of the prior day's range.
Chaikin Money Flow (CMF): Marc Chaikin's oscillator that sums money flow volume over 20 periods and divides it by total volume, giving a reading between -1 and +1.
Chaikin Oscillator: Marc Chaikin's momentum indicator for money flow: the 3-period EMA of the Accumulation/Distribution Line minus its 10-period EMA.
Chikou Span (Lagging Line): Ichimoku's lagging line: the current close plotted 26 periods back, used to compare today's price with price 26 bars ago.
Choppiness Index: E.W. Dreiss's 0 to 100 indicator that shows whether a market is trending or moving sideways, without saying in which direction.
Commodity Channel Index (CCI): Donald Lambert's unbounded oscillator that measures how far the typical price is from its moving average, scaled by its mean deviation.
Coppock Curve: Edwin Coppock's long-term momentum indicator, a weighted average of two rates of change on monthly data, designed to signal major bottoms in stock indices.
Death Cross: Bearish signal that occurs when a shorter moving average crosses below a longer one, classically the 50-day below the 200-day.
DeMark Pivots: Tom DeMark's pivot levels, whose formula depends on whether the prior period closed above, below or at its open.
Detrended Price Oscillator (DPO): Oscillator that removes the trend from price by comparing a past price with a moving average, so that shorter cycles stand out.
Directional Indicator + (DI+): Line in Wilder's Directional Movement System that measures the strength of upward price movement relative to the average true range.
Directional Indicator − (DI−): Line in Wilder's Directional Movement System that measures the strength of downward price movement relative to the average true range.
Divergence: Disagreement between price and an indicator, such as price making a new high while the oscillator makes a lower high, which suggests the move is losing momentum.
Donchian Channels: Channel formed by the highest high and the lowest low of the last N periods, with an optional middle line halfway between them.
Double Exponential Moving Average (DEMA): Moving average that cuts the lag of an EMA by doubling the EMA and subtracting an EMA of that EMA.
Ease of Movement (EOM): Richard Arms' indicator that relates a bar's price change to its volume and range, showing how easily price is moving.
Elder Impulse System: Alexander Elder's bar-coloring system that marks each bar green, red or blue depending on whether the 13-period EMA and the MACD histogram are both rising, both falling, or mixed.
Elliott Corrective Wave: Move against the larger trend in Elliott Wave theory, usually in three waves labeled A, B and C, that follows an impulse.
Elliott Impulse Wave: Five-wave move in the direction of the larger trend in Elliott Wave theory, made of three driving waves (1, 3, 5) and two corrective waves (2, 4).
Elliott Wave Theory: Ralph Nelson Elliott's theory that market prices move in repeating wave patterns: five waves with the main trend followed by three waves against it.
Exponential Moving Average (EMA): Moving average that weights recent prices more heavily than older ones, so it reacts faster to new moves than a simple moving average of the same length.
Fear & Greed Index: CNN Business's 0 to 100 composite sentiment index that combines seven market indicators to gauge whether fear or greed is driving US stocks.
Fibonacci Arc: Curved lines drawn around the end of a price swing at Fibonacci fractions of the swing's length, used to mark support or resistance that shifts with time.
Fibonacci Extension: Price levels beyond the end of a swing, at Fibonacci multiples such as 127.2%, 161.8%, 200% and 261.8%, used to project targets.
Fibonacci Fan: Set of diagonal lines drawn from a swing low or high through points at Fibonacci retracement levels, used as sloping support and resistance.
Fibonacci Retracement: Horizontal levels at Fibonacci ratios of a prior price swing, usually 23.6%, 38.2%, 50%, 61.8% and 78.6%, used to find where a pullback may end.
Fibonacci Time Zones: Vertical lines placed at Fibonacci-number intervals (1, 2, 3, 5, 8, 13, 21, 34 bars and so on) after a major high or low, marking times when a turn may occur.
Fisher Transform: John Ehlers' indicator that rescales price to between -1 and +1 and applies the Fisher transform, producing a near-Gaussian line with sharp, clear turning points.
Force Index: Alexander Elder's oscillator that multiplies the price change from the prior close by volume, measuring the force behind each move.
Gann Fan: Set of diagonal lines drawn from a major high or low at W.D. Gann's angles, which relate units of price to units of time.
Gann Lines: Individual trend lines drawn from a major pivot at one of W.D. Gann's price-to-time angles, most importantly the 1×1 line.
Gann Square: Family of W.D. Gann's grid and spiral tools, best known as the Square of Nine, used to project price and time targets from a major pivot.
Golden Cross: Bullish signal that occurs when a shorter moving average crosses above a longer one, classically the 50-day above the 200-day.
Hidden Divergence: Divergence between price and an oscillator that points to trend continuation: in an uptrend price makes a higher low while the oscillator makes a lower low.
Historical Volatility (HV): Annualized standard deviation of an asset's past returns over a set window, showing how much its price has actually moved.
Hull Moving Average (HMA): Alan Hull's moving average, built from weighted moving averages and smoothed over the square root of the period, that stays smooth while lagging far less than an EMA.
Ichimoku Cloud (Ichimoku Kinko Hyo): Japanese charting system of five lines, including a shaded cloud, that shows trend, momentum and support and resistance on one chart.
Implied Volatility (IV): The volatility, stated as an annual percentage, that makes an option-pricing model match an option's market price, read as the market's estimate of future movement.
Implied Volatility Rank (IV Rank): Measure of where current implied volatility sits within its range over the past year, from 0 at the 52-week low to 100 at the 52-week high.
IV Percentile: Percentage of trading days over the past year on which implied volatility was lower than it is today.
Kaufman Adaptive Moving Average (KAMA): Perry Kaufman's moving average that speeds up when price trends efficiently and slows down when price chops, using an efficiency ratio.
Keltner Channels: Volatility channel made of an exponential moving average with bands set a multiple of the average true range above and below it.
Kijun-sen (Base Line): Ichimoku's base line: the midpoint of the highest high and lowest low of the last 26 periods.
Klinger Volume Oscillator (KVO): Stephen Klinger's volume oscillator: the difference between a 34-period and a 55-period EMA of volume force, with a 13-period signal line.
Know Sure Thing (KST): Martin Pring's momentum oscillator that adds four smoothed rates of change over different lookbacks, weighted toward the longest.
MACD (Moving Average Convergence Divergence): Trend-following momentum indicator that plots the gap between a 12-period and a 26-period EMA, with a 9-period EMA of that gap as a signal line.
MACD Histogram: Bar chart of the MACD line minus its signal line, showing whether MACD momentum is accelerating or slowing.
Market Profile: J. Peter Steidlmayer's chart that shows where price traded during each time period of a session, stacking letters at each price into a distribution.
McClellan Oscillator: Market breadth oscillator equal to the 19-day exponential moving average of net advances minus the 39-day exponential moving average.
McClellan Summation Index: Running total of the daily McClellan Oscillator values, used as a longer-term gauge of stock market breadth.
Momentum: Indicator that shows how much price has changed over the last N periods, calculated as today's price minus the price N periods ago.
Money Flow Index (MFI): Momentum oscillator, scaled 0 to 100, that works like RSI but weights each bar's price change by its volume.
Negative Volume Index (NVI): Cumulative index that changes only on days when volume falls from the previous day, based on the idea that informed investors trade on quiet days.
Normalised ATR (NATR): Average true range divided by the closing price and multiplied by 100, which expresses volatility as a percentage of price.
On-Balance Volume (OBV): Joseph Granville's running total of volume that adds a day's volume when the close is up and subtracts it when the close is down.
Overbought / Oversold: Labels for an oscillator reading near the top or bottom of its usual range, such as RSI above 70 or below 30, after price has moved far and fast in one direction.
Parabolic SAR (Stop and Reverse): J. Welles Wilder's trailing stop plotted as dots below price in an uptrend and above it in a downtrend, which flips to the other side when price touches it.
Pivot Points (Classic / Floor Pivots): Support and resistance levels calculated from the prior period's high, low and close, used as reference levels for the current session.
Point of Control (POC): Price level with the highest traded volume, or the most time spent, in a volume or market profile for a given period.
Polarity (Support–Resistance Flip): Principle that support, once broken, tends to act as resistance, and resistance, once broken, tends to act as support.
Positive Volume Index (PVI): Cumulative index that changes only on days when volume rises from the previous day, tracking price action on busy, crowd-driven days.
Price Channel: Pair of parallel lines, a trend line plus a line drawn parallel to it through the opposite swings, that contains price as it trends or ranges.
Price Volume Trend (PVT): Cumulative volume indicator that adds each day's volume multiplied by that day's percentage price change.
Put/Call Ratio: Number of put options traded divided by the number of call options traded over a period, used as a contrarian gauge of market sentiment.
Rate of Change (ROC): Momentum indicator that shows the percentage change in price between the current bar and the bar N periods ago.
Relative Strength Index (RSI): Momentum oscillator, scaled 0 to 100, that compares the size of recent gains with the size of recent losses, usually over 14 periods.
Relative Volume (RVOL): Ratio of an instrument's current volume to its normal volume for the same period, showing how unusually active it is.
Resistance: Price level or zone where selling has been strong enough to stop rallies, so traders expect price to pause or turn down there again.
Senkou Span A: Ichimoku's first leading span: the average of Tenkan-sen and Kijun-sen, plotted 26 periods ahead to form one edge of the cloud.
Senkou Span B: Ichimoku's second leading span: the midpoint of the highest high and lowest low of the last 52 periods, plotted 26 periods ahead.
Simple Moving Average (SMA): Average of the last N closing prices, with every bar weighted equally, recalculated each bar to show the underlying trend.
Squeeze (Bollinger / TTM): Period of unusually low volatility, identified when Bollinger Bands narrow to a multi-month low or move inside the Keltner Channels, that often comes before a large move.
Standard Deviation: Statistical measure of how widely values spread around their average, used in trading as a measure of volatility.
Stochastic Oscillator: George Lane's momentum oscillator, scaled 0 to 100, that shows where the close sits within the high-low range of the last N periods.
Stochastic RSI: Oscillator that applies the stochastic formula to RSI values instead of price, showing where RSI sits within its own recent range.
Supertrend: Trend-following line drawn a multiple of the average true range away from price, below it in an uptrend and above it in a downtrend, that flips when price closes through it.
Support: Price level or zone where buying has been strong enough to stop declines, so traders expect price to pause or bounce there again.
Tenkan-sen (Conversion Line): Fastest line of the Ichimoku system: the midpoint of the highest high and lowest low of the last 9 periods.
Time Weighted Average Price (TWAP): Average price over a period with every time interval weighted equally, used mainly as a benchmark and execution algorithm for large orders.
Trend Line: Straight line drawn through two or more swing lows in an uptrend, or swing highs in a downtrend, to show the trend's slope and where price may find support or resistance.
Triple Exponential Moving Average (TEMA): Moving average that reduces lag further than DEMA by combining an EMA, an EMA of that EMA and a triple-smoothed EMA.
TRIX: Oscillator that shows the one-bar percentage rate of change of a triple-smoothed exponential moving average of price.
True Strength Index (TSI): William Blau's momentum oscillator that double-smooths price changes with EMAs and divides by the double-smoothed absolute changes, giving a line between -100 and +100.
Ultimate Oscillator: Larry Williams' oscillator that blends buying pressure over 7, 14 and 28 periods into one reading between 0 and 100.
Value Area (VA): Price range where about 70% of a period's volume, or time, traded, bounded by the value area high (VAH) and the value area low (VAL).
VIX (Volatility Index): Cboe index of the 30-day implied volatility of S&P 500 options, widely used as a gauge of expected stock market volatility and fear.
Volume: Number of shares, contracts or units traded during a period, the basic measure of how much participation is behind a price move.
Volume Profile: Horizontal histogram that shows how much volume traded at each price level over a chosen period, rather than over time.
Volume Weighted Average Price (VWAP): Average price of all trades in a session, weighted by the volume traded at each price, which resets at the start of each session.
Vortex Indicator (VI): Pair of lines, VI+ and VI-, that compare upward and downward price movement with the true range to identify the start of a trend and its direction.
VVIX (VIX of VIX): Cboe index of the 30-day implied volatility of VIX options, measuring how much the market expects the VIX itself to move.
Weighted Moving Average (WMA): Moving average that multiplies each price by a weight that falls in a straight line with age, so the newest bar counts most and the oldest least.
Williams %R: Larry Williams' momentum oscillator, scaled 0 to -100, that shows how far the close sits below the highest high of the lookback period.
Woodie's Pivots: Pivot-point variant that gives the prior close twice the weight of the high and low when calculating the central pivot.
ZigZag Indicator: Chart overlay that connects swing highs and lows and ignores any price move smaller than a set threshold, such as 5%.

