Plain-language definitions for the terms you'll actually hear in stock trading — from the everyday basics to small-cap momentum. 319 terms and counting. No jargon for jargon's sake — written for beginners, starting with the one this whole site is named after.
Last updated July 17, 2026
Expecting a price to rise. If you're bullish on a stock, you think it's heading higher and you position to profit from that move. The opposite is bearish (expecting a fall). The term comes from how a bull attacks — horns thrust upward. It's the whole idea behind this site: finding setups with room to run. (Being bullish is a thesis, not a guarantee — plenty of bullish setups still fail.)
See also: Bearish · Long · Bull market · Call
The day's price move as a percentage of the prior close — the number momentum traders scan first, since a small-cap up 60% is what flags a stock in play. A +$1 move means very different things on a $2 stock versus a $200 one.
See also: Change · Gapper · Relative volume
The highest price a stock has traded over the past year. Breaking to new 52-week highs means no overhead resistance from recent buyers — momentum traders read fresh highs as strength, though they can also mark exhaustion near the top.
See also: 52-week low · Breakout · Resistance
The lowest price a stock has traded over the past year — the mirror of the 52-week high. Fresh lows signal heavy selling; some traders avoid them outright, others watch for a capitulation bounce.
See also: 52-week high · Support · Breakdown
A trade that meets every criterion on your checklist, not most of them. The point isn't the grade — it's having a fixed bar you set before the market opened, so a chart that merely looks exciting can't talk you into full size. Kev's Trade Momentum version uses five: price above VWAP, 9 EMA above the 20 EMA, float under 20 million shares, clean price action, and range on the daily chart. Miss one and you reduce size and risk, or pass. Checking all five doesn't make a trade work; it just means you didn't skip your own rules to take it.
See also: Confluence · Bull flag · VWAP reclaim · Range
The total capital in your trading account — the base figure your position sizing and risk limits are calculated from. A trader risking 1% per trade risks a very different dollar amount on a $5,000 account than on a $50,000 one, even with the identical setup.
See also: Position size · Capital · Buying power · Daily max loss
Trading after the regular close — 4:00 PM–8:00 PM ET. Thinner volume and wider spreads; news dropped after the bell often moves a stock here first.
See also: Premarket · Overnight · Market hours
An automated notification that fires when a condition you set is met — a price level touched, a volume spike, a scan match. An alert tells you something happened; it does not tell you to buy. It lets you watch many names at once without staring at every chart — what you do when it fires is still your call.
Short for algorithm — an automated program that places trades by rules or code, with no human clicking each order. Much of the market's daily volume is algo-driven.
See also: Systematic trading · Signal · Backtest
The return a trade or strategy earns above a relevant benchmark, after accounting for the risk taken. If the market returns 10% and your account returns 15% on comparable risk, that extra 5% is your alpha — the part you can credit to skill or edge rather than just riding the market. It's the flip side of beta, which measures how much you simply move with the market. Real, repeatable alpha is hard to produce, which is why most traders don't beat a simple index over time.
See also: Beta · Market sentiment
The ask price (or 'offer') — the lowest price a seller is currently willing to accept. You generally buy at the ask.
Anything you own that holds value — stocks, cash, crypto, real estate. In a brokerage account your assets are the cash plus the current value of every position you hold.
The flip side of exercise, from the seller's chair: when an option you sold gets exercised, you're assigned and must deliver — buy the shares (if you sold a put) or sell them (if you sold a call). It can hit any time an option is in-the-money, not just at expiration, and it's the risk that makes selling options more than free premium.
See also: Exercise · Writer · Covered call
An option whose strike sits right at (or nearest) the current stock price. ATM options have no intrinsic value — the premium is all extrinsic (time + volatility) — so they carry the most time value and the fastest theta decay. Not to be confused with an ATM offering, a stock-financing term.
See also: Moneyness · Extrinsic value · Strike price
A way for a company to sell new shares gradually, straight into the open market at current prices, rather than all at once. Common with small-caps raising cash — it can quietly cap a runner as fresh supply meets demand. Not to be confused with an at-the-money (ATM) option, where a contract's strike sits right at the stock price — a completely different use of "ATM."
See also: Secondary offering · Dilution · S-1
A 0–100 gauge of how strong a trend is — not its direction. Readings above about 25 suggest a trending market worth trading with the trend; low readings flag the kind of chop momentum traders avoid.
See also: Trend · ATR · Parabolic SAR
Buying more of a position you are already down on, at a lower price, to pull your average cost basis lower — so the stock needs a smaller bounce to get you back to break-even. It can rescue a sound thesis that simply dipped, but done reflexively it just pours more size into a losing trade, the opposite of cutting losses. Momentum traders generally avoid averaging down into a fading runner: the reason you entered is usually already broken.
See also: Cost basis · Bag holding · Position size
A volatility measure: the average size of a stock's range over a lookback period. It gives no direction — traders use it to size stops and targets to how much a stock typically moves, so a wider-ranging name earns more room.
See also: Volatility · Stop loss · ADX
Running a strategy against historical data to see how it would have performed before you risk real money on it. A useful sanity-check, but past results can flatter a strategy — markets change, and a backtest can't capture slippage, emotions, or thin liquidity.
See also: Systematic trading · Expectancy · Win rate
Hanging onto a deep-losing position long past your plan, hoping it climbs back to break-even instead of taking the loss — you are left "holding the bag." A bagholder is the trader stuck in a position that has fallen far below cost, often after a pump fades or a thesis breaks. It is one of the most common ways a small, manageable loss quietly becomes an account-denting one.
See also: Average down · Cost basis · Capitulation · Bias
A snapshot of what a company owns (assets), what it owes (liabilities), and what's left for shareholders (equity) at a point in time. It answers "how financially solid is this company?" For small-caps, the line that matters most is often cash — how much is left before they need to raise more.
See also: Income statement · Cash flow statement · Cash burn
A continuation pattern in a downtrend: a sharp drop (the flagpole) followed by a slow, slightly upward drift that forms the flag, before price breaks down again to continue lower. The drift is just weak buyers catching a breath against a falling stock; when support at the bottom of the flag gives way, sellers take back over. It's the mirror image of a bull flag — same shape, opposite direction — and short sellers watch for the breakdown the way long traders watch a bull flag's breakout.
A prolonged market-wide decline — conventionally a drop of 20% or more from a recent high, measured on a major index like the S&P 500 rather than a single stock. The opposite of a bull market. Small-cap momentum can still produce sharp moves in a bear market, but tailwinds are thinner and failed breakouts more common, so the broader tape matters more than usual.
See also: Bull market · Bearish · Capitulation
Expecting a price to fall. A bearish trader thinks a stock is heading lower — the opposite of bullish.
See also: Bullish · Short · Bear market · Put
A measure of how much a stock moves relative to the overall market (usually the S&P 500). A beta of 1.0 moves roughly in line with the market; above 1.0 is more volatile (1.5 tends to swing about 50% more than the market), below 1.0 is calmer, and a negative beta tends to move opposite. High-beta names amplify both the upside and the pain — the small-cap momentum stocks traders chase effectively live at the high-beta extreme.
See also: Alpha · VIX · Volatility
Your working lean on direction — bullish or bearish — heading into a trade or a session, formed from the catalyst, the chart, and the broader market. A useful starting point, but holding a bias too rigidly is how traders end up fighting what price is actually doing.
See also: Conviction · FOMO · Chasing · Trading psychology
The bid price — the highest price a buyer is currently willing to pay right now. You generally sell at the bid.
A large, well-established, financially sound company that leads its industry — the term borrows from the highest-value chip in poker. Blue chips are relatively stable and slow-moving, the opposite end of the spectrum from the low-float small-caps momentum traders hunt. Worth knowing even if you rarely trade them: when people say "the market," they often mean baskets of blue chips.
See also: Stock · Small-cap · Penny stock · Market cap
A moving average with two bands plotted a set number of standard deviations above and below it. The bands widen when volatility rises and pinch in when it falls; price riding or poking outside a band is a common volatility read.
See also: Moving average · Volatility · Overbought
Two senses, same idea of something giving way. As a chart setup: price breaking down through support on volume — the bearish mirror of a breakout, and a common short trigger. In a journal: a breakdown in execution — abandoning your own plan (chasing, oversizing, moving a stop) — the kind of process failure worth logging so it doesn't repeat.
The stock price at which an option trade turns profitable at expiration, premium included. For a long call it's the strike plus the premium; for a long put, the strike minus the premium. It's why a slightly out-of-the-money option needs the stock not just to move, but to move enough to clear what you paid.
See also: Strike price · Premium
When price pushes through a level it had been stuck under (resistance) on rising volume, often kicking off a fast move.
See also: Breakdown · Resistance · Consolidation · Support/resistance flip
The firm that holds your account and routes your buy and sell orders to the market — you can't trade stocks without one. Brokers differ on platform speed, fees, shares available to short, and which order types and tools they support. I keep accounts with several brokers, but my favorite is Webull. Check out my broker comparison page for the top 10 online brokers.
See also: Cash account · Margin account · Commission · Order routing
A continuation pattern: a sharp run up (the pole), then a tight, slightly downward drift on lighter volume (the flag), before another leg higher. Momentum traders like it because the flag offers a clean entry with a tight stop just beneath it.