Candlesticks

One-, two- and three-candle reversal and continuation signals.

Abandoned Baby: An abandoned baby is a rare three-candle reversal in which a doji gaps away from the candles on both sides, with no overlap even between the wicks.
Bearish Engulfing: A bearish engulfing is a two-candle reversal pattern in which a bullish candle is followed by a bearish candle whose body completely covers the first candle's body.
Bearish Kicker: A bearish kicker is a two-candle reversal in which a bullish candle is followed by a bearish candle that gaps down to open at or below the first candle's open.
Belt Hold: A belt hold is a long candle that opens at one extreme of its range, with no wick on that side, and runs strongly the other way, often marking a reversal.
Bullish Engulfing: A bullish engulfing is a two-candle reversal pattern in which a bearish candle is followed by a bullish candle whose body completely covers the first candle's body.
Bullish Kicker: A bullish kicker is a two-candle reversal in which a bearish candle is followed by a bullish candle that gaps up to open at or above the first candle's open.
Candlestick: A candlestick is a price bar that shows the open, high, low and close of one period, with a thick body between open and close and thin wicks out to the high and low.
Dark Cloud Cover: Dark cloud cover is a two-candle bearish reversal in which a long bullish candle is followed by a bearish candle that opens higher and closes below the midpoint of the first candle's body.
Doji: A doji is a candle whose open and close are equal or nearly equal, leaving almost no body and showing that buyers and sellers ended the period in balance.
Downside Tasuki Gap: A downside tasuki gap is a three-candle bearish continuation: two red candles separated by a gap down, then a green candle that closes inside the gap without filling it.
Dragonfly Doji: A dragonfly doji is a doji whose open, close and high sit at or near the top of the range, with a long lower wick and little or no upper wick.
Evening Doji Star: An evening doji star is an evening star whose middle candle is a doji, a three-candle bearish reversal that shows complete indecision at the high.
Evening Star: An evening star is a three-candle bearish reversal: a long bullish candle, a small-bodied candle that gaps higher, then a long bearish candle closing well into the first candle's body.
Falling Three Methods: Falling three methods is a five-candle bearish continuation pattern in which small candles rise inside a long red candle's range before another long red candle closes at a new low.
Four-Price Doji: A four-price doji is a candle in which the open, high, low and close are all the same price, so it is drawn as a single short horizontal line.
Gravestone Doji: A gravestone doji is a doji whose open, close and low sit at or near the bottom of the range, with a long upper wick and little or no lower wick.
Hammer: A hammer is a single-candle bullish reversal signal that forms after a decline, with a small body near the top of the range and a lower wick at least twice the body's length.
Hanging Man: A hanging man is a bearish warning candle with the same shape as a hammer, a small body at the top and a long lower wick, that appears after an advance.
Harami: A harami is a two-candle pattern in which a small body sits entirely within the body of the large candle before it, signaling that the prior trend has lost momentum.
Harami Cross: A harami cross is a harami in which the second candle is a doji sitting within the body of the long candle before it.
Heikin-Ashi: Heikin-Ashi is a candlestick chart type that plots averaged open, high, low and close values instead of actual prices, smoothing the chart so trends stand out.
High Wave Candle: A high-wave candle has a very small body and very long upper and lower wicks, a more extreme spinning top that shows a market losing its sense of direction.
Inside Bar: An inside bar is a candle whose high is below and whose low is above the previous candle's high and low, so its whole range fits inside the bar before it.
Inverted Hammer: An inverted hammer is a possible bullish reversal candle that forms after a decline, with a small body near the low of the range and a long upper wick.
Kagi Charts: A Kagi chart is a time-independent line chart that changes direction only when price reverses by a set amount, with line thickness showing whether demand or supply is in control.
Long Black (Bearish) Candle: A long black candle is a bearish candle whose body is much larger than recent candles' bodies, with small wicks, showing strong selling from open to close.
Long White (Bullish) Candle: A long white candle is a bullish candle whose body is much larger than recent candles' bodies, with small wicks, showing strong buying from open to close.
Long-Legged Doji: A long-legged doji is a doji with long upper and lower wicks, showing that price swung widely in both directions but closed back near the open.
Marubozu: A marubozu is a candle with a full body and no wicks, meaning it opened at one extreme of its range and closed at the other.
Mat Hold: A mat hold is a five-candle bullish continuation pattern: a long green candle, a small candle that gaps up, a short shallow pullback, then a long green candle closing at a new high.
Matching High: A matching high is a two-candle bearish pattern in an uptrend in which two green candles close at the same price, marking a possible short-term ceiling.
Matching Low: A matching low is a two-candle bullish pattern in a downtrend in which two red candles close at the same price, marking a possible short-term floor.
Morning Doji Star: A morning doji star is a morning star whose middle candle is a doji, a three-candle bullish reversal that shows complete indecision at the low.
Morning Star: A morning star is a three-candle bullish reversal: a long bearish candle, a small-bodied candle that gaps lower, then a long bullish candle closing well into the first candle's body.
Piercing Line: A piercing line is a two-candle bullish reversal in which a long bearish candle is followed by a bullish candle that opens lower and closes above the midpoint of the first candle's body.
Renko Charts: A Renko chart plots fixed-size bricks that are added only when price moves a set amount, ignoring time and small fluctuations.
Rising Three Methods: Rising three methods is a five-candle bullish continuation pattern in which small candles pull back inside a long green candle's range before another long green candle closes at a new high.
Shooting Star: A shooting star is a bearish reversal candle that forms after an advance, with a small body near the low of the range and a long upper wick at least twice the body.
Spinning Top: A spinning top is a candle with a small body and upper and lower wicks that are each longer than the body, showing indecision between buyers and sellers.
Stick Sandwich: A stick sandwich is a three-candle pattern in which two red candles with equal closes surround a green candle, read as a sign of support at the shared close.
Takuri Line: A takuri line is a hammer-like candle with a very small body at the top of its range and a lower wick at least three times the body, appearing after a decline.
Three Black Crows: Three black crows is a bearish pattern of three consecutive long red candles, each opening within the prior body and closing near its low at a new closing low.
Three Inside Down: Three inside down is a three-candle bearish reversal: a bearish harami followed by a third candle that closes below the first candle's open.
Three Inside Up: Three inside up is a three-candle bullish reversal: a bullish harami followed by a third candle that closes above the first candle's open.
Three Outside Down: Three outside down is a three-candle bearish reversal: a bearish engulfing pattern followed by a third candle that closes lower than the engulfing candle.
Three Outside Up: Three outside up is a three-candle bullish reversal: a bullish engulfing pattern followed by a third candle that closes higher than the engulfing candle.
Three White Soldiers: Three white soldiers is a bullish pattern of three consecutive long green candles, each opening within the prior body and closing near its high at a new closing high.
Tweezer Bottom: A tweezer bottom is a bullish reversal formation in which two or more candles, usually consecutive, make nearly identical lows after a decline.
Tweezer Top: A tweezer top is a bearish reversal formation in which two or more candles, usually consecutive, make nearly identical highs after an advance.
Upside Gap Three Methods: Upside gap three methods is a three-candle bullish continuation: two long green candles separated by a gap up, then a red candle that closes the gap.
Upside Tasuki Gap: An upside tasuki gap is a three-candle bullish continuation: two green candles separated by a gap up, then a red candle that closes inside the gap without filling it.

Patterns

Head and shoulders, triangles, flags, wedges, breakouts and ranges.