A prolonged market-wide rise — conventionally a gain of 20% or more from a recent low on a major index. It is the backdrop most momentum strategies prefer: rising indices, healthy risk appetite, and more setups that actually follow through. The opposite of a bear market. (Bullish, lowercase, is your stance on a single stock; a bull market is the whole market's trend.)
See also: Bear market · Bullish · Rally
The four options order verbs that spell out whether you're entering or exiting, and on which side. Buy to open starts a long position; sell to close exits it. Sell to open starts a short (written) position; buy to close exits it. Choosing the right one tells the broker whether you're opening new risk or flattening what you already hold.
See also: Open interest · Position
The dollar amount you can put to work right now. In a cash account that's your settled cash; in a margin account it's cash plus borrowed funds, and since the 2026 rule change it updates in real time through the day.
See also: Margin account · Leverage · Account size · Margin call
An option that gives the buyer the right — not the obligation — to buy 100 shares of the underlying at a set strike price before expiration. You buy calls when you expect the stock to rise: a small premium controls 100 shares, so the move is leveraged. The bullish side of options; the seller (writer) collects the premium and must deliver shares if assigned.
See also: Put · Strike price · Premium · Assignment
A single bar on a candlestick chart that captures four prices for one period: the open, high, low, and close. The thick body runs open-to-close — green when it closed higher, red when lower — and the thin wicks above and below mark the high and low. It's the basic unit a chart is read in.
See also: Chart types · Doji · Wick · Green and red
The money you have available to put to work — in trading, the cash in your account you can actually deploy into positions. “Preserving capital” (not losing it) is the first job; growing it is the second.
See also: Account size · Buying power · Position size
The point where a falling stock's holders finally give up all at once — selling in a panic rush that spikes volume and often marks a near-term bottom. With the weak hands flushed out, a sharp bounce frequently follows. Traders watch for the classic signature: a steep, high-volume sell-off and a long lower wick where buyers finally stepped in.
See also: Reversal · Dead cat bounce · Bag holding · Bear market
A brokerage account that trades only with money you've actually deposited — no borrowing. Sale proceeds must settle (T+1, the next business day) before you can reuse them, but there's no margin and no margin risk.
See also: Margin account · Settled cash · Broker
How fast a company spends cash (burn), and how long its remaining cash will last (runway). Critical for small-caps: a company burning cash with only a few months of runway is likely to raise money soon — which usually means dilution. Low runway is one of the biggest reasons a hot small-cap suddenly files an offering.
See also: Balance sheet · Dilution · Revenue
A financial statement tracking the actual cash moving in and out of a company — from operations, investing, and financing. Unlike the income statement (which includes non-cash items), it shows real money. For small-caps, the financing section reveals how a company is funding itself: through operations, or by selling shares and taking on debt.
See also: Balance sheet · Income statement · Revenue
The news or event that gives a stock a reason to move: earnings, an FDA decision, a contract, an offering. Momentum traders want a clear catalyst behind a runner.
How much a stock's price has moved from a reference point — usually the prior close — in dollars and cents (e.g., +$0.42). Shown alongside % change to put the move in context.
See also: % Change · Last price · Price
The visual record of a stock's price over time and the trader's main workspace. Candles show each period's open, high, low, and close; overlays like VWAP ride on top.
See also: Chart types · Candlestick · VWAP · Time interval
The different ways price can be drawn on a chart. A line chart connects closing prices — simplest, least detail. A bar (OHLC) chart shows the open, high, low, and close of each period. A candlestick chart shows the same four points but as a body and wicks, making direction and momentum easier to read at a glance — which is why most active traders use it.
See also: Candlestick · Chart · Time interval
Buying after a stock has already made a big, fast move — jumping in late on FOMO, usually right as it gets extended. The danger is that you become the exit liquidity for traders who got in earlier: a missed trade costs nothing, a chased one can cost a lot.
See also: FOMO · Chat pump · Revenge trading
A fast, artificial spike driven by a trading chat room, Discord, or Telegram group piling into the same ticker at once, rather than by real news. The "catalyst" is the crowd itself, so the move tends to collapse as fast as it spiked once the room takes profits. Think of it as the method; pump and dump is the full scheme — quietly accumulate, hype, then dump on the buyers. The tell for a momentum trader: a runner with no findable catalyst — if the only reason it's moving is a chat room, you may be the exit liquidity.
See also: Pump and dump · Meme stock · Sympathy play
Price action that's erratic and directionless — overlapping candles, false moves, and no clean trend to ride. Choppy conditions chew up momentum traders, so many simply sit out until price picks a direction.
See also: Consolidation · Fakeout · Trend
Exiting a trade — selling a long or buying back a short — to lock in the profit or loss. 'Close all' or 'flatten' means exiting every position at once.
See also: Position · Take profit · Stop loss
The fee a broker charges to place a trade. Many brokers now charge $0 commission on U.S. stocks, but other costs — the spread, plus regulatory and routing fees — still apply.
A raw physical good traded in bulk and largely interchangeable — crude oil, gold, natural gas, wheat, copper. Commodities trade mostly through futures contracts and ETFs rather than as company shares, and they answer to their own drivers (supply, weather, geopolitics) more than to earnings. Most stock traders do not trade them directly, but they matter as context: oil moves energy stocks, gold reflects fear, and big commodity swings ripple into the sectors that depend on them.
When several independent signals agree at the same time — say price reclaiming VWAP as a bullish candle prints on a volume spike. Any one signal can be noise, but the odds that several unrelated ones line up by accident are low, so more agreement means a higher-probability setup — never a certainty. It shows up in three forms that layer up: on one chart (single-timeframe), at one price (multipoint), and across timeframes (top-down).
See also: Multipoint confluence · Top-down analysis · Support/resistance flip
A pause where price trades sideways between rough upper and lower bounds instead of trending. A “range on the daily” is one of the A+ checklist boxes.
How strongly a setup matches your criteria. Higher conviction usually means a larger, more confident position; lower conviction means smaller size or passing.
See also: Bias · Trading plan · Trading psychology
What you actually paid for a position — your entry price times shares, plus fees. It is the baseline every gain or loss is measured against: market value minus cost basis is your unrealized P&L, and it is the figure that matters at tax time. Averaging into a position blends your cost basis across the fills.
See also: P&L · Average down · Short-term capital gains
Buying back shares you sold short to close the position — "buy to cover." It returns the borrowed shares to your broker and locks in your gain or loss. When many short sellers are forced to cover at once — squeezed by a sharp move against them — their combined buying adds fuel to the rally, a key engine of a short squeeze.
See also: Short selling · Short · Close
Selling a call against 100 shares you already own — you collect the premium as income in exchange for capping your upside at the strike (if the stock runs past it, your shares get called away). The most common beginner options strategy, because the shares cover the obligation, so there's no naked risk.
See also: Call · Premium · Assignment · Naked
A bullish continuation pattern shaped like a teacup: a rounded "cup" where price dips and recovers, followed by a small pullback (the "handle") before a breakout. The handle is the low-risk entry; the breakout above the rim is the trigger. A classic base — but like all patterns, it needs volume on the breakout to mean anything.
See also: Breakout · Consolidation · Bull flag
A hard cap on how much you'll let yourself lose in one day — a preset dollar or R figure that ends your session the moment it's hit, no matter what. It's the rule that stops one bad morning from becoming a blown account; many traders treat it as non-negotiable.
See also: Risk management · Revenge trading · Stop loss
An order that is only good for the current trading session — if it does not fill by the close, it cancels automatically. It is the default order duration at most brokers. The opposite is a Good Till Cancelled (GTC) order, which carries from day to day until it fills or you cancel it. For active intraday traders, day orders are usually what you want, since you are re-evaluating every session anyway.
See also: Time in force · Good Till Cancelled order · Order
Buying and selling within the same session so nothing is held overnight — the whole trade plays out intraday, opened and closed before the bell. Avoids overnight risk.
See also: Scalping · Swing trading · PDT rule · Focus window
A short, sharp rally inside a larger downtrend that fools traders into thinking the bottom is in — before the stock rolls over and keeps falling. The grim name comes from the idea that even a dead cat bounces if it drops far enough. The danger is buying the bounce as a reversal when it is really just a pause; confirmation — higher volume, a real base, reclaimed levels — is what separates a genuine turn from a dead-cat bounce.
See also: Reversal · Capitulation · Fakeout
The Greek that measures how much an option's price moves for a $1 move in the stock. A delta of 0.60 means the option gains about $0.60 when the stock rises $1. Calls have positive delta (0 to 1), puts negative (0 to -1). Delta also doubles as a rough read of the odds the option finishes in-the-money, and of how many shares it behaves like (0.60 delta — about 60 shares).
See also: Moneyness · In-the-money · Gamma
When a company issues new shares to raise cash (an offering, often filed as an S-1 or S-3). More shares can push the price down by spreading value across a larger float.
See also: Secondary offering · S-1 · ATM Offering · IPO
A setup that lets you send orders straight to a specific exchange or market venue yourself, rather than letting the broker route them for you. Direct-access platforms (the kind active traders use for speed and control over routing) contrast with app-style brokers that route orders on your behalf. Sometimes abbreviated DMA — not to be confused with a displaced moving average.
See also: Order routing · PFOF · Level 2 · Execution
Trading on judgment rather than a fixed rulebook — you read the catalyst, the chart, and the tape in the moment and decide, so two similar-looking setups can get treated differently. It is the opposite of systematic trading, where the rules make the call. Most retail momentum trading is discretionary, which is exactly why a written plan and hard risk limits matter: the judgment that gives you an edge is the same judgment that can talk you into a bad trade.
See also: Systematic trading · Trading plan · Conviction
An ordinary moving average shifted forward or back on the chart. Shifting it forward can make it hug price better as dynamic support/resistance; the trade-off is added lag in the signal.
See also: Moving average · Simple moving average · Exponential moving average
When price and an indicator disagree. If a stock makes a higher high but an indicator like RSI or MACD makes a lower high, that's bearish divergence — momentum is fading even as price climbs. The reverse (price lower, indicator higher) is bullish divergence. A heads-up, not a trigger: divergence can persist far longer than you'd expect.
See also: RSI · MACD · Momentum indicator
A slice of profit a company pays out to its shareholders, usually quarterly and quoted per share. Dividend yield expresses that as a percentage of the share price — a $2 annual dividend on a $50 stock is a 4% yield. Dividends are a hallmark of mature, profitable companies; the fast-moving small-caps momentum traders trade rarely pay them. Two things worth knowing: a stock typically drops by about the dividend amount on its ex-dividend date, and an unusually high yield can be a warning sign that the payout is at risk.
See also: EPS · Blue-chip stock · P/E ratio
A candlestick whose open and close land at almost the same price, leaving a tiny body with wicks on one or both sides. It's a picture of indecision: buyers and sellers fought to a draw over that period. On its own a doji means little, but after a strong run or drop it can hint that momentum is stalling and a reversal may be near — especially when the next candle confirms the turn.
See also: Candlestick · Dragonfly doji · Gravestone doji · Spinning top
A bullish reversal shaped like a W: price drops to a low, bounces, pulls back to roughly the same low (the second bottom), then breaks out above the middle peak. The matching lows suggest sellers are exhausted; the breakout over the peak confirms it.
See also: Double top · Reversal · Support
A bearish reversal pattern where price hits the same resistance level twice and fails both times, forming an "M." It signals buyers couldn't break through, and a drop below the middle low confirms it. The mirror image of a double bottom.
See also: Double bottom · Reversal · Resistance
A doji (open and close nearly equal) with a long lower wick and little to no upper wick — it looks like a T. Appearing after a decline, it hints buyers stepped in at the lows and a bounce may follow. Like any single candle, it's a clue, not a command — wait for the next candle to confirm.
See also: Doji · Gravestone doji · Hammer · Long-legged doji
A drop in your account from a recent peak, usually shown as a percentage — the dip in the equity curve between high-water marks. Everyone has them; what matters is keeping them shallow enough to recover from. Distinct from a single trade's loss — drawdown is the cumulative slide.
See also: Max drawdown · Recovery · Equity curve · Risk management
A company's quarterly report of its profits, revenue, and guidance. Earnings are one of the biggest scheduled catalysts: a beat, a miss, or the forward outlook can gap a stock hard at the next open. Earnings season is the cluster of weeks each quarter when most companies report, so the calendar fills with catalysts. Many day traders avoid holding through the actual report — it is a binary, overnight event — and instead trade the reaction.
The SEC's free public database where every company filing lives — 8-Ks, 10-Ks, S-1s, Form 4s, and the rest. If you want to read a filing yourself instead of trusting a headline, EDGAR is the primary source.
A two-candle pattern where the second candle's body completely swallows the first. A bullish engulfing (green body engulfing a prior red) shows buyers took control — common at pullback bottoms and VWAP reclaims. A bearish engulfing (red engulfing green) shows sellers took over, often the first sign a runner is done.
See also: Harami · Piercing line · Reversal
A company's profit divided by its shares outstanding — profitability on a per-share basis, and one of the most-quoted fundamental numbers. It is the "E" in the P/E ratio. Rising EPS is read as a healthier business; a quarterly EPS that beats or misses analyst estimates is often what moves the stock when earnings drop.
A running chart of your account value (or cumulative R) over time — the clearest single picture of whether you're improving. Smooth and up-and-to-the-right is the goal; jagged or sideways flags inconsistency. The curve on this site is plotted in R.
See also: Drawdown · Profit factor · Streak
A basket of assets — often stocks tracking an index, sector, or theme — that trades on an exchange like a single stock: one ticker, all day, at a live price. ETFs give instant diversification at usually low cost, and the most popular ones, SPY (the S&P 500) and QQQ (the Nasdaq-100), are among the most heavily traded tickers in the entire market. Most are plain index funds, but they come in flavors: sector, bond, commodity, and the riskier leveraged and inverse kinds.
See also: Leveraged ETF · Stock index
The marketplace where shares are listed and trades are matched — the NYSE and Nasdaq are the two big U.S. stock exchanges. Your broker routes your order to an exchange (or similar venue) to get it filled.
See also: NYSE · NASDAQ · Stock market
The moment your order actually gets filled in the market — the hand-off from "I want to trade" to "I am in (or out)." Execution quality is how close your fill lands to the price you expected, and it depends on liquidity, speed, the spread, and how your broker routes the order. Poor execution shows up as slippage; for active traders, a fast and reliable platform is part of the edge.
See also: Fill · Slippage · Order routing · Direct Market Access
Invoking an option's right — a call holder buys the 100 shares at the strike, a put holder sells them. Most traders never exercise; they close the option for its premium instead, since exercising throws away any remaining extrinsic value. In-the-money options are auto-exercised at expiration by most brokers.
See also: Assignment · Holder · Strike price · Expiration date
What you can expect to make per trade on average, in dollars or R: (win rate × average win) − (loss rate × average loss). Positive expectancy means the system makes money over enough trades — it ties win rate and average R into one honest number.
See also: Win rate · Profit factor · R · Kelly %
The date an option contract dies. After it, the option is either exercised (if in-the-money) or expires worthless. Standard monthlies expire the third Friday; weeklies and dailies also trade. As expiration nears, extrinsic (time) value drains faster — the theta decay that works against option buyers.
See also: Theta · Extrinsic value · Exercise
A moving average that weights recent prices more heavily than older ones, so it hugs price and turns faster than a Simple Moving Average (SMA). That responsiveness makes it the momentum trader's default: the 9, 20, and 50 EMAs are common reference lines — the 9 above the 20 with price holding above the 50 is a bullish alignment. The tradeoff for speed is more false turns when price gets choppy.
See also: Moving average · Simple moving average · VWAP
The part of an option's premium beyond its intrinsic value — also called time value. It reflects how much time is left and how volatile the stock is (implied volatility). It bleeds away as expiration nears (theta decay) and can collapse after a catalyst (IV crush). At- and out-of-the-money options are all extrinsic value.
See also: Intrinsic value · Theta · Implied volatility · IV crush
A move that looks like a real breakout (or breakdown) but immediately reverses, trapping everyone who entered on the break. It often shows up as a push past a level on weak volume that snaps right back — the reason disciplined traders wait for confirmation instead of the first poke through.
See also: Breakout · Choppy · Dead cat bounce
The original, more sensitive form of the stochastic — %K with little smoothing — so it reacts faster and whipsaws more. The “slow” stochastic smooths it to cut that noise.
See also: Stochastic Oscillator · Overbought · Williams %R
Horizontal levels drawn at set percentages of a prior move — notably 38.2%, 50%, and 61.8% — where a pullback might stall before the trend resumes. Widely watched, partly self-fulfilling, and best paired with other confirmation.
See also: Support · Resistance · Pullback
The execution of your order — and the filled price is the price you actually got, which can differ from what you saw when you clicked (see slippage). A partial fill means only some of your shares executed; the rest stays working or gets cancelled.
See also: Execution · Slippage · Order status · Limit order
The Financial Industry Regulatory Authority — the self-regulatory body that oversees U.S. brokers and writes the margin rules, including the former Pattern Day Trader rule.
See also: SEC · PDT rule · Margin account
The number of shares actually available for the public to trade, excluding insider-locked shares. A low float (say, under 20M) can move violently because a little buying pressure goes a long way.
See also: Low-float · Float rotation · Shares outstanding · Short squeeze
When a stock's daily volume equals or exceeds its entire float — the available shares have effectively turned over at least once. A sign of intense activity. Measured by turnover.
See also: Float · Turnover · Relative volume · Low-float
The slice of the session you commit to actively trading — for many day traders the 9:30–11:00 a.m. ET window, when volume, volatility, and clean moves are richest. Defining one keeps you from overtrading the dead, choppy midday hours where edges thin out.
See also: Day trading · Overtrading · Trading plan
The Federal Open Market Committee — the Federal Reserve group that sets the direction of U.S. interest rates. It meets eight times a year, and the announcement (typically 2:00 PM ET, followed by a press conference) is one of the most reliable volatility events on the calendar: the whole market can whipsaw violently in minutes. Many short-term traders size down, sit out the initial spike, or wait for the dust to settle rather than guess the reaction.
See also: Catalyst · Volatility · Market sentiment
Fear of missing out: chasing a move after it's already run because you don't want to be left behind. A common reason traders abandon their own rules.
See also: Chasing · Revenge trading · Bias · Trading psychology
The foreign exchange market — trading one currency against another (EUR/USD, USD/JPY, and so on). It is the largest and most liquid market in the world, runs roughly 24 hours a day five days a week, and is quoted in pairs with often very high leverage. A different instrument from stocks, but the chart-reading and risk discipline carry over; the outsized leverage is what tends to hurt beginners.