Ascending Triangle: An ascending triangle is a pattern with flat resistance across the top and rising support underneath, usually resolved by an upside breakout.
Bear Flag: A bear flag is a bearish continuation pattern: a sharp drop, the flagpole, followed by a short, orderly bounce in a small channel that slopes up or sideways.
Bear Pennant: A bear pennant is a bearish continuation pattern: a sharp drop followed by a small, converging consolidation that breaks out downward.
Blow-off Top: A blow-off top is a climactic, near-vertical price surge on extreme volume at the end of a long advance, typically followed by a sharp reversal.
Breakaway Gap: A breakaway gap is a gap that carries price out of a trading range or chart pattern, often on heavy volume, and marks the start of a new move.
Breakout: A breakout is a move in which price closes beyond a clear support or resistance level, such as a range boundary or pattern line, that had contained it.
Broadening Formation (Megaphone): A broadening formation is a pattern of higher highs and lower lows whose trendlines diverge, so the price swings get wider over time like a megaphone.
Bull Flag: A bull flag is a bullish continuation pattern: a sharp rise, the flagpole, followed by a short, orderly pullback in a small channel that slopes down or sideways.
Bull Pennant: A bull pennant is a bullish continuation pattern: a sharp rise followed by a small, converging consolidation that breaks out upward.
Capitulation: Capitulation is a burst of panic selling on very heavy volume in which remaining holders give up at once, often marking the end of a decline.
Cup and Handle: A cup and handle is a bullish continuation pattern: a rounded, U-shaped base followed by a short, shallow pullback near its right rim, before a breakout to new highs.
Descending Triangle: A descending triangle is a pattern with flat support along the bottom and falling resistance above, usually resolved by a downside break.
Diamond Top: A diamond top is a rare bearish reversal pattern in which price swings first widen and then narrow, so the trendlines around them form a diamond shape.
Double Bottom: A double bottom is a bullish reversal pattern in which price falls to about the same low twice, with a rally between, forming a W shape.
Double Top: A double top is a bearish reversal pattern in which price peaks twice at about the same level, with a pullback between, forming an M shape.
Exhaustion Gap: An exhaustion gap is a gap in the direction of a long, extended trend that comes near its end and is usually filled soon after, signaling that the move is spent.
Falling Wedge: A falling wedge is a pattern in which price falls between two downward-sloping, converging trendlines, the upper one steeper than the lower, and it usually breaks upward.
False Breakout: A false breakout is a move through support or resistance that fails to hold, with price quickly returning inside the prior range or pattern.
Flat Base: A flat base is a tight sideways consolidation lasting at least five weeks, with a decline of no more than about 10 to 15 percent, that often forms after a stock's earlier breakout.
Gap: A gap is an empty space on a price chart where no trading took place, created when a bar's range sits entirely above or below the previous bar's range.
Head and Shoulders: Head and shoulders is a bearish reversal pattern of three peaks, a middle head above two lower shoulders, with a neckline joining the lows between them.
Inverse Head and Shoulders: An inverse head and shoulders is a bullish reversal pattern of three troughs, a middle head below two higher shoulders, with a neckline joining the highs between them.
Inverted Cup and Handle: An inverted cup and handle is a bearish pattern: an upside-down rounded top followed by a short, shallow bounce near its right rim, before a break to new lows.
Island Reversal: An island reversal is a group of bars isolated from the surrounding price action by a gap on one side and a gap in the opposite direction on the other.
Pennant: A pennant is a continuation pattern in which a sharp move, the flagpole, is followed by a small symmetrical triangle of converging trendlines before the trend resumes.
Rectangle (Trading Range): A rectangle is a chart pattern in which price moves sideways between two parallel horizontal lines, support below and resistance above, until it breaks out.
Rising Wedge: A rising wedge is a pattern in which price climbs between two upward-sloping, converging trendlines, the lower one steeper than the upper, and it usually breaks downward.
Rounded Bottom (Saucer Bottom): A rounded bottom is a slow bullish reversal pattern in which a decline gradually flattens and curves into an advance, tracing a bowl or saucer shape.
Rounded Top (Saucer Top): A rounded top is a slow bearish reversal pattern in which an advance gradually flattens and curls over into a decline, tracing an upside-down bowl.
Runaway Gap (Measuring Gap): A runaway gap, also called a measuring gap, is a gap in the middle of an established trend that shows the move accelerating as latecomers rush in.
Symmetrical Triangle: A symmetrical triangle is a consolidation pattern of lower highs and higher lows whose two trendlines converge toward a point, the apex.
Trading Range: A trading range is a period in which price moves sideways between a fairly steady support level below and resistance level above, without trending.
Triple Bottom: A triple bottom is a bullish reversal pattern in which price holds three times near the same support level, then breaks above the highs between the lows.
Triple Top: A triple top is a bearish reversal pattern in which price fails three times near the same resistance level, then breaks below the lows between the peaks.
V-Bottom: A V-bottom is a sharp reversal in which a steep decline turns into an equally steep rally with little or no basing, leaving a V shape on the chart.
V-Top: A V-top is a sharp reversal in which a steep advance turns into an equally steep decline with no topping period, leaving an inverted V on the chart.
Volatility Contraction Pattern (VCP): The Volatility Contraction Pattern (VCP) is Mark Minervini's base pattern in which each successive pullback is smaller than the last while volume dries up, before a breakout.

Orders

Market, limit, stop, OCO and bracket orders, and how they fill.

AON (All or None): An order instruction that allows the order to fill only for its entire quantity, with no partial fills, though it may wait to do so.
Bracket Order: An entry order sent together with a profit-target order and a stop-loss order that become active as an OCO pair once the entry fills.
Conditional Order: An order held until a condition you define, such as a price in another instrument, a time or an earlier fill, is met, and then sent to the market.
Day Order: An order that expires automatically if it has not filled by the end of the trading session in which it was placed.
FOK (Fill or Kill): A time-in-force instruction that requires the whole order to fill immediately at the limit price or better, or else cancels it entirely.
GTC (Good Till Cancelled): A time-in-force instruction that keeps an order working across sessions until it fills or is canceled, subject to the broker's maximum duration.
GTD (Good Till Date): A time-in-force instruction that keeps an order working until the close of a date you choose, then cancels it if unfilled.
Hidden Order: A limit order that rests on an exchange without being shown in the public order book, so other traders discover it only by trading against it.
Iceberg Order: A large limit order that shows only a small part of its size in the order book and refills that visible part from a hidden reserve as it trades.
IOC (Immediate or Cancel): A time-in-force instruction to fill as much of an order as possible immediately and cancel whatever cannot be filled at once.
Limit Order: An order to buy at or below, or sell at or above, a set price, which guarantees the price but not that the order fills.
LIT (Limit If Touched): A resting order that sends a limit order when price touches a trigger set at a more favorable level than the current price.
LOC (Limit on Close): A limit order that takes part only in the closing auction and fills at the official closing price only if that price is at or better than its limit.
LOO (Limit on Open): A limit order that takes part only in the opening auction and fills at the official opening price only if that price is at or better than its limit.
Market Order: An order to buy or sell immediately at the best price currently available, which guarantees a fill in a liquid market but not the price.
MIT (Market If Touched): A resting order that becomes a market order when price touches a trigger set at a more favorable level than the current price.
MOC (Market on Close): A market order that executes only in the exchange's closing auction, at the official closing price.
MOO (Market on Open): A market order that executes only in the exchange's opening auction, at the official opening price, whatever that price turns out to be.
OCO Order (One Cancels the Other): A pair of linked orders in which the execution of one automatically cancels the other.
Pegged Order: An order whose limit price is tied to a reference price, such as the best bid, best offer or midpoint, and moves automatically as that reference moves.
Slippage: The difference between the price a trader expected when placing an order and the price at which it actually filled.
Stop Order (Stop-Loss): An order that waits at a trigger price and becomes a market order once the market trades at or through that price.
Stop-Limit Order: A conditional order with two prices: when the stop price trades, a limit order at the limit price is sent instead of a market order.
Stop-Loss: A predefined exit price that closes a position to cap its loss, usually placed in the market as a stop or stop-limit order.
Take-Profit Order: A limit order placed at a target price that closes a profitable position automatically when the market reaches it.
Trailing Stop: A stop order whose trigger price follows the market by a set distance as price moves in the position's favor, and never moves back.

Risk

Position sizing, margin, drawdown, Sharpe, Kelly and risk/reward.

Alpha: The part of a portfolio's return not explained by its exposure to the market: its return above what its beta alone would predict.
Average Trade: Net profit divided by the number of trades, the average dollar result each trade has produced.
Beta: A measure of how much an asset's returns move with a benchmark, usually the S&P 500, where 1.0 means it has moved in line with the market on average.
Black Swan: Nassim Nicholas Taleb's term for a rare, extreme event that lies outside normal expectations, has a severe impact, and is explained after the fact as if it had been predictable.
Calmar Ratio: Annualized return divided by maximum drawdown, usually measured over the most recent three years.
Correlation: A statistic from −1 to +1 measuring how closely the returns of two assets move together.
Correlation Risk: The risk that assets expected to offset one another start moving together, usually in a crisis, so a diversified or hedged portfolio loses more than planned.
CVaR (Conditional VaR / Expected Shortfall): The average loss in the worst cases beyond the Value at Risk threshold, for example the mean loss on the worst 5% of days.
Diversification: Spreading capital across assets, sectors or strategies whose returns do not move together, so that the portfolio's risk is lower than that of its parts.
Drawdown: The decline in account or portfolio value from its most recent peak to a later low, usually stated as a percentage of the peak.
Drawdown Duration: The length of time a portfolio spends below its previous peak, from that peak until equity sets a new high.
Efficient Frontier: The curve of portfolios that offer the highest expected return for each level of risk, given the assets' expected returns, volatilities and correlations.
Equity Curve: A chart of an account's or strategy's value over time, the running total of every gain and loss.
Expectancy: The average amount a trading system wins or loses per trade, combining its win rate with the average size of its wins and losses.
Fractional Kelly: A sizing rule that bets a fixed fraction, such as one half or one quarter, of the full Kelly criterion amount to cut volatility and estimation risk.
Hedging: Taking a position designed to offset losses in another position or exposure, reducing risk at the cost of a premium, basis risk or forgone gains.
Kelly Criterion: A formula for the fraction of capital to risk on each bet that maximizes long-run compound growth, given the win probability and the payoff ratio.
Leverage: Controlling a position larger than the capital put up, through borrowed money or derivatives, so gains and losses are magnified relative to equity.
Liquidation: The closing of a position, either by choice when a trader sells out, or by force when a broker or exchange closes it because margin is no longer sufficient.
Margin: The collateral a trader must hold to open and keep a leveraged position: a down payment on a stock loan, or a good-faith deposit on a futures contract.
Margin Call: A broker's demand for more cash or securities, or a smaller position, when account equity falls below the maintenance margin requirement.
Maximum Adverse Excursion (MAE): The largest unrealized loss a trade showed at any point between entry and exit.
Maximum Drawdown (Max DD): The largest peak-to-trough decline in value over a strategy's or portfolio's history, stated as a percentage of the peak.
Maximum Favorable Excursion (MFE): The largest unrealized profit a trade showed at any point between entry and exit.
Modern Portfolio Theory (MPT): Harry Markowitz's framework for choosing portfolios by expected return and variance, showing how combining imperfectly correlated assets lowers risk.
Position Sizing: The process of deciding how many shares, contracts or units to trade so that a loss at the planned stop equals a set fraction of the account.
Profit Factor: Gross profit from all winning trades divided by gross loss from all losing trades over the same period.
R-Multiple: A trade's profit or loss expressed as a multiple of its initial risk, R, the amount that would have been lost at the original stop.
Recovery Factor: Net profit divided by maximum drawdown over the same period, showing how many times a strategy earned back its worst loss.
Risk of Ruin: The probability that a trading account falls to zero, or to a loss level it cannot recover from, given its edge and the amount risked per trade.
Risk-to-Reward Ratio (R:R): The ratio between what a trade risks, from entry to stop, and what it aims to make, from entry to target.
Sharpe Ratio: A risk-adjusted return measure: a portfolio's return above the risk-free rate divided by the standard deviation of its returns.
Sortino Ratio: A risk-adjusted return measure like the Sharpe ratio that divides excess return by downside deviation, counting only volatility below a target.
Tail Risk: The risk of extreme losses from rare events in the far tails of the return distribution, which occur more often than a normal distribution predicts.
Value at Risk (VaR): A statistical estimate of the loss a portfolio should not exceed over a set period at a set confidence level, such as 95% over one day.
Win Rate: The percentage of completed trades that close with a profit.

Options

Calls, puts, the Greeks, volatility and the classic strategies.

American Option: An option that can be exercised on any business day up to and including its expiration date.
Assignment: The notice that an option seller must fulfil the contract: deliver shares at the strike for a short call, or buy shares at the strike for a short put.
At-the-Money (ATM): An option whose strike is equal or very close to the current price of the underlying.
Bear Call Spread (Credit): A credit spread that sells a call and buys a higher-strike call in the same expiration, profiting if the stock stays below the short strike.
Bear Put Spread: A debit spread that buys a put and sells a lower-strike put in the same expiration, for a capped bet on a moderate decline.
Bull Call Spread: A debit spread that buys a call and sells a higher-strike call in the same expiration, for a capped bet on a moderate rise.
Bull Put Spread (Credit): A credit spread that sells a put and buys a lower-strike put in the same expiration, profiting if the stock stays above the short strike.
Butterfly Spread: A three-strike options spread that buys one lower strike, sells two middle strikes and buys one upper strike, paying the most if the stock ends at the middle.
Calendar Spread (Time Spread): A spread that sells a near-term option and buys a longer-term option of the same type and strike, profiting from the faster decay of the near-term leg.
Call Option: A contract that gives its buyer the right, but not the obligation, to buy the underlying at the strike price until the option expires.
Cash-Secured Put: Selling a put while holding enough cash to buy the shares at the strike, a way to earn premium while waiting to buy a stock lower.
Collar: Owning a stock while buying a protective put below the price and selling a covered call above it, which caps both the loss and the gain.
Condor Spread: A four-strike options spread, like a butterfly whose middle strike is split in two, that pays its maximum anywhere between the inner strikes.
Covered Call: Owning 100 shares and selling one call against them, which earns the call premium but caps the gain at the strike.
Delta (Δ): How much an option's price changes for a $1 move in the underlying, from 0 to 1 for calls and from 0 to −1 for puts.
Diagonal Spread: A spread that buys an option in a later expiration and sells an option of the same type at a different strike in a nearer expiration.
Earnings Play (Options): An options position opened before a company's earnings report to trade the size of the price move or the drop in implied volatility that follows it.
European Option: An option that can be exercised only at its expiration, not on any earlier date.
Exercise: Using the right an option grants: buying the underlying at the strike with a call, or selling it at the strike with a put.
Expected Move: The price range the options market implies a stock will move within by a given expiration, usually read from the at-the-money straddle.
Expiration Date: The date an option contract stops trading and is settled: after it, the option is either exercised into a position or expires worthless.
Extrinsic Value (Time Value): The part of an option's price above its intrinsic value, paid for the time left and the chance of a larger move.
Gamma (Γ): How much an option's delta changes for a $1 move in the underlying: the rate at which directional exposure speeds up or slows down.
In-the-Money (ITM): An option with intrinsic value: a call whose strike is below the stock price, or a put whose strike is above it.
Intrinsic Value: The part of an option's price it would be worth if exercised right now: the amount by which it is in the money.
Iron Butterfly: A four-leg, defined-risk options position that sells an at-the-money call and put at one strike and buys an out-of-the-money call and put as wings.
Iron Condor: A four-leg, defined-risk options position that sells an out-of-the-money put spread and an out-of-the-money call spread in the same expiration.
IV Crush: The sharp fall in an option's implied volatility, and so in its price, once a scheduled event such as an earnings report has passed.
Jade Lizard: A short put combined with a short call spread, sized so the total credit is at least the call spread's width, leaving no upside risk.
LEAPS: Long-term equity anticipation securities: listed options with expirations more than a year away, out to about three years.
Long Call: Buying a call option: a bullish position whose loss is limited to the premium paid and whose gain grows as the stock rises above the breakeven.
Long Put: Buying a put option: a bearish or hedging position whose loss is limited to the premium and whose gain grows as the stock falls below the breakeven.
Long Straddle: Buying a call and a put at the same strike and expiration, usually at the money, to profit from a large move in either direction.
Long Strangle: Buying an out-of-the-money call and an out-of-the-money put in the same expiration, a cheaper bet than a straddle on a large move either way.
Max Pain: The strike at which the total value of all open calls and puts in an expiration would be smallest, the price where option buyers as a group would lose the most.
Open Interest (OI): The number of option contracts in a given series that are open, meaning opened and not yet closed, exercised or expired.
Out-of-the-Money (OTM): An option with no intrinsic value: a call whose strike is above the stock price, or a put whose strike is below it.
Pin Risk: The uncertainty an option seller faces when the stock closes at or very near a short strike at expiration, so they cannot be sure whether they will be assigned.
Poor Man's Covered Call: A diagonal spread that buys a long-dated, deep in-the-money call as a stand-in for shares and sells short-dated calls against it.
Premium: The price of an option, paid by the buyer to the seller, made up of intrinsic value plus extrinsic (time) value.
Protective Put: Owning a stock and buying a put on it, so that losses below the put's strike are capped while the upside stays open.
Put Option: A contract that gives its buyer the right, but not the obligation, to sell the underlying at the strike price until the option expires.
Ratio Spread: A spread that buys and sells options of the same type and expiration in unequal numbers, most commonly buying one and selling two.
Rho (ρ): How much an option's price changes for a one-point (one percentage point) change in the risk-free interest rate.
Short Call (Naked Call): Selling a call without owning the underlying, which collects the premium but leaves an unlimited loss if the stock rises.
Short Put (Cash-Secured Put): Selling a put option to collect its premium, taking on the obligation to buy the stock at the strike if assigned.
Short Straddle: Selling an at-the-money call and an at-the-money put at the same strike, collecting a large premium in exchange for exposure to big moves either way.
Short Strangle: Selling an out-of-the-money call and an out-of-the-money put in the same expiration, keeping the premium if the stock stays between the strikes.
Strike Price (Exercise Price): The fixed price at which an option holder can buy (call) or sell (put) the underlying if the option is exercised.
Synthetic Long Stock: A long call and a short put at the same strike and expiration, a combination whose profit and loss tracks 100 shares of the stock.
The Greeks: The set of risk measures (delta, gamma, theta, vega and rho) that show how an option's price responds to changes in its inputs.
Theta (Θ): How much an option's price falls from one day passing, with the stock price and implied volatility unchanged.
Vega (ν): How much an option's price changes for a one-point (one percentage point) change in implied volatility.
Vertical Spread: An options spread that buys one option and sells another of the same type and expiration at a different strike.
VIX Futures: Futures contracts that settle to the VIX index, letting traders bet on where S&P 500 implied volatility will be at a future date.
Volatility Skew: The pattern in which options on the same underlying and expiration carry different implied volatilities at different strikes.
Weekly Options (Weeklys): Short-dated options that expire every week rather than only on the standard monthly third Friday.
Wheel Strategy: A repeating income cycle: sell cash-secured puts until assigned, then sell covered calls on the shares until they are called away.
Zero-DTE Options (0-DTE): Options traded on the day they expire, with zero days to expiration, so their entire remaining value is decided within hours.

Futures

Contracts, margin, settlement, roll, contango and backwardation.

Back Month: Any futures contract month that expires after the front month, also called a deferred contract.
Backwardation: A futures market condition in which contracts for later delivery trade at lower prices than nearer contracts or the spot price.
Basis: The difference between an asset's spot (cash) price and its futures price, which shrinks toward zero as the futures contract approaches expiry.
Calendar Spread (Futures): A position that is long one futures contract month and short another month of the same contract, profiting from changes in the price difference between them.
Cash Settled: A settlement method in which a contract is closed at expiry by a cash payment based on a reference price, with no delivery of the underlying.
Cash-and-Carry Arbitrage: An arbitrage that buys an asset in the spot market and sells it forward through futures when the futures price exceeds spot plus the full cost of carry.
Circuit Breaker: A rule that halts trading across a market, or in a single security, after a large price move, giving participants time to absorb information.
Contango: A futures market condition in which contracts for later delivery trade at higher prices than nearer contracts or the spot price.
Continuous Contract: A price series that joins successive futures contract months into one long history, used for charting and backtesting futures.
Contract Month Codes: The single letters exchanges use to mark a futures contract's delivery month, from F for January to Z for December, as in ESZ5.
Convergence: The narrowing of the gap between a futures price and the spot price of its underlying as the contract approaches expiry.
Cost of Carry: The net cost of holding an asset until a future date, financing plus storage and insurance minus any income the asset pays, which links futures prices to spot.
Crack Spread: The price difference between crude oil and the refined products made from it, a measure of refining margins that can be traded with futures.
Crush Spread: The difference between the value of the soybean meal and oil produced from soybeans and the price of the soybeans, a processing margin traded with CBOT futures.
E-Mini: CME Group's family of electronically traded, smaller-size stock index futures, led by the E-mini S&P 500 (ES).
First Notice Day (FND): The first day on which holders of short positions in a physically settled futures contract can give notice of delivery, and longs can be assigned it.
Front Month: The futures contract with the nearest expiry date, usually the most actively traded month of a given market.
Futures Contract: A standardized, exchange-traded agreement to buy or sell a set quantity of an asset at a price agreed today, for settlement on a future date.
Initial Margin: The deposit an exchange requires per contract to open a futures position, a performance bond that covers likely daily losses.
Inter-Commodity Spread: A spread between futures on two different but related commodities, such as crude oil against its products or wheat against corn, traded on their price relationship.
Last Trade Day: The final day a given futures contract month can be traded, after which open positions are settled in cash or by delivery.
Limit Up / Limit Down: The maximum price rise or fall an exchange allows in a futures contract within a session; a market at that price is limit up or limit down.
Maintenance Margin: The minimum equity that must remain in an account to keep a leveraged position open; falling below it triggers a margin call.
Mark to Market (MtM): The daily revaluation of every futures position at the exchange's settlement price, with that day's gains and losses paid in cash between accounts.
Micro Futures: Futures contracts one-tenth the size of their E-mini or standard counterparts, launched by CME Group in 2019 for stock indexes and later for other markets.
Notional Value: The total market value of the asset a derivative position controls; for a futures contract, its price times its multiplier.
Open Interest (Futures): The total number of futures contracts outstanding, opened and not yet closed out or delivered, in a given contract or market.
Physical Settlement: A settlement method in which the seller of a futures contract delivers the actual underlying asset to the buyer at expiry.
Roll (Rolling Contracts): Closing a position in an expiring futures contract and opening the same position in a later month to keep exposure beyond expiry.
Settlement: How a futures contract is concluded: daily through settlement prices, and at expiry by cash payment or physical delivery of the underlying.
Spot Price: The price for buying or selling an asset for immediate delivery, as opposed to the price agreed today for delivery at a later date.
Term Structure: The curve formed by the prices of a futures market's contracts across all expiry months, from the front month to the most distant.
Tick: The smallest price movement a futures contract can make, set by the exchange for each contract.
Tick Size: The minimum price increment an exchange allows for a contract, the size of one tick expressed in price terms.
Tick Value: The dollar amount gained or lost on one contract when its price moves by one tick.