Reports when a company insider (an officer, director, or major shareholder) buys or sells the company's stock, due within two business days. Insider buying can signal confidence; heavy insider selling can be a warning.
A filing a company submits to the SEC to announce a major event — earnings, a merger, a new contract, a CEO change — usually within four business days. For a momentum trader, an 8-K is often the catalyst: it's the news that makes a stock gap and run.
A company's audited annual report to the SEC — the full picture of its finances, risks, and operations for the year. More thorough than a 10-Q, and the definitive source for a company's fundamentals.
See also: Form 10-Q · Balance sheet · EDGAR
A company's quarterly report to the SEC — unaudited financials covering three months. Lighter than the annual 10-K, but it's where quarterly earnings and updated numbers first show up officially.
A notice an insider files before selling restricted or control shares. Think of it as a heads-up that insider selling may be coming — the bearish counterpart to the buying you'd spot on a Form 4.
Sizing up a stock by the business behind it — revenue, earnings, debt, growth, management, the industry — to estimate what it is worth, rather than reading the chart. It is the counterpart to technical analysis: fundamentals ask "is this a good company at a fair price?" while technicals ask "what is price doing right now?" Momentum and day traders lean heavily technical, but fundamentals still drive the catalysts, like earnings and guidance, that set stocks moving.
See also: Technical analysis · Balance sheet · EPS · P/E ratio
Contracts to buy or sell an asset at a set price on a future date, regulated by the CFTC rather than the stock rules. Often used for index or commodity exposure; like options, more advanced than buying shares.
The Greek that measures how fast delta itself changes as the stock moves — the acceleration behind delta. Gamma is highest near the strike and near expiration, where a small stock move can swing delta (and your exposure) quickly. Not the same as a gamma squeeze, which is a market event driven by dealers hedging their gamma.
See also: Delta · Gamma squeeze
A sharp upward spike driven by the options market rather than by short sellers covering. When traders buy large amounts of call options, the market makers who sold those calls hedge by buying the underlying stock — and the faster the stock rises, the more they must buy, which pushes it higher still. That feedback loop is the gamma squeeze. It often runs alongside a short squeeze (the two amplified each other in names like GME), but the engine here is options hedging, not short covering.
See also: Short squeeze · Gamma · Delta · Meme stock
A stock that gaps up on a catalyst at the open and keeps going rather than fading. Traders want the first push to hold above the premarket high or opening range on strong volume — the bread-and-butter momentum play on a green premarket.
See also: Gapper · Premarket · Opening range break
When price retraces to fill the empty space a gap left behind, trading back to the prior session's close. A gap up that fills is a move down; a gap down that fills is a move up — so the direction depends on the gap. Some traders fade gaps expecting the fill; others wait to see if it holds.
A stock that opens meaningfully higher (or lower) than its prior close, usually on overnight news. Premarket gappers are a core momentum scan.
An order that stays working until it fills or you cancel it, instead of expiring when the session ends. The opposite is a day order, which dies at the close if it has not filled. GTC is useful for resting a limit order at a target price you do not want to babysit — though most brokers auto-expire them after 30 to 90 days, and a resting order can quietly fill on a fast spike you would rather have skipped.
See also: Day order · Time in force · Order
A doji with a long upper wick and little to no lower wick — the mirror of a dragonfly. After a run, it signals buyers pushed price up but sellers slammed it back to the open: a bearish exhaustion warning. Same rule as always — confirmation over conviction.
See also: Doji · Dragonfly doji · Shooting star
The universal color code: green = up / gaining, red = down / losing — on candles, tickers, and your P&L. A green candle closed above its open; a red one closed below.
See also: Candlestick · Green day · Wick
A green day is a session you finished net profitable; a red day, net negative. The ratio of green to red days is a simple health metric, and a string of red days is a common journaling cue to size down or step back. (Distinct from the green/red color code on candles and tickers.)
See also: Streak · P&L · Daily max loss
A company's own forecast for its future results — revenue, earnings, or growth for the coming quarter or year. Guidance often moves a stock more than the reported numbers themselves: a company can beat on earnings but sell off on weak guidance, or miss but rip higher on a strong outlook. It's the forward-looking half of an earnings report.
Entering with half (1/2) of your normal position size — a middle gear between a full-conviction trade and a quarter-size probe, used to take a setup you like but want to keep lighter risk on.
See also: Quarter size · Position size · Scaling in
A temporary trading pause triggered when a stock moves too far too fast (Limit Up–Limit Down) or pending news. Trading resumes after a short cooldown.
See also: Short sale restriction · Volatility · Level 2
A single candlestick that can mark the end of a downtrend: a small body up near the top with a long lower wick, like a hammer. The long tail shows price sold off hard during the period but buyers stepped in and drove it back up before the close — a shift in control from sellers to buyers. It carries the most weight at the bottom of a clear decline; flipped upside down at the top of a run, the same shape is a shooting star and warns of the opposite.
See also: Inverted hammer · Hanging man · Doji · Wick
The same shape as a hammer — small body, long lower wick — but appearing at the top of an uptrend instead of after a decline. There it's a warning: sellers tested lower and, even though price recovered, the pressure showed up. Shape plus location is the whole lesson: same candle, opposite meaning.
See also: Hammer · Shooting star · Inverted hammer
A two-candle pattern where a small body sits entirely inside the prior candle's larger body — the move is pausing. A bullish harami (small green inside a big red) hints the downtrend is stalling; a bearish harami hints an uptrend is. Often precedes a squeeze or a fail, so traders wait for the break.
See also: Engulfing candle · Doji · Spinning top
A bearish reversal pattern: three peaks, with the middle one (the "head") higher than the two on either side (the "shoulders"). A break below the "neckline" connecting the lows signals the uptrend may be over. Flip it upside down and it's an inverse head and shoulders — a bullish reversal.
See also: Reversal · Double top · Support/resistance flip
A pooled investment fund for institutions and wealthy investors that chases returns with aggressive, lightly-regulated strategies — leverage, short selling, derivatives, concentrated bets. They typically charge a management fee plus a slice of the profits (the classic "2 and 20"). They matter to retail traders because they are often the big money on the other side of the tape — the 2021 GameStop squeeze famously ran over funds that were heavily short.
See also: Short selling · Market maker · Alpha
The highest price a stock has traded so far in the current session (its mirror is the low of day, LOD). Momentum traders watch it closely — a stock printing fresh HODs is showing strength, and a clean break above HOD on volume is a common long trigger.
See also: Resistance · Breakout · VWAP
Automated trading run by firms using powerful computers to place huge numbers of orders in fractions of a second, profiting from tiny price differences. HFT provides much of the market's liquidity, but it's also why the order book can flicker and why a retail market order can get a worse fill than expected. You're not competing with it — just trading alongside it.
See also: Market maker · Liquidity · PFOF
How much the stock has actually moved over a past window — realized, backward-looking volatility (typically a standard deviation of past returns). Traders compare it to implied volatility: when IV sits well above HV, options are pricing in more movement than the stock has been delivering, which can favor sellers.
See also: Implied volatility
The buyer of an option — the one who pays the premium and holds the right (not the obligation) to exercise. A holder's max loss is the premium paid; the upside is leveraged. The opposite side of the writer.
Keyboard shortcuts mapped to trade actions — buy, sell, cancel, set a stop — so you act in a keystroke instead of hunting for a button. Essential for scalping, where seconds matter.
See also: Scalping · Execution · Trading desk
A multi-line Japanese indicator that maps trend, momentum, and support/resistance at once. Its shaded “cloud” acts as a dynamic support/resistance zone — price above the cloud is bullish, below it bearish. Information-dense, and divisive among traders.
See also: Moving average · Trend · Support
The market's forecast of how much the stock will move, backed out of current option prices — forward-looking, not historical. High IV means pricey options (a big move is expected); low IV means cheap ones. IV usually spikes into events like earnings and collapses right after (IV crush). It's the single biggest lever on an option's extrinsic value.
See also: Historical volatility · Vega · IV crush · Extrinsic value
An option that already carries intrinsic value. A call is ITM when the stock is above the strike; a put is ITM when the stock is below the strike — either way, exercising now would pay off. ITM options cost more but move more closely with the stock.
See also: Moneyness · Intrinsic value · Strike price
A financial statement showing a company's revenue, costs, and profit (or loss) over a period — the "did they make money?" report. Also called the profit & loss (P&L) statement. It flows from revenue at the top down to net income at the bottom, which feeds directly into EPS.
See also: Balance sheet · Cash flow statement · Revenue · EPS
Calculations plotted on a chart to help read momentum, trend, or volume — moving averages, VWAP, RSI, MACD, and the like. They describe what price has done; they don't predict what it will do, and stacking too many just buries the signal in noise.
See also: Moving average · RSI · MACD · VWAP
Within a single trading day. An intraday move, chart, or position lives between the open and the close rather than spanning days. Day traders work almost entirely on intraday timeframes — 1- and 5-minute charts.
See also: Day trading · Overnight · Premarket
The part of an option's premium that's real right now — how far in-the-money it is. A $185 call with the stock at $190 has $5 of intrinsic value; an out-of-the-money option has zero. Intrinsic value plus extrinsic value equals the total premium.