Forex

Pips, lots, pairs, sessions, swaps and the carry trade.

Ask (Offer): The price at which a broker or the market will sell the base currency to you, which is the price you pay when you buy a pair.
Base Currency: The first currency in a currency pair: the one being bought or sold, one unit of which the quote is priced against.
Bid: The price at which a broker or the market will buy the base currency from you, which is the price you get when you sell a pair.
Carry Trade: A forex strategy that buys a high-interest-rate currency against a low-rate one to earn the interest rate differential while holding the position.
Cross Rate: The exchange rate between two currencies, neither of which is the US dollar, worked out from each currency's rate against the dollar.
Currency Correlation: The degree to which two currency pairs move together, measured from −1 (always opposite) to +1 (always the same direction).
Currency Strength Meter: A tool that ranks the major currencies by how much each has gained or lost against all the others over a chosen period.
Direct Quote: An exchange-rate quote that gives the price of one unit of foreign currency in the domestic currency.
ECN (Electronic Communication Network): A broker model in which client orders are matched on an electronic network of banks, liquidity providers and other traders, for raw spreads plus a commission.
Exotic Pairs: Currency pairs that combine a major currency with the currency of a smaller or emerging economy, such as USD/TRY, USD/ZAR, USD/MXN or EUR/PLN.
Forex Hedging: Reducing currency risk with an offsetting position, whether by a business protecting future payments or by a trader limiting exposure on open trades.
Forex Trading Sessions: The overlapping regional trading days (Sydney, Tokyo, London and New York) that keep the forex market open 24 hours a day, five days a week.
Indirect Quote: An exchange-rate quote that gives the price of one unit of the domestic currency in a foreign currency.
Interest Rate Differential: The gap between the interest rates of two currencies, which sets the swap on a currency position, the pair's forward price and the appeal of a carry trade.
Lot (Standard / Mini / Micro / Nano): A standard unit of forex position size: a standard lot is 100,000 units of the base currency, a mini lot 10,000, a micro lot 1,000 and a nano lot 100.
Major Pairs: The seven most widely traded currency pairs, each with the US dollar on one side: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD.
Market Maker (Forex Broker): A forex broker that quotes its own prices and takes the other side of client trades in-house, rather than passing every order to outside providers.
Minor Pairs (Cross Pairs): Currency pairs made of two major currencies other than the US dollar, such as EUR/GBP, EUR/JPY, GBP/JPY and AUD/JPY.
NFP Trading: Trading currency pairs around the monthly US non-farm payrolls report, usually released on the first Friday of the month at 8:30 am ET.
Pip: The standard unit of price change in a currency pair: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.
Pip Value: The amount of money a one-pip move is worth on a given position, which depends on the pair, the position size and the account currency.
Pipette (Fractional Pip): One tenth of a pip: the fifth decimal place on most currency pairs and the third on yen pairs.
Quote Currency (Counter Currency): The second currency in a currency pair: the currency in which the price of one unit of the base currency is expressed.
Requote: A dealing-desk broker's reply to an order that rejects the requested price and offers to fill it at a new, usually worse, price.
Risk-On / Risk-Off: A description of whether investors are seeking risk or avoiding it, a shift in mood that drives many currencies and asset classes to move together.
Rollover: The daily process at 5 pm New York time in which open forex positions are carried to the next value date and charged or credited the swap.
Safe Haven (Currency): A currency that tends to hold its value or rise when global markets are under stress, chiefly the Japanese yen, the Swiss franc and often the US dollar.
Slippage (Forex): The difference between the price a forex order was expected to fill at and the price at which it actually filled.
Spread (Bid-Ask): The difference between the bid price and the ask price of a currency pair, which is the cost of an immediate round trip.
STP (Straight Through Processing): A broker model in which client orders are passed automatically to outside liquidity providers, with no dealing desk deciding whether to fill them.
Swap Rate (Rollover Rate): The daily interest a forex broker credits or charges for holding a position past the 5 pm New York cutoff, based on the two currencies' interest rates.
Triangular Arbitrage: Trading three currency pairs in a loop to profit when a quoted cross rate differs from the rate implied by the other two pairs.

Crypto

Wallets, staking, DeFi, stablecoins, layer 2s and on-chain risk.

Airdrop: An airdrop is a free distribution of tokens to wallet addresses that meet set criteria, most often past users of a protocol or holders of another token.
Altcoin: An altcoin is any cryptocurrency other than Bitcoin, from large smart-contract platforms to small speculative tokens.
APR (Annual Percentage Rate): APR (annual percentage rate) is a yearly interest or yield rate that ignores compounding, the simple rate before reinvested earnings are counted.
APY (Annual Percentage Yield): APY (annual percentage yield) is the yearly return on a deposit including the effect of compounding, so it is higher than the APR when interest is reinvested.
Automated Market Maker (AMM): An automated market maker (AMM) is a smart contract that quotes prices from a formula applied to its pool balances, commonly x times y equals k, instead of matching buyers and sellers.
Bitcoin (BTC): Bitcoin is the first cryptocurrency, a peer-to-peer digital currency with a capped supply, launched in 2009 by the pseudonymous Satoshi Nakamoto.
Block Reward: A block reward is what a blockchain pays the miner or validator who adds a block: newly created coins (the subsidy) plus the fees of the transactions inside it.
Blockchain: A blockchain is a shared, append-only ledger in which batches of transactions (blocks) are chained together by cryptographic hashes and agreed on by a network of nodes.
Bridge (Cross-Chain Bridge): A cross-chain bridge is a protocol that moves tokens or messages between blockchains, usually by locking assets on one chain and issuing matching wrapped tokens on the other.
Cold Wallet (Cold Storage): A cold wallet keeps crypto private keys on a device or medium that is never connected to the internet, such as a hardware wallet, paper backup or air-gapped computer.
Consensus Mechanism: A consensus mechanism is the set of rules that lets a blockchain's independent nodes agree on one order of transactions without a central authority.
Custody (Self vs Custodial): Custody is who controls the private keys to crypto assets: in self-custody the owner holds them, while in custodial arrangements an exchange or custodian holds them for you.
dApp (Decentralised Application): A dApp (decentralized application) is an application whose core logic runs in smart contracts on a blockchain, usually reached through a web front end and a crypto wallet.
DeFi (Decentralised Finance): DeFi (decentralized finance) is the set of financial services, such as trading, lending, borrowing and derivatives, run by smart contracts on public blockchains instead of intermediaries.
Depeg: A depeg is when a token designed to track another asset, such as a $1 stablecoin or a staked or wrapped coin, trades meaningfully away from its target value.
DEX (Decentralised Exchange): A DEX (decentralized exchange) is a trading venue run by smart contracts, where users swap tokens directly from their own wallets without handing custody to an operator.
Ethereum (ETH): Ethereum is a programmable blockchain whose native coin, ether (ETH), pays for running smart contracts, the code behind most DeFi, NFTs and tokens.
FOMO (Fear of Missing Out): FOMO (fear of missing out) is the urge to buy because others appear to be profiting from a rising price, a driver of late-stage rallies and buying near tops.
Fork (Blockchain): A fork is a change to a blockchain's rules or a split in its history, either a backward-compatible soft fork or an incompatible hard fork that can create two chains.
FUD (Fear, Uncertainty, Doubt): FUD (fear, uncertainty and doubt) is crypto slang for negative news, rumors or commentary that spreads worry about an asset, whether it is accurate or not.
Funding Rate: The funding rate is the periodic payment between holders of long and short perpetual futures that keeps the perp price close to spot; when it is positive, longs pay shorts.
Gas Fee: A gas fee is the payment, in the chain's native coin, that a user attaches to a transaction on Ethereum or a similar network to cover the computation and storage it uses.
Governance Token: A governance token is a crypto token that gives holders voting power over a protocol's rules, parameters and treasury, usually one vote per token.
Halving (Bitcoin): The Bitcoin halving is the pre-programmed 50% cut in the block subsidy every 210,000 blocks, roughly every four years, which halves the rate of new BTC supply.
Hard Fork: A hard fork is a blockchain upgrade that changes the rules in a way older software rejects, so every node must upgrade or be left on a separate chain.
Hash Rate: Hash rate is the total computing power working to mine a Proof-of-Work blockchain, measured in hashes per second, and a gauge of how costly the network is to attack.
HODL: HODL is crypto slang for holding an asset through volatility instead of trading it, born from a misspelled 2013 forum post and later read as 'hold on for dear life'.
Hot Wallet: A hot wallet is a crypto wallet whose private keys live on an internet-connected device, such as a phone app, desktop app, browser extension or exchange account.
ICO (Initial Coin Offering): An ICO (initial coin offering) is a public sale of a new crypto token to raise money for a project, a fundraising method that boomed in 2017 and 2018.
IDO (Initial DEX Offering): An IDO (initial DEX offering) is a token launch on a decentralized exchange or launchpad, where the token is sold or listed straight into on-chain liquidity.
IEO (Initial Exchange Offering): An IEO (initial exchange offering) is a token sale run by a centralized exchange, which vets the project, sells tokens to its users and then lists the token for trading.
Impermanent Loss (IL): Impermanent loss is the shortfall a liquidity provider suffers versus simply holding the two tokens, caused by the pool rebalancing as their relative price changes.
Layer 1 (L1): A layer 1 (L1) is a base blockchain that processes and finalizes its own transactions with its own consensus and native coin, such as Bitcoin, Ethereum or Solana.
Layer 2 (L2): A layer 2 (L2) is a network built on top of a base blockchain that handles transactions off the main chain and settles them back to it, cutting fees and raising throughput.
Liquid Staking: Liquid staking is staking through a protocol that gives back a tradable token, such as stETH, representing the staked coins plus rewards, so the position stays usable while it earns.
Liquidity Pool: A liquidity pool is a pot of tokens locked in a smart contract that traders swap against, funded by liquidity providers who earn the trading fees in return.
Memecoin: A memecoin is a crypto token built around an internet meme, joke or community, with little or no utility, whose price rests almost entirely on attention and speculation.
MEV (Maximal Extractable Value): MEV (maximal extractable value) is the profit a block producer, or bots paying it, can capture by choosing which transactions go into a block and in what order.
Mining (Crypto): Mining is the process in Proof-of-Work blockchains where specialized computers compete to add the next block and earn newly created coins plus transaction fees.
NFT (Non-Fungible Token): An NFT (non-fungible token) is a blockchain token with a unique ID that records ownership of a specific item, such as digital art, a collectible, an in-game asset or a ticket.
Node: A node is a computer running a blockchain's software that keeps a copy of the ledger, checks new transactions and blocks against the rules, and relays them to other nodes.
On-Chain Analysis: On-chain analysis is the study of public blockchain data, such as wallet balances, transfers, exchange flows and miner activity, to read the behavior of market participants.
Optimistic Rollup: An optimistic rollup is a layer-2 network that posts transaction batches to the layer 1 and treats them as valid unless someone submits a fraud proof during a challenge window, usually about seven days.
Perpetual Futures (Perps): A perpetual futures contract (perp) is a leveraged futures contract with no expiry date, kept close to the spot price by periodic funding payments between longs and shorts.
Private Key: A private key is the secret number that proves ownership of a crypto address and signs its transactions; whoever holds it controls the funds.
Proof of Stake (PoS): Proof of Stake (PoS) is a consensus mechanism in which validators lock up the network's coin as collateral to propose and vote on blocks, and can lose it for cheating.
Proof of Work (PoW): Proof of Work (PoW) is a consensus mechanism in which miners compete to find a valid block by spending computing power, and the chain with the most accumulated work wins.
Public Key (Address): A public key is the shareable half of a crypto key pair, and an address is a shorter code derived from it that others use to send you funds.
Pump and Dump: A pump and dump is a manipulation scheme in which promoters buy a thinly traded asset, hype it to draw in buyers, then sell their holdings into the rally.
Rollup: A rollup is a layer-2 network that executes transactions off the main chain and posts them in compressed batches to the layer 1, which keeps the data and settles disputes or proofs.
Rug Pull: A rug pull is a scam in which a crypto project's creators abruptly withdraw the liquidity or funds behind a token, leaving holders with a token they cannot sell for value.
Seed Phrase (Mnemonic): A seed phrase is a list of 12 to 24 words that encodes a wallet's master secret, from which every private key in the wallet can be recreated.
Slashing: Slashing is the penalty in a Proof-of-Stake network that destroys part of a validator's stake and removes it from duty after it provably breaks the protocol's rules.
Smart Contract: A smart contract is a program stored on a blockchain that runs exactly as written when called, moving funds or updating data without an intermediary.
Soft Fork: A soft fork is a backward-compatible blockchain upgrade that only tightens the rules, so blocks made under the new rules are still accepted by older nodes.
Stablecoin: A stablecoin is a crypto token designed to hold a steady price, usually $1, by backing it with reserves, over-collateralized crypto or an algorithm.
Staking: Staking is locking crypto in a Proof-of-Stake network, directly or through a provider, to help secure it in exchange for rewards paid in the same coin.
Store of Value: A store of value is an asset expected to keep its purchasing power over long periods, a role held by gold and claimed for bitcoin under the 'digital gold' thesis.
Tether (USDT): Tether (USDT) is the largest dollar stablecoin by market value, issued by Tether since 2014 and backed by reserves the company says are mostly US Treasury bills.
Token (vs Coin): A token is a crypto asset created by a smart contract on an existing blockchain, while a coin is the native asset of its own blockchain, such as BTC or ETH.
Token Vesting: Token vesting is the schedule that releases tokens allocated to a project's team, investors and advisors over time, often after a cliff, instead of all at once.
TVL (Total Value Locked): TVL (total value locked) is the dollar value of all crypto deposited in a DeFi protocol's or a blockchain's smart contracts, the standard gauge of its size.
USD Coin (USDC): USD Coin (USDC) is a dollar stablecoin issued by Circle, backed by cash and short-term US Treasuries and redeemable one for one by approved customers.
Validator: A validator is a participant in a Proof-of-Stake network that locks up stake and runs software to propose and attest to blocks, earning rewards and risking penalties.
Whale: A whale is an individual or entity holding a very large amount of a cryptocurrency, enough that its trades or transfers can move the price.
Yield Farming: Yield farming is moving crypto between DeFi protocols, such as liquidity pools, lending markets and incentive programs, to collect the highest available yield, often paid in reward tokens.
Zero-Knowledge Proof (ZK): A zero-knowledge proof is a cryptographic method that lets one party prove a statement is true, such as that a batch of transactions was executed correctly, without revealing anything else.