See also: Extrinsic value · Moneyness · Premium
The same shape as a shooting star — small body, long upper wick — but appearing after a decline instead of at a top. There it's a potential bullish reversal: buyers tried to push up and, even if they faded, the attempt signals a shift. Shape plus location, again: same candle, opposite meaning from a shooting star.
See also: Hammer · Shooting star · Hanging man
Buying and holding for the long haul — months, years, often decades — on the belief that a company or fund will be worth more over time. Investors weigh fundamentals, earnings growth, and compounding far more than intraday charts, and they ride out drops that would shake a trader out, sometimes adding on weakness. It's the slowest, most forgiving end of the spectrum: time in the market does much of the work, and a single bad day rarely matters.
See also: Position trading · Swing trading · Fundamental analysis
Initial Public Offering — a company's first sale of shares to the public, listing it on an exchange. SpaceX's June 2026 Nasdaq debut (ticker SPCX) was the largest IPO in history, raising about $75 billion at a $1.77 trillion valuation and topping $2 trillion in market cap on its first day.
See also: Secondary offering · Dilution · S-1 · Underlying
The sharp drop in implied volatility right after a scheduled catalyst — usually earnings — passes. Options get pumped with IV and premium beforehand; once the uncertainty resolves, IV collapses and that extrinsic value evaporates, often handing option buyers a loss even when the stock moved their way. The classic trap for beginners buying options into earnings.
See also: Implied volatility · Vega · Extrinsic value · Earnings
A running record of your trades — entries, exits, size, the setup, and ideally why you took it and how you felt. The journal is where an edge actually gets found: reviewing it turns scattered trades into patterns, and most of the metrics in this category come straight out of it.
See also: Backtest · Green day · Expectancy
The Kelly criterion — a formula for the position size that maximizes long-run growth given your win rate and payoff. It often spits out an aggressively large number, so most traders use a fraction (“half-Kelly”) to tame the volatility. Treat it as a sizing sanity-check, not a literal rule for fast trades.
See also: Position size · Risk-reward ratio · Expectancy
A momentum oscillator that blends rate-of-change readings from several timeframes into one smoothed line, plus a signal line. Built to cut noise; a cross of the two lines is the usual signal.
See also: Rate of Change · Momentum indicator · MACD
The price of the most recent completed trade — what the stock last changed hands at. Many broker order tickets pre-fill a limit order with the last price as a starting point.
Long-dated options — Long-term Equity AnticiPation Securities — with expirations a year or more out. The extra time means slower theta decay and a higher premium; traders use them as a lower-cost, leveraged stand-in for owning shares over the long haul (a 'stock replacement').
See also: Theta · Expiration date · Rho
The most basic real-time quote: the current best bid, the current best ask, and the last traded price, along with the size sitting at the inside. It tells you where a stock can be bought and sold right now, but nothing about the orders stacked behind those prices. Level 1 is enough for many traders; if you want to see the depth behind the quote — who's lined up at each price level — that's Level 2.
A live view of the order book showing the bids and asks stacked at multiple price levels, with the size at each — the market's depth, beyond just the best bid and ask.
See also: Level 1 · Order book · NBBO · Time & Sales
Using borrowed money (margin) to control a larger position than your cash alone allows. It magnifies gains — and losses — in equal measure.
See also: Margin account · Buying power · Over-leveraged · Leveraged ETF
An ETF that uses derivatives and debt to multiply an index's daily move — a 2x or 3x fund aims to return double or triple what its index does that day (for example SOXL on semiconductors or TQQQ on the Nasdaq-100). The catch is the word daily: because the leverage resets every session, choppy or sideways markets grind these down over time — volatility decay, where the index can end flat while the leveraged fund bleeds lower. Powerful intraday tools, genuinely dangerous as a buy-and-hold.
See also: ETF · Leverage · Volatility
An order to buy or sell only at a specified price or better. It controls your price but may not fill.
See also: Market order · Limit price · Stop order · Fill
The exact price you set on a limit order — the worst price you'll accept (a maximum when buying, a minimum when selling). It fills at your limit or better, or not at all.
See also: Limit order · Bid · Ask · Slippage
How easily you can get in or out without moving the price much. Thinly traded, low-liquidity names have wider spreads and more slippage.
Judged per contract, not just per stock: a liquid option has tight bid-ask spreads plus healthy volume and open interest on that strike and expiration. Even a liquid stock can have illiquid far-dated or far-out-of-the-money options, where wide spreads quietly eat your edge.
See also: Spread · Open interest · Volume
To short a stock, your broker must first find shares for you to borrow — that's a locate. Easy-to-borrow names have plenty available and cost little; hard-to-borrow (HTB) names are scarce and charge a fee, sometimes a steep one. On low-float small-caps, no locate means no short — a real limit on the trade, not a technicality.
See also: Short selling · Short interest · Short sale restriction
A position that profits when the price goes up. “Going long” means buying expecting a rise. The opposite of short.
A doji with long wicks on both sides — price swung hard in both directions but closed near where it opened. It's violent indecision, common on halts and resumptions of low-float small-caps. Big range, no resolution: the market is deciding, and so should you.
See also: Doji · Spinning top · Dragonfly doji
A stock with relatively few shares available to trade — often under 10–20 million. Because supply is thin, even modest buying can move the price fast and far, which is what makes low-float names both the biggest momentum movers and the most dangerous. The heart of small-cap momentum trading.
See also: Float · Small-cap · Float rotation · Short squeeze
An account that lets you borrow from your broker to trade, using your holdings as collateral. It unlocks extra buying power but adds interest and the risk of a margin call. The old PDT rule applied only to margin accounts.
See also: Cash account · Leverage · Buying power · Margin call
A demand from your broker to add cash or close positions when losses push your account below the equity it requires to keep your borrowed (margin) positions open. Ignore it and the broker can liquidate your positions for you, at whatever price the market offers. It is the sharp end of trading on margin: the leverage that boosted your buying power also forces the exit when a trade moves against you. Under the 2026 real-time margin framework, that maintenance check runs continuously through the day.
See also: Margin account · Buying power · Leverage · Over-leveraged
A company's total value: share price × shares outstanding. The rough tiers: mega-cap over $200B, large $10–200B, mid $2–10B, small $300M–$2B, micro $50–300M, and nano under $50M. Momentum traders live in the small, micro, and nano range, where a catalyst can move price fast.
See also: Shares outstanding · Small-cap · Float · P/E ratio
The regular U.S. trading session: 9:30 AM–4:00 PM ET, Monday–Friday (excluding market holidays). Volume and liquidity are highest here. Outside it, trading splits into premarket, after-hours, and the overnight session.
See also: Premarket · After-hours · Overnight
A firm that continuously quotes both a bid and an ask in a stock, standing ready to buy from sellers and sell to buyers so trades can happen smoothly. They earn the spread between the two and supply much of the liquidity you tap when you hit the bid or lift the offer. On a Level 2 window, the stacked orders you see are largely market makers and other participants posting size at each price.
An order to buy or sell immediately at the best available price. It fills fast, but you don't control the exact price.
See also: Limit order · Fill · Slippage · Spread
The overall mood of traders toward a stock or the market as a whole — bullish (expecting up), bearish (expecting down), or somewhere in between. Sentiment isn't a single number; it's read from price action, volume, how news is received, and gauges like the VIX or put/call ratios. It matters because crowds move markets: when sentiment turns euphoric, risk is often highest, and when it's washed out and fearful, the selling may be close to exhausted.
See also: Put/Call ratio · VIX · Bias
What a holding is worth right now at the current price — shares held × the latest price. It moves tick by tick with the market, unlike your cost basis, which is fixed at what you paid.
See also: Cost basis · P&L · Market cap
A candle with a full body and little to no wick on either end — price opened at one extreme and closed at the other with no hesitation. A green marubozu on a breakout is pure conviction buying; a red one is heavy selling. The "no doubt" candle.
See also: Candlestick · Wick · Green and red
The deepest peak-to-trough drop your account has ever taken — the worst stretch you've actually lived through. It's a gut-check on risk: if your max drawdown is bigger than your stomach, your size is too big.
See also: Drawdown · Recovery · Risk management
A stock that rips on social-media hype and crowd attention rather than fundamentals. The archetype is the January 2021 GameStop (GME) saga: traders on Reddit's r/wallstreetbets piled into a heavily shorted, left-for-dead retailer, igniting a short squeeze that ran the stock from a few dollars to the hundreds in weeks, handed some hedge funds enormous losses, and pushed brokers to restrict buying. AMC ran in sympathy the same week. Meme-stock moves are violent in both directions and can detach completely from the business, so they cut fast either way.
See also: Short squeeze · Pump and dump · Chat pump
The tendency of a stock already moving fast on heavy volume to keep going in that direction, at least for a while. Momentum traders aim to ride the push and step off before it fades.
See also: Relative volume · Catalyst · Runner · Trend-following
A bare-bones indicator plotting the difference between today's price and the price a set number of periods ago. Positive and rising means upward momentum is building; negative means it's fading. (Different from the broader Momentum category, and from STT's MOMO score.)
See also: Rate of Change · MACD · Divergence
A quick read on how strong a move is — usually a small numeric scale — built from confluence across several signals at once: expanding relative volume, price on the right side of VWAP, and moving averages, RSI, and MACD aligned in the same direction. Platforms and community indicators score it differently, so treat the number as a confluence check, not a buy signal.
See also: Catalyst · Relative volume · Float rotation
A momentum indicator, scaled 0–100, that folds volume into the calculation — think of it as a volume-weighted RSI. Readings above 80 suggest overbought, below 20 oversold. Because it accounts for volume, some traders find it more useful than RSI on stocks where volume tells the real story.
See also: RSI · OBV · Overbought
Where an option's strike sits relative to the current stock price — the umbrella term for in-the-money (ITM), at-the-money (ATM), and out-of-the-money (OTM). Moneyness drives how much of the premium is intrinsic vs. extrinsic, and how closely the option tracks the stock.
See also: In-the-money · At-the-money · Out-of-the-money · Intrinsic value
Three-candle reversal patterns. A morning star (bearish candle, small indecision candle, strong bullish candle) marks a possible bottom; an evening star is the mirror, marking a possible top. Reliable enough on a 5-minute chart, but slow to complete — by the time all three print on a 1-minute runner, the move may be over.
See also: Reversal · Doji · Engulfing candle
A line tracking a stock's average price over a recent window, smoothing the noise so the underlying trend stands out. The two kinds differ in how they weight the data: a Simple Moving Average (SMA) treats every period equally, while an Exponential Moving Average (EMA) weights recent prices more heavily and turns faster. Traders plot several at once — common lengths are 9, 20, 50, and 200 — and read their slope and stacking order as trend signals. See SMA and EMA for the specifics.
See also: Simple moving average · Exponential moving average · VWAP · Trend
A trend-and-momentum indicator built from two moving averages: the MACD line (12 EMA minus 26 EMA) and a signal line (a 9 EMA of the MACD line). Traders watch the two lines cross and the histogram (the gap between them) flip — a popular read on momentum shifting.
See also: Moving average · Divergence · RSI · Momentum indicator
Confluence built from several reference points landing at the same price — a prior high, a moving average, a round number and a support level all within a few cents of each other. That cluster is a “confluence zone,” and it matters more than any single line because the market is watching it for several reasons at once.
See also: Confluence · Top-down analysis · Support/resistance flip
Selling an option without the position to back it — a naked call with no shares to deliver, or a naked put with no cash set aside. You keep the premium, but the risk is open-ended (a naked call's loss is theoretically unlimited). It's the highest options approval level for good reason.
See also: Writer · Covered call · Options approval levels
A major U.S. electronic exchange, home to many technology and smaller growth companies. It runs the same 9:30 AM–4:00 PM ET core session as the NYSE — SpaceX (SPCX) listed here in 2026.
See also: NYSE · Exchange · Stock index
National Best Bid and Offer — the highest bid and lowest ask available across all exchanges at a given moment. It's the official 'quote' your order is measured against.
See also: Level 1 · Bid · Ask · Market maker
The New York Stock Exchange — the largest U.S. stock exchange, home to many established, larger companies. Regular trading runs 9:30 AM–4:00 PM ET, the same core hours as Nasdaq.
See also: NASDAQ · Exchange · Stock market
A running tally that adds the day's volume when price closes up and subtracts it when price closes down. The idea is that volume leads price — a rising OBV while price is flat is read as quiet accumulation.
See also: Volume · Money Flow Index · Divergence
In options trading, the total number of contracts still open at a given strike and expiration — positions opened but not yet closed or exercised. Where volume counts the contracts traded today, open interest is the running tally of live positions. Rising volume with rising open interest means new money is committing; heavy volume with flat open interest is often just day-traders round-tripping the same contracts. High open interest also flags a liquid, tighter-spread contract.
See also: Volume · Options chain · Unusual options activity
A trade off the high or low of the opening range — the price band set in the first few minutes (often 1, 5, or 15) of the session. A push above the range high is the long version; a break below the low is the short. A clean, rules-based way to trade the morning expansion.
Contracts giving the right — but not the obligation — to buy (a call) or sell (a put) a stock at a set price by a set date. One standard contract controls 100 shares, so a $2.00 premium costs $200 to buy. A separate, leverage-heavy instrument with its own vocabulary (premium, strike, the Greeks, implied volatility); most beginners start with shares first.
See also: Call · Put · Options chain · Premium · Underlying
The tiers brokers use to gate which options you can trade, based on experience and account type. Roughly: Level 1 = covered calls and cash-secured puts; Level 2 = buying calls and puts; Level 3 = spreads; Level 4 = naked/uncovered selling. Higher levels unlock more strategies and more risk, and require approval.
See also: Covered call · Naked · Spread
The full table of every option on a stock — all strikes and expirations, each with its bid, ask, volume, open interest, implied volatility, and Greeks. Calls usually sit on one side, puts on the other, strikes running down the middle. Reading the chain is where options trading actually happens.
See also: Open interest · Implied volatility · Delta · Strike price
Your instruction to the market to buy or sell — a market order (fill now at the best price) or a limit order (fill only at your price or better), among other types.
See also: Order status · Time in force · Market order · Limit order
The live list of all resting buy and sell orders at each price level. Level 2 is how you view it; it shows where supply and demand are stacked.
The path your order takes to get filled — which exchange, market maker, or wholesaler it's sent to. Routing decides how fast and how well you get filled. Brokers that sell order flow route for their own economics; direct-access brokers let you choose the venue yourself, which is why routing shows up as a column in my broker comparisons.
See also: PFOF · Direct Market Access · Execution · Broker
Where your order stands: Working (live, waiting to fill), Filled (executed completely), Partial (only some shares filled so far), or Canceled (pulled before filling).
An option with no intrinsic value yet. A call is OTM when the stock is below the strike; a put is OTM when the stock is above the strike. OTM options are cheap (all extrinsic value) and the lottery-ticket favorite — they need the stock to move to pay off, and most expire worthless.
See also: Moneyness · Extrinsic value · Strike price
Holding a position too large for your account — often using borrowed buying power (margin) — so a normal move against you does outsized damage. Being over-leveraged turns ordinary volatility into account-threatening swings.
See also: Leverage · Margin call · Risk management · Daily max loss
Two sides of one idea: a stock that has run up so far, so fast it may be due to pull back (overbought), or fallen so hard it may be due to bounce (oversold). Momentum oscillators like RSI put numbers on it — readings above 70 are commonly called overbought, below 30 oversold. The catch: in a strong trend a stock can stay "overbought" for a long time and keep climbing, so treat these as context clues, not automatic buy or sell signals.
See also: RSI · Stochastic Oscillator · Money Flow Index
The newer overnight session bridging after-hours and premarket — roughly 8:00 PM–4:00 AM ET (Sunday–Thursday nights) on supported brokers and venues, pushing toward near-24/5 trading. Liquidity is thin and only limit orders are accepted, so treat overnight prices with extra caution.
See also: After-hours · Premarket · Market hours
Taking too many trades — or trading too large — relative to your plan or your actual edge, usually driven by boredom, FOMO, or trying to win back a loss. More activity is not more profit; it mostly multiplies commissions, mistakes, and emotional fatigue. A losing session often traces straight back to it.
See also: Revenge trading · Daily max loss · Focus window · Trading plan
Profit and loss — what you've made or lost on a trade, a day, or the account. Often split into realized P&L (closed trades) and unrealized P&L (open positions marked at the current price). Your daily P&L against your daily max loss is the number that ends sessions.
See also: Profit · Cost basis · Market value
Price-to-earnings ratio — a stock's share price divided by its earnings per share (EPS). It is a quick read on how expensive a stock is relative to the profit it generates: a P/E of 20 means you are paying $20 for every $1 of annual earnings. High P/Es imply the market expects fast growth; low ones can signal a bargain or a struggling business. A valuation staple in fundamental analysis, and less central to momentum trading, where price action leads.
See also: EPS · Earnings · Market cap
Practicing with fake money in a simulator — also called simulated trading — so you can test a strategy and learn the platform without risking real cash. Great for building reps before going live.
See also: Simulated trading · Backtest · Journal
A move so steep the chart curves nearly vertical. Exciting on the way up, but parabolic moves tend to reverse just as fast.
See also: Momentum · Runner · Volatility
A trend-following indicator that plots dots above or below price to signal direction: dots below price suggest an uptrend, dots above suggest a downtrend, and a flip is a possible reversal (SAR = "stop and reverse"). Useful for trailing a stop in a trending move — but it whipsaws badly in choppy, sideways action. (Not the same as a parabolic price move.)
See also: Trend · Trailing stop · ADX
The money a broker earns by routing your orders to a wholesale trading firm instead of straight to an exchange — the firm pays for the right to fill your trade. It's how many "commission-free" brokers actually make money. The trade-off is execution quality: your fill may be slightly worse than a broker that routes for best price. (See how each broker routes in my broker comparisons.)
See also: Order routing · Commission · Market maker · Direct Market Access
The Pattern Day Trader rule. For over two decades it required a U.S. margin account to hold at least $25,000 to make four or more day trades in five business days — fall short and you were locked out of active day trading. FINRA's $25,000 Pattern Day Trader minimum was eliminated as of June 4, 2026, replaced by a real-time intraday margin framework — your broker's cutover date may vary. Kept here because older guides and videos still reference it.
See also: Margin account · Day trading · FINRA · Cash account
Loosely, a low-priced stock (often under $5, sometimes under $1). Cheap share prices plus low floats are where small-cap momentum lives.
See also: Small-cap · Low-float · Blue-chip stock · Pump and dump
Two-candle partial reversals — the weaker cousins of engulfing. A piercing line (green candle closing back above the midpoint of a prior red) hints at a bottom; dark cloud cover (red closing below the midpoint of a prior green) hints at a top. Less decisive than a full engulfing, so treat them as softer signals.