Macro

The Fed, rates, inflation, jobs, GDP and the yield curve.

Balance of Payments (BoP): The balance of payments is a country's record of all economic transactions with the rest of the world, split into the current, capital and financial accounts.
Bond: A bond is a loan in the form of a tradable security: the issuer borrows a fixed amount and promises to pay interest, the coupon, and to repay the face value at maturity.
Business Cycle: The business cycle is the recurring pattern of expansion and contraction in economic activity, running from trough to peak and back again.
Capital Account: In balance of payments statistics, the capital account records capital transfers and purchases or sales of non-produced, non-financial assets between a country and the rest of the world.
Convexity (Bond): Convexity measures how a bond's duration changes as yields change, capturing the curvature in the price-yield relationship that duration alone misses.
Core CPI: Core CPI is the Consumer Price Index excluding food and energy, the most volatile categories, to show the underlying trend in inflation.
CPI (Consumer Price Index): The Consumer Price Index is a monthly US measure of the average change in prices paid by urban consumers for a fixed basket of goods and services.
Credit Rating: A credit rating is a letter grade from an agency such as S&P Global, Moody's or Fitch that rates a borrower's ability to repay its debt.
Credit Spread (Bond): A credit spread is the extra yield a bond pays over a government bond of similar maturity, compensating investors for the risk that the issuer will not pay.
Current Account: The current account records a country's trade in goods and services plus its net income and transfers with the rest of the world.
Deflation: Deflation is a sustained fall in the general price level, the opposite of inflation, which makes money and existing debts worth more in real terms.
Depression: A depression is an unusually severe and long-lasting recession, with a deep fall in output and very high unemployment over several years.
Discount Rate: The discount rate is the interest rate the Federal Reserve charges banks that borrow directly from it through its discount window.
Dot Plot (FOMC): The dot plot is the FOMC chart in which each Fed official marks where they think the federal funds rate should be at the end of the next few years and in the longer run.
Duration (Bond): Duration measures how sensitive a bond's price is to changes in interest rates, roughly the percentage price change for a one percentage point move in yield.
Easing Cycle: An easing cycle is a period in which a central bank cuts its policy rate in steps, and sometimes expands its balance sheet, to support growth.
Economic Calendar: An economic calendar is a schedule of upcoming data releases, central bank meetings and other macro events, with the forecast and previous value for each.
Exchange Rate: An exchange rate is the price of one currency in terms of another, such as how many US dollars one euro buys.
Expansion (Economic): An expansion is the phase of the business cycle in which economic activity grows, running from a trough to the next peak.
Fed Dual Mandate: The Fed's dual mandate is the pair of goals Congress set for US monetary policy: maximum employment and stable prices.
Federal Funds Rate: The federal funds rate is the interest rate at which US banks lend reserves to each other overnight, and the FOMC sets a target range for it.
Federal Reserve (Fed): The Federal Reserve is the central bank of the United States: it sets monetary policy, supervises banks and acts as lender of last resort to the financial system.
Fiscal Policy: Fiscal policy is a government's use of spending, taxes and borrowing to influence the economy.
FOMC (Federal Open Market Committee): The Federal Open Market Committee is the Federal Reserve body that sets US monetary policy, including the target range for the federal funds rate.
Foreign Exchange Reserves: Foreign exchange reserves are the foreign-currency assets, mostly other countries' government bonds, that a central bank or government holds to support its currency and meet external obligations.
Forward Guidance: Forward guidance is a central bank's communication about the likely future path of policy, used to shape market expectations of interest rates.
GDP (Gross Domestic Product): Gross domestic product is the total market value of all final goods and services produced within a country over a period, the broadest measure of economic output.
Goldilocks Economy: A Goldilocks economy is one growing fast enough to avoid recession but not so fast that it creates inflation pressure, so policy can stay steady.
Hard Landing: A hard landing is a sharp slowdown or recession caused by a central bank tightening policy to bring inflation down.
High Yield (Junk Bonds): High-yield bonds, also called junk bonds, are bonds rated below BBB- or Baa3, which pay higher yields because their issuers are more likely to default.
Hyperinflation: Hyperinflation is extremely rapid inflation, commonly defined as prices rising more than 50% in a single month.
Inflation: Inflation is a sustained rise in the general level of prices, which means each unit of money buys less over time.
Initial Jobless Claims: Initial jobless claims are the weekly count of new applications for US unemployment insurance, the most timely official gauge of layoffs.
Interest Rate: An interest rate is the price of borrowing money, expressed as a percentage of the amount borrowed per year.
Investment Grade: Investment grade describes bonds rated BBB- or higher by S&P and Fitch, or Baa3 or higher by Moody's, the ratings associated with low default risk.
ISM PMI (Manufacturing / Services): The ISM PMIs are monthly surveys of US purchasing managers in manufacturing and services, scaled so that a reading above 50 signals expansion and below 50 contraction.
Monetary Policy: Monetary policy is how a central bank manages interest rates and the supply of money and credit to pursue goals such as stable prices and full employment.
Money Supply (M1 / M2 / M3): Money supply is the total amount of money in an economy, measured at different breadths such as M1 and M2.
Non-Farm Payrolls (NFP): Non-farm payrolls is the monthly change in the number of US jobs outside farming, the headline figure of the government's Employment Situation report.
PCE (Personal Consumption Expenditures): The PCE price index measures changes in the prices of goods and services bought by or for US households, and its headline rate is the inflation gauge the Fed targets at 2%.
PPI (Producer Price Index): The Producer Price Index measures the average change in prices that US producers receive for their goods and services.
Quantitative Easing (QE): Quantitative easing is a central bank buying large amounts of government bonds or other securities with newly created reserves to push down long-term rates and ease financial conditions.
Quantitative Tightening (QT): Quantitative tightening is a central bank shrinking its balance sheet, usually by letting bonds mature without reinvesting the proceeds, which drains reserves from the banking system.
Recession: A recession is a significant, broad-based decline in economic activity that lasts more than a few months, visible in output, jobs, income and sales.
Retail Sales: Retail sales is a monthly US report on the dollar value of sales at retailers and restaurants, an early read on consumer spending.
Soft Landing: A soft landing is a central bank slowing the economy enough to bring inflation down without causing a recession.
Sovereign Debt: Sovereign debt is money a national government owes, mostly in the form of bonds sold to domestic and foreign investors.
Sovereign Default: A sovereign default is a national government failing to make a payment on its debt on time and in full, or forcing creditors to accept worse terms.
Stagflation: Stagflation is high inflation combined with stagnant growth and rising unemployment, a mix that standard policy tools struggle to fix.
Tapering: Tapering is the gradual reduction of a central bank's asset purchases, the step between running quantitative easing and ending it.
Tightening Cycle: A tightening cycle is a period in which a central bank raises its policy rate step by step, and often shrinks its balance sheet, to slow the economy and inflation.
Trade Balance: The trade balance is the value of a country's exports minus its imports of goods and services over a period.
Treasury Bill (T-Bill): A Treasury bill is short-term US government debt with a maturity of one year or less, sold at a discount to face value and repaid at par.
Treasury Bond: A Treasury bond is long-term US government debt with a maturity of 20 or 30 years that pays a fixed coupon every six months.
Treasury Note: A Treasury note is US government debt with a maturity of 2, 3, 5, 7 or 10 years that pays interest every six months.
Unemployment Rate: The unemployment rate is the share of the labor force that has no job but is available for work and actively looking for one.
Yield (Bond): A bond's yield is the annual return it pays relative to its price, the figure traders use to compare bonds instead of price.
Yield Curve: The yield curve is a line plotting the yields of bonds of the same credit quality across maturities, usually US Treasuries from one month to 30 years.
Yield Curve Inversion: A yield curve inversion is when short-term Treasury yields rise above long-term yields, a pattern that has preceded every US recession since the late 1960s.
Yield to Maturity (YTM): Yield to maturity is the annualized return on a bond bought at today's price and held until it matures, counting all coupons and the repayment of face value.