See also: Engulfing candle · Reversal · Morning star
Calculated support and resistance levels based on the prior period's high, low, and close. A central pivot plus levels above (R1, R2) and below (S1, S2) give traders pre-marked areas where price may react. Popular because they're objective and the same levels are visible to everyone — which can make them partly self-fulfilling.
See also: Support · Resistance · Support/resistance flip
The full collection of positions and cash you hold. Day traders often run a lean portfolio — sometimes flat (all cash) overnight — while investors build a broader, longer-held mix.
Your current holding in a stock. A long position profits if it rises, a short position if it falls, and you're 'flat' when you hold none.
See also: Position size · Long · Short · Close
How many shares — and how much money — you put into a trade. Sizing is set by your risk, not by how much you like the stock. It's the core input the calculator solves for.
See also: Account size · Risk-reward ratio · Kelly % · Stop loss
A longer-horizon style that holds for weeks to months, riding a larger trend or a fundamental story rather than short-term price action. Position traders check charts far less often, size for bigger swings, and sit through the day-to-day noise that would stop out a swing trader. It sits between swing trading and true long-term investing — more active than buy-and-hold, far more patient than day trading.
See also: Swing trading · Investing · Trend-following
An official company announcement — earnings, FDA news, a contract, an offering — pushed out over the newswires. PRs are the catalysts behind many fast small-cap moves: a headline can spike a stock in seconds, and "sell the news" reversals are common once the move is priced in.
Trading before the regular open — commonly 4:00 AM–9:30 AM ET. Where overnight gappers and the day's first scans take shape; lighter volume means moves can be exaggerated.
See also: After-hours · Market hours · Gapper
The price of an option — what the buyer pays and the seller collects, quoted per share but sold in 100-share contracts (a $2.00 premium = $200). It splits into intrinsic value (how far in-the-money it is) plus extrinsic value (time and volatility). The premium is the most an option buyer can lose, and the most a seller can make.
See also: Intrinsic value · Extrinsic value · Moneyness
What one share currently costs to buy or sell — the number on the chart or order ticket. It sits within the bid-ask range and updates with every trade.
See also: Last price · Bid · Ask · Spread
How price actually moves on the chart — the run of highs, lows, and candles — read on its own, without leaning on indicators. 'Clean price action' (steady, readable moves rather than choppy chaos) is one of the A+ checklist boxes.
See also: Candlestick · Support · Resistance · Trend
The money made on a position or over a period — realized once you close the trade, unrealized while it's still open. In a journal you track net profit (after commissions and fees), not just the gross price move.
See also: P&L · Take profit · Profit factor
A one-number read on whether your system makes money: gross profit divided by gross loss. Above 1.0 means winners outweigh losers; many traders look for 1.5–2.0+ as a durable edge. It says nothing about how you got there, so read it next to win rate and expectancy.
See also: Win rate · Expectancy · Equity curve
Short for proprietary trading firm — a company that funds traders with its own capital in exchange for a share of the profits, usually after you pass a paid evaluation. You trade the firm's capital on a platform it designates (often a third party like NinjaTrader or Tradovate), not your own brokerage account. It lets a trader reach far more buying power while risking less of their own money. Most retail prop firms focus on futures or forex rather than stocks.
See also: Buying power · Leverage · Risk management
A temporary dip against the prevailing trend — an uptrending stock pausing and retracing some of its gain before (often) continuing higher. Momentum traders look to enter on a controlled pullback to support or a moving average rather than chasing the spike.
See also: Breakout · Support · Trend · Consolidation
A manipulation scheme where promoters quietly accumulate a cheap, thinly traded stock, hype it hard — paid newsletters, social media, spam blasts — to lure buyers and inflate the price, then dump their shares into that demand, leaving latecomers holding the collapse. Low-float micro-caps and some crypto tokens are common vehicles. The tells: a no-name ticker suddenly "everywhere," manufactured urgency, and promises of guaranteed gains. Recognizing the pattern is how you avoid becoming the exit liquidity.
See also: Chat pump · Meme stock · Market sentiment
An option that gives the buyer the right — not the obligation — to sell 100 shares at a set strike price before expiration. You buy puts to profit from a falling stock or to hedge a long position — the bearish mirror of a call. The seller (writer) collects the premium and must buy the shares if assigned.
See also: Call · Strike price · Premium
The volume of puts traded divided by the volume of calls, used as a sentiment gauge. A high ratio (more puts) signals fear or hedging and is often read as contrarian-bullish at extremes; a low ratio (more calls) signals greed. Tracked on a single stock or market-wide.
See also: Put · Call · Market sentiment
Entering with a quarter (1/4) of your normal position size — a way to take a lower-conviction setup, test a pattern, or scale in gradually while keeping risk small. Trading smaller when conviction or conditions are weaker is core risk management.
See also: Half size · Position size · Scaling in
A snapshot of where a stock is trading right now — its current bid, ask, and last price. The NBBO is the official best quote across all exchanges.
See also: Level 1 · Bid · Ask · Last price
Your risk on a trade expressed as “1R” — the distance from your entry to your stop. Gains and losses get measured in R (a +3R trade made three times what you risked), which is how an equity curve like the one on this site is plotted.
See also: Risk-reward ratio · Expectancy · Position size
A sustained move higher — in a single stock, a sector, or the whole market — over minutes, days, or months. A rally inside a downtrend that fizzles is a relief rally (or bear-market rally); one that follows through becomes a new uptrend. Traders care less about the label than whether rising volume and higher highs confirm the move has legs.
See also: Bull market · Momentum · Runner
Room to run — the open space between the current price and the next overhead resistance on a higher timeframe. A setup can be perfect on the 1-minute chart and still be a bad trade if the daily shows a wall of prior selling 20 cents above your entry. That's why 'range on the daily chart' is an A+ checklist box: it's the one criterion an intraday chart can't tell you. Not to be confused with an opening range, which is a specific time window rather than available upside.
See also: Resistance · Breakout · Consolidation
A momentum indicator showing the percentage change in price over a set number of periods. Above zero means price is higher than it was N bars ago; the steeper the line, the faster the move.
See also: Momentum indicator · MACD · KST
Climbing back to a prior equity high after a drawdown. The math is unforgiving — a 50% drawdown needs a 100% gain just to get back to even — which is the whole case for keeping drawdowns small. A recovery factor (net profit ÷ max drawdown) measures how efficiently you dig out.
See also: Drawdown · Max drawdown · Equity curve
A momentum oscillator scaled 0–100 that gauges how fast and far price has moved recently. Above 70 is often called overbought and below 30 oversold — though in a strong trend a stock can stay “overbought” far longer than beginners expect.
See also: Overbought · Stochastic Oscillator · Divergence · MACD
Today's volume compared with what's normal for that stock. RVOL over 2 means it's trading at more than twice its usual pace — a sign something's happening.
See also: Volume · Float rotation · Momentum
A key price level where selling has repeatedly capped a stock's rise. Pushing above it is a breakout.
See also: Support · Breakout · Support/resistance flip · 52-week high
Jumping straight back in to win back money you just lost — usually bigger, faster, and without a real setup. It's an emotional reaction, not a strategy, and one of the quickest ways to turn a small red day into a blown-up account. The fix is a daily max loss and a hard stop for the day.
See also: Overtrading · Daily max loss · FOMO · Trading psychology
The total money a company brings in from sales before any costs are subtracted — the "top line." Revenue growth is a core signal of a healthy, expanding business. It's not profit, though: a company can grow revenue fast and still lose money, which is common with early-stage small-caps.
See also: Income statement · EPS · Earnings
A trade betting a prevailing move is about to turn — a downtrend rolling up (bullish reversal) or an uptrend rolling over (bearish reversal). Higher-risk than trading with the trend, since you're calling the turn, so traders wait for confirmation like a reclaim, a double bottom, or a clear change in character.
See also: Dead cat bounce · Double bottom · Double top · Capitulation
The Greek that measures how much an option's price moves for a 1% change in interest rates. It's the least-watched Greek for short-term trading — rate moves are slow and small next to price, time, and volatility — but it matters more for long-dated options like LEAPS.
See also: LEAPS
Deciding before you enter how much you're willing to lose, then sizing the trade so that loss stays small and survivable. It's what keeps one bad trade from undoing many good ones.
See also: Daily max loss · Position size · Risk-reward ratio · Stop loss
A position you've made impossible to lose on — by booking enough profit and/or lifting your stop to your entry so the worst case left is a breakeven. A common way to manage a winner: take partials, move the stop to break-even, and let the rest ride with zero downside. (Different from the "risk-free rate" on Treasuries — here it just means the trade can't hurt you anymore.)
See also: Sharpe ratio · Risk management
The size of your potential gain compared with your potential loss on a trade — for example, risking 1 to make 3 (1:3).
See also: R · Risk management · Position size · Take profit
A stock making a big percentage move is a runner. A former runner is one that's run hard before, so traders watch it for a repeat.
The small piece of a position you leave on after scaling out of most of it — letting a partial "run" for extra upside while the rest is already booked. (Not to be confused with a "runner" meaning a stock making a big sustained move — same word, different sense.)