Fundamental

Valuation ratios, margins, cash flow, dividends and filings.

10-K Filing: A 10-K is the annual report every US public company files with the SEC, containing audited financial statements and a full description of its business and risks.
10-Q Filing: A 10-Q is the quarterly report US public companies file with the SEC for each of their first three fiscal quarters, with unaudited financial statements.
13F Filing: Form 13F is the quarterly SEC report in which institutional investment managers with at least $100 million in qualifying US-listed securities list their long holdings.
8-K Filing: An 8-K is the current report a US public company must file with the SEC to announce major events between its quarterly and annual reports.
Book Value: Book value is a company's net worth on its balance sheet: total assets minus total liabilities, which equals shareholders' equity.
Capital Allocation: Capital allocation is how a company's management decides to use the cash it generates or raises: reinvesting, acquiring, repaying debt, paying dividends or buying back shares.
Cash Ratio: The cash ratio divides a company's cash and marketable securities by its current liabilities, the strictest test of short-term liquidity.
Current Ratio: The current ratio divides a company's current assets by its current liabilities, a basic test of whether it can pay the bills that fall due within a year.
Debt-to-Equity Ratio: The debt-to-equity ratio is a company's total debt divided by its shareholders' equity, a measure of how much of the business is financed by borrowing.
Diluted EPS: Diluted EPS is earnings per share calculated as if all options, warrants, restricted stock and convertible securities that would add shares had been turned into shares.
Dilution: Dilution is the reduction in existing shareholders' percentage ownership, and usually in earnings per share, when a company issues new shares.
Discounted Cash Flow (DCF): A discounted cash flow model values a business as the sum of its expected future free cash flows, each discounted back to today at a rate that reflects risk.
Dividend Aristocrats: The Dividend Aristocrats are the S&P 500 companies that have raised their dividend every year for at least 25 consecutive years, tracked by an index from S&P Dow Jones Indices.
Dividend Growth Rate: The dividend growth rate is the annualized rate at which a company has raised, or is expected to raise, its dividend per share.
Dividend Payout Ratio: The dividend payout ratio is the share of a company's net income that it pays out to shareholders as dividends.
Dividend Yield: Dividend yield is a stock's annual dividend per share divided by its share price: the cash income a shareholder receives as a percentage of the price.
Earnings Guidance: Earnings guidance is a company's own forecast of its future revenue, earnings or other key figures, usually given alongside its quarterly results.
Earnings Report: An earnings report is a public company's quarterly release of its revenue, profit and earnings per share, usually with an outlook and a conference call for analysts.
Earnings Whisper: The earnings whisper is the unofficial earnings-per-share figure traders actually expect from a company, which often differs from the published analyst consensus.
EBIT (Operating Income): EBIT, earnings before interest and taxes, is a company's profit from its operations before financing costs and income tax are deducted.
EBITDA: EBITDA is earnings before interest, taxes, depreciation and amortization: operating profit with the non-cash charges for asset wear and acquired intangibles added back.
Enterprise Value (EV): Enterprise value is the value of a company's whole business to all of its investors: market capitalization plus debt and other claims, minus cash.
EPS (Earnings Per Share): Earnings per share is a company's net income, minus preferred dividends, divided by the average number of its common shares outstanding over the period.
EV/EBITDA: EV/EBITDA divides a company's enterprise value by its EBITDA, a valuation multiple that compares businesses regardless of how much debt they carry.
EV/Revenue: EV/Revenue divides a company's enterprise value by its annual revenue, a sales multiple that, unlike price-to-sales, accounts for the company's debt and cash.
Ex-Dividend Date: The ex-dividend date is the first trading day on which a stock trades without the right to its next dividend, so a buyer must purchase before that day to be paid.
FCF Yield: FCF yield is a company's annual free cash flow divided by its market capitalization: the cash the business generates as a percentage of its share price.
Float (Public Float): Float is the number of a company's shares available for the public to trade, excluding shares held by insiders, controlling owners and holders under lockup.
Form 4: Form 4 is the SEC filing in which a company's officers, directors and owners of more than 10% of its shares report their trades in its stock within two business days.
Forward P/E: Forward P/E is a stock's price divided by analysts' consensus estimate of its earnings per share for the next twelve months or the next fiscal year.
Free Cash Flow (FCF): Free cash flow is the cash a company's operations generate after paying for the capital spending needed to maintain and expand its assets.
Gross Margin: Gross margin is the share of revenue left after subtracting the direct cost of producing the goods or services sold.
Insider Trading: Insider trading means buying or selling a security while holding material non-public information about it, which is illegal; the term also covers legal, reported trades by company insiders.
Interest Coverage Ratio: The interest coverage ratio divides a company's operating profit (EBIT) by its interest expense, showing how many times over it can pay the interest on its debt.
IPO (Initial Public Offering): An initial public offering is a private company's first sale of shares to the public, after which its stock trades on an exchange.
Market Capitalisation: Market capitalization is the total market value of a company's shares: the share price multiplied by the number of shares outstanding.
Mergers and Acquisitions (M&A): Mergers and acquisitions are deals in which companies combine or one company buys another, paid for with cash, stock or a mix of the two.
Net Income (Bottom Line): Net income is the profit left after a company subtracts all its costs, interest, taxes and one-off items from revenue: the last line of the income statement.
Net Margin: Net margin is net income as a percentage of revenue: how many cents of each sales dollar end up as profit for shareholders.
Operating Margin: Operating margin is operating income as a percentage of revenue: the share of sales left after production and running costs, before interest and taxes.
P/E Ratio (Price-to-Earnings): The price-to-earnings ratio is a stock's price divided by its earnings per share: how many dollars investors pay for each dollar of the company's annual profit.
PEG Ratio: The PEG ratio divides a stock's P/E by its expected annual earnings growth rate, so that companies growing at different speeds can be compared.
Price-to-Book (P/B): Price-to-book compares a company's market value with its accounting net worth: the share price divided by book value per share.
Price-to-Sales (P/S): Price-to-sales is a company's market capitalization divided by its revenue over the last twelve months, a valuation measure that works even when there are no profits.
Quick Ratio (Acid Test): The quick ratio divides a company's most liquid assets, meaning cash, marketable securities and receivables, by its current liabilities, leaving out inventory.
Revenue (Sales / Top Line): Revenue is the total amount a company earns from selling its goods and services in a period, before any costs are subtracted.
Reverse Stock Split: A reverse stock split combines several existing shares into one, raising the price per share in proportion without changing the company's total value.
ROA (Return on Assets): Return on assets is a company's net income divided by its total assets, showing how much profit it earns on everything it owns.
ROE (Return on Equity): Return on equity is a company's net income divided by its shareholders' equity: the profit it earns on the capital its owners have put in and left in the business.
ROIC (Return on Invested Capital): Return on invested capital is a company's after-tax operating profit divided by the debt and equity capital invested in its business.
Schedule 13D: Schedule 13D is the SEC filing required from any investor who acquires more than 5% of a company's voting shares with the intent to influence or control it.
Secondary Offering: A secondary offering is a sale of a public company's shares after its IPO, either new shares issued by the company or existing shares sold by large holders.
SPAC: A SPAC, or special purpose acquisition company, is a listed shell company that raises money in an IPO in order to merge with a private company and take it public.
Spinoff: A spinoff is when a company separates a division into a new, independent public company and distributes the new company's shares to its own shareholders.
Stock Buyback: A stock buyback is a company purchasing its own shares, in the market or through a tender offer, which reduces the number of shares outstanding.
Stock Split: A stock split divides each existing share into several new ones, cutting the price per share in proportion without changing the company's total value.
Tangible Book Value: Tangible book value is a company's book value minus goodwill and other intangible assets: the equity backed by physical and financial assets.
WACC (Weighted Average Cost of Capital): WACC is the average rate of return a company must pay its lenders and shareholders, weighted by how much of its capital each provides.

Structure

The order book, venues, market makers, settlement and short selling.

Algorithmic Trading: Using computer programs to decide when, how and in what size to place orders, from execution algorithms that work a large order to fully automated strategies.
Auction (Opening / Closing): A single-price batch match that US stock exchanges run at the open and the close, filling all eligible orders at the one price that executes the most shares.
Bid-Ask Imbalance: A lopsided order book in which the size resting on the bid is much larger or smaller than the size resting on the ask near the current price.
Borrow Fee (Stock Loan): The annualized rate a short seller pays to borrow shares, charged daily by the broker and set by supply and demand in the securities-lending market.
Closing Cross: The closing auction of a US stock's listing exchange, which matches market-on-close and other eligible orders at the 4:00 p.m. ET close and sets the official closing price.
Dark Pool: A private trading venue that matches buy and sell orders without displaying them beforehand, used mostly by institutions to trade large blocks with less market impact.
DOM (Depth of Market): A vertical price ladder that shows the resting bid and ask size at each price level around the market, often with one-click order entry.
Dumb Money: An informal, dismissive label for retail or late-arriving investors, used in contrarian analysis on the assumption that the crowd is most wrong at extremes.
ETF (Exchange-Traded Fund): An investment fund whose shares trade on a stock exchange like a single stock, usually holding a basket of securities that tracks an index.
Flash Crash: A very fast, deep fall in prices, often recovered within minutes or hours, that happens when liquidity vanishes and selling feeds on itself.
Front-Running: Trading ahead of a pending client order, or a known block trade, to profit from the price move that order will cause; illegal for brokers and others who owe the client a duty.
HFT (High-Frequency Trading): Automated trading by firms that use very fast systems to submit, cancel and execute large numbers of orders, holding positions for seconds or less.
Institutional Flow: Buying and selling by professional money managers such as mutual funds, pension funds, hedge funds and insurers, usually in large size worked over time.
Layering: A form of spoofing in which a trader stacks several non-genuine orders at different prices on one side of the book to fake depth, then cancels them after trading on the other side.
Level 1 Data: A basic real-time quote feed showing the best bid and ask with their sizes, the last trade, and the day's volume and price range.
Level 2 Data (Market Depth): A quote feed showing several price levels of bids and offers for a security, with the size at each level and, in many feeds, the venue or market maker that posted it.
Liquidity: How easily an asset can be bought or sold in size, quickly, without moving its price much.
Lit Market: A trading venue, usually a public exchange, that displays its resting orders and quotes before trades happen; the opposite of a dark pool.
Market Maker: A firm that continuously quotes both a price to buy and a price to sell a security and earns the spread between them in return for holding inventory risk.
Market Taker: A trader whose order executes immediately against a resting quote, removing liquidity from the book by buying at the ask or selling at the bid.
MiFID II: The European Union's revised Markets in Financial Instruments Directive, in force since January 2018, which governs how trading venues, brokers and investment firms operate in the EU.
NBBO (National Best Bid and Offer): The highest bid and the lowest offer for a US stock across all exchanges at a given moment, as published by the consolidated quote feeds.
Opening Cross: The opening auction of a US stock's listing exchange, which matches the orders gathered before the 9:30 a.m. ET open at one price and sets the official opening price.
Order Book: A live list of the buy orders (bids) and sell orders (asks) resting at each price for one security, ranked by price and then by time.
PFOF (Payment for Order Flow): Payment a broker receives from a wholesale market maker for sending it customers' orders to execute, common in US retail stock and options trading.
Price Discovery: The process by which buying and selling interest meets in a market and settles on a price that reflects the information available.
Reg NMS: The SEC's Regulation National Market System, adopted in 2005, which sets the core rules linking US stock exchanges into one national market.
Retail Order Flow: The stream of orders from individual investors trading through brokerage accounts, as opposed to orders from institutions.
Settlement (Equity): The final step of a stock trade, when the buyer's cash and the seller's shares actually change hands, one business day after the trade in the US (T+1).
Short Interest: The total number of a company's shares that have been sold short and not yet bought back, often shown as a percentage of the float.
Short Sale: Selling shares you have borrowed rather than own, in the hope of buying them back later at a lower price and returning them to the lender.
Short Squeeze: A sharp price rise driven by short sellers buying back shares to cut their losses, where each forced purchase pushes the price higher and forces more covering.
Smart Money: An informal label for investors assumed to be better informed or more skilled than the crowd, usually large institutions, company insiders and professional traders.
Spoofing: An illegal tactic of placing orders the trader intends to cancel before they execute, to create a false impression of supply or demand and move the price.
T+1 Settlement: The US settlement cycle under which most stock, ETF and corporate bond trades settle one business day after the trade date.
The Tape (Time & Sales): A running record of every trade printed in a security, showing the time, price, size and often the venue of each execution.
Trading Halt: A pause in trading in one stock or the whole market, ordered by an exchange or regulator for pending news, extreme price moves or a market-wide decline.
Wash Trading: Buying and selling the same security at the same time, or between accounts with the same owner, so that trades print without any real change in ownership.

Psychology

Biases, emotions and the discipline that keeps a plan intact.

Anchoring Bias: Anchoring bias is the tendency to rely too heavily on the first number seen, such as an entry price or a past high, when judging what something is worth.
Confirmation Bias: Confirmation bias is the tendency to seek out, notice and trust information that supports what you already believe while discounting evidence against it.
Decision Fatigue: Decision fatigue is the decline in decision quality that can follow a long stretch of making choices, leading to shortcuts, impulsive moves or avoidance.
Discipline (Trading): Trading discipline is the consistent execution of a tested plan, including entries, exits and position size, regardless of recent results or mood.
Disposition Effect: The disposition effect is investors' tendency to sell winning positions too early and hold losing positions too long.
Fear: Fear in trading is the anxiety about losing money that, when it overrides the plan, causes early exits, skipped setups and frozen decision-making.
FOMO (Trading): FOMO, the fear of missing out, is the urge to jump into a trade because a move is already under way and others seem to be profiting from it.
FUD (Trading): FUD, short for fear, uncertainty and doubt, is the anxious state, often fed by alarming news or rumors, that pushes traders to sell in a panic.
Gambler's Fallacy: The gambler's fallacy is the belief that a run of one outcome makes the opposite outcome more likely next, even when the events are independent.
Greed: Greed in trading is the drive for more profit than the plan calls for, which leads to oversized positions, ignored exits and chasing performance.
Herd Mentality: Herd mentality is the tendency to copy what the crowd is doing, buying because others are buying and selling because others are selling.
Loss Aversion: Loss aversion is the tendency to feel a loss roughly twice as strongly as a gain of the same size, a core finding of prospect theory.
Market Sentiment: Market sentiment is the overall mood of investors toward a market or asset, the balance of optimism and pessimism behind their buying and selling.
Overconfidence Bias: Overconfidence bias is the tendency to overestimate one's own skill, knowledge and the precision of one's forecasts, especially after a run of success.
Process vs Outcome Thinking: Process vs outcome thinking means judging a trade by the quality of the decision and how well the plan was followed, not by whether that single trade made money.
Prospect Theory: Prospect theory is Kahneman and Tversky's model of how people actually choose under risk, judging outcomes as gains or losses from a reference point rather than by final wealth.
Recency Bias: Recency bias is the tendency to give recent events more weight than the longer record, so the last few trades or market moves feel like the new normal.
Revenge Trading: Revenge trading is taking impulsive, often larger trades right after a loss in an attempt to win the money back quickly.
Risk Aversion: Risk aversion is a preference for a more certain outcome over a riskier one with the same or slightly higher expected value.
Risk Tolerance: Risk tolerance is how much loss and volatility a trader can bear, financially and emotionally, without abandoning the plan.
Sunk Cost Fallacy: The sunk cost fallacy is continuing a losing course because of money, time or effort already spent, instead of judging only the expected future outcome.
Tilt: Tilt is a state of frustration or anger, a term borrowed from poker, in which a trader's decisions get faster, larger and worse.
Trader Mindset: A trader mindset is a way of thinking that treats each trade as one outcome in a series of probabilities, puts process ahead of single results, and stays calm about losses.
Trading Journal: A trading journal is a record of every trade, with entry, exit, size, reasons, emotions and lessons, used to find what works and what leaks money.
Trading Plan: A trading plan is a written set of rules covering what to trade, when to enter and exit, how much to risk, and how performance is reviewed.

Strategy

Trend, mean reversion, swing, day trading and portfolio styles.

Active Management: A fund management approach that tries to beat a benchmark index by choosing which securities to own, in what weights, and when to trade.
Arbitrage: Buying and selling the same or equivalent assets in different markets or forms at the same time to lock in a price difference with little or no market risk.
Behavioural Finance: The study of how psychological biases and limits to arbitrage cause investors and prices to depart from what fully rational models predict.
Buy and Hold: An investing approach that buys assets and keeps them for many years, riding out short-term price swings rather than trying to time the market.
Carry Trade: A strategy that holds higher-yielding assets funded by lower-yielding ones to earn the yield difference, accepting the risk of a sudden price move against the position.
Day Trading: A trading style in which every position is opened and closed within the same session, so nothing is held overnight.
DCA (Dollar Cost Averaging): Investing a fixed amount of money at regular intervals regardless of price, so more shares are bought when prices are low and fewer when they are high.
Efficient Market Hypothesis (EMH): The theory, formalized by Eugene Fama, that asset prices reflect available information, so consistently beating the market after costs and risk is very hard.
Factor Investing: Building portfolios around characteristics, called factors, that research links to higher long-run returns, such as value, size, momentum, quality and low volatility.
Growth Investing: An investing approach that buys companies expected to grow revenue and earnings much faster than average, accepting high valuation multiples for that growth.
Index Investing: Investing in funds that hold all or a representative sample of a market index, such as the S&P 500, to earn the market's return at low cost.
Latency Arbitrage: A high-frequency strategy that profits from seeing price changes microseconds before slower participants and trading against quotes that have not yet updated.
Lump Sum Investing: Investing an available sum of money all at once, rather than spreading the purchase over time through dollar-cost averaging.
Margin of Safety: The discount between an investment's estimated intrinsic value and the price paid for it, kept as a buffer against errors in the estimate and bad luck.
Mean Reversion: A strategy that bets prices which have moved far from a recent average will move back toward it, buying weakness and selling strength.
Modern Portfolio Theory in Practice: Applying Harry Markowitz's mean-variance framework to build real portfolios, choosing asset weights that give the best expected return for a chosen level of risk.
Momentum Strategy: A strategy that buys assets with the strongest recent returns and avoids or shorts those with the weakest, betting that relative performance persists for several months.
Pairs Trading: A market-neutral strategy that buys one asset and shorts a closely related one when the price gap between them is unusually wide, betting the gap will narrow.
Passive Management: A fund management approach that tracks a market index at low cost rather than trying to beat it through security selection or timing.
Pattern Day Trader (PDT) Rule: A FINRA margin rule that flags an account as a pattern day trader after four or more day trades in five business days and then requires at least $25,000 of equity to keep day trading.
Position Trading: A trading style that holds positions for weeks to months to capture a major trend, using daily and weekly charts and often fundamentals.
Quant Trading: Trading driven by quantitative models that turn data into rules for what to buy or sell, how much and when, with the rules tested statistically before they are used.
Rebalancing: Bringing a portfolio back to its target weights by selling what has grown above target and buying what has fallen below it.
Risk Parity: A portfolio construction method that sizes each asset class so that each contributes an equal share of total portfolio risk, rather than an equal share of capital.
Scalping: A very short-term trading style that takes many small profits from moves of a few ticks or cents, holding each position for seconds to minutes.
Sector Rotation: A strategy that shifts money among stock market sectors according to the stage of the economic cycle or relative strength, favoring the sectors expected to lead next.
Smart Beta: Index funds that select or weight stocks by rules other than market capitalization, such as equal weight, value, momentum, dividends or low volatility, to tilt toward chosen factors.
Statistical Arbitrage (Stat Arb): A quantitative strategy that holds many long and short positions chosen by statistical models to profit from small, short-lived mispricings while staying close to market-neutral.
Strategic Asset Allocation: A long-term target mix of asset classes, such as 60% stocks and 40% bonds, chosen from an investor's goals, horizon and risk tolerance and kept through market cycles.
Swing Trading: A trading style that holds positions for a few days to a few weeks to capture one price swing within a trend or a range.
Tactical Asset Allocation: Temporarily shifting a portfolio away from its long-term asset weights to take advantage of expected short- to medium-term opportunities, then returning to the target.
Trend Following: A strategy that buys assets in sustained uptrends and sells or shorts those in downtrends, holding until the trend ends instead of predicting tops and bottoms.
Turtle Trading System: A mechanical trend-following system of channel breakouts and volatility-based position sizing that Richard Dennis and William Eckhardt taught to novice traders in 1983 and 1984.
Value Investing: An investing approach that buys securities priced below an estimate of their intrinsic value, based on assets, earnings or cash flows, and waits for the market to close the gap.