See also: Scaling in · Trim · Take profit · Runner
Filings a company submits to register new shares for sale. An S-1 is the initial registration (IPOs or first-time raises); an S-3 is a streamlined version for companies that already report regularly. Both signal potential dilution — new shares hitting the market. (See Dilution / Offering.)
See also: IPO · Secondary offering · Dilution
Entering or exiting a position in pieces instead of all at once. Scaling in means building your full size across several buys — a starter, then adds as the trade proves itself — so a single bad entry price hurts less. Scaling out means selling in portions as price runs, locking in profit on the way up while leaving some on to keep working. Both trade a bit of perfect-timing upside for smoother execution and tighter control of risk.
See also: Half size · Trim · Runners · Position size
A fast style that takes small gains from short-term moves, often holding for seconds to minutes rather than hours. It leans on high trade frequency, tight spreads, and fast execution with hotkeys — many small wins that add up — so liquidity and low costs matter more than for any other style.
See also: Day trading · Momentum · Hotkeys
A real-time tool that continuously watches the market and alerts you the moment a stock triggers your criteria intraday — a new high, a volume spike, a halt. A screener filters a snapshot; a scanner runs live.
See also: Screener · Watchlist · Relative volume · Alert
A tool that filters the entire market down to the stocks meeting your criteria — price, float, relative volume, a catalyst — so you watch a handful instead of thousands. A screener works off a snapshot; a scanner (its live cousin) alerts in real time.
See also: Scanner · Watchlist · Relative volume
The Securities and Exchange Commission — the U.S. government agency that regulates securities markets, enforces the rules, and reviews company filings (like the S-1 a company files to go public).
A sale of additional shares after a company is already public. A dilutive secondary issues brand-new shares — raising cash for the company but increasing the share count, which thins each existing shareholder's slice and usually pressures the price; a non-dilutive secondary is just existing holders selling, with no new shares created. For small-caps, a surprise dilutive offering (often priced below market, sometimes dropped overnight or "at-the-market") is a classic catalyst that tanks a runner — which is why traders watch filings closely.
See also: Dilution · IPO · S-1 · ATM Offering
A broad slice of the economy that groups companies doing similar things. The standard framework (GICS) splits the market into 11: Technology, Health Care, Financials, Consumer Discretionary, Consumer Staples, Energy, Industrials, Materials, Utilities, Real Estate, and Communication Services. Stocks in the same sector tend to move together, so a catalyst in one name often drags its peers — the "sympathy" move momentum traders watch for. Sector strength also shows where money is rotating.
See also: Market sentiment · Sympathy play · Top-down analysis
When you sell, the cash is not truly yours to reuse until the trade settles — one business day after the trade (T+1) for U.S. stocks. Settled cash has completed that cycle; unsettled funds are sale proceeds still clearing. It mainly bites in a cash account: spend unsettled proceeds and buy again too soon and you can trip a good-faith violation (or "free-riding"), which gets your account restricted. Margin accounts mostly sidestep this. Worth understanding now that more beginners are day trading in cash accounts since the $25K PDT floor was removed.
See also: Cash account · Margin account
A single unit of a stock — one share is one piece of ownership in the company. 'Shares' and 'stock' are used loosely, but a share is the countable unit you actually buy and sell.
See also: Stock · Shares outstanding · Float
The total number of a company's shares in existence, including insider and restricted shares. The float is the freely tradable subset of these.
See also: Float · Market cap · Dilution
A measure of return relative to the risk taken to earn it — return above a risk-free baseline divided by volatility. Higher is better: it rewards steady gains and penalizes a wild ride to the same place. More common in portfolio land than day trading, but a useful lens on whether your returns are smooth or just lucky.
See also: Risk-free · Volatility · Drawdown
A small body with a long upper wick, appearing at the top of a run — the single most important candle for a momentum trader. It means buyers pushed price higher, then sellers took it all back before the close: the push failed. On a runner, a shooting star (also called a topping tail) is an exit signal, not an entry.
See also: Inverted hammer · Gravestone doji · Hanging man
A position that profits when the price falls, by selling borrowed shares and buying them back lower. It carries open-ended risk if the stock rises instead. The opposite of long.
See also: Long · Short selling · Bearish · Cover
The total number of shares currently sold short in a stock — a read on how heavily traders are betting against it. Two derived figures drive squeeze potential: short float, the short interest as a percentage of the tradable float (a high reading, say 20% or more, means a crowded short), and days to cover, the short interest divided by average daily volume (how many days of normal trading it would take every short to buy back). The more crowded and harder-to-exit the short side, the more fuel for a short squeeze if price turns up.
See also: Short squeeze · Short selling · Short sale restriction
A rule that kicks in when a stock falls 10% or more from the prior day's close: for the rest of that day and all of the next, you can only short it on an uptick — at a price higher than the last trade, never by hitting the bid on the way down. The SEC put it in place so shorts can't pile on and drive a falling stock straight into the ground. For small-cap day traders it matters constantly, since these names hit the trigger all the time; once SSR is on, shorting gets slower and harder to fill.
See also: Short selling · Short interest · Halt
Betting that a stock will fall. You borrow shares from your broker, sell them now at the market price, then aim to buy them back later at a lower price — "covering" — return the borrowed shares, and keep the difference. The steps: (1) borrow shares, (2) sell at the current price, (3) buy them back lower (you hope), (4) return them and pocket the difference. The catch is that the risk is inverted: a stock can only fall to zero (your gain is capped) but can rise without limit (your loss is not), margin is required, and a short squeeze can force a rapid, painful buy-back that drives the price even higher. Used for hedging, speculation, or betting against an overvalued stock.
See also: Short · Cover · Locate · Short interest
When a rising price forces short sellers to buy back to cap their losses, and that buying drives the price even higher — a feedback loop.
See also: Short interest · Gamma squeeze · Float · Meme stock
The profit on something you held for one year or less — which is essentially every day trade and most swing trades. In the U.S., short-term gains are taxed as ordinary income, typically a higher rate than the long-term rate that kicks in after a year. The practical takeaway for an active trader: a real chunk of your green days belongs to the IRS, so set money aside and keep good records. (This is general information, not tax advice — talk to a tax professional about your situation.)
See also: Wash sale · Cost basis · P&L
A condition that flags a potential trade — a moving-average cross, a scan hit, an indicator trigger. A signal points your attention at something; it is not an instruction to buy. Treat it as one input into a decision, never the decision itself.
See also: Alert · Indicators · Scanner
A moving average that weights every period in its window equally — many platforms just label it MA. Because it reacts slowly, it works best as a trend filter rather than a fast signal. The 200-day (SMA-200 / MA-200) is the classic long-term line: many traders read price above it as a longer-term uptrend and below it as a downtrend. When you want something that turns faster, reach for the EMA.
See also: Moving average · Exponential moving average · Trend
Another name for paper trading — placing trades with fake money in a simulator to practice without financial risk.
See also: Paper trading · Backtest · Journal
The gap between the price you expected and the price you actually filled at. In fast or thin markets a market order can fill well past your intended level — slippage quietly eats your edge, which is why traders lean on limit orders for illiquid or fast-moving names.
See also: Fill · Spread · Market order · Liquidity
A company with a relatively small market cap (broadly ~$300M–$2B; “micro” and “nano” caps are smaller still). Their size lets them move fast on modest volume.
See also: Penny stock · Low-float · Blue-chip stock · Market cap
A small body with wicks on both sides — indecision, but less extreme than a doji. Neither buyers nor sellers won the candle. One spinning top means little; a cluster of them signals chop, and chop is where momentum accounts bleed out. Often a sign to step aside, not press.
See also: Doji · Long-legged doji · Harami
The gap between the bid and the ask. A tight spread means good liquidity; a wide spread costs you more to get in and out.
Each contract has its own bid-ask spread, often much wider than the stock's because option volume is thinner. Heads-up on the word itself: "spread" also names a multi-leg strategy — buying one option and selling another (a vertical, credit, or debit spread) — a separate meaning covered under options strategies.
A momentum oscillator (0–100) comparing the latest close to the recent high-low range, on the theory that closes near the top of the range signal strength. Plotted as %K and %D lines; crosses in the overbought or oversold zones are the usual signals.
See also: Fast Stochastic Oscillator · Williams %R · Overbought
A share of ownership in a company. Buying a stock makes you a part-owner, and its price reflects what the market will pay for that slice right now.
A basket of stocks bundled into a single number that tracks a slice of the market — the S&P 500 (500 large U.S. companies), the Nasdaq Composite (Nasdaq-listed names, tech-heavy), and the Dow (30 blue chips) are the headline U.S. indices. When someone says "the market was up today," they usually mean an index. Day traders watch them for overall risk-on / risk-off tone, since a strong tape lifts more setups; index ETFs like SPY and QQQ let you trade them directly.
See also: ETF · Stock market · Sector
The whole network of exchanges and venues where stocks are bought and sold — the NYSE, Nasdaq, and the systems that connect buyers and sellers.
See also: Exchange · Stock index · Bull market
A change to a company's share count that adjusts the price proportionally without changing the total value you hold. A forward split (say 4-for-1) multiplies your shares and divides the price — 100 shares at $200 becomes 400 at $50. A reverse split does the opposite (1-for-10): 1,000 shares at $0.50 becomes 100 at $5.00. Forward splits often follow strength; reverse splits are common in beaten-down small-caps trying to stay above an exchange's minimum listing price, and they can come right before more share dilution.
See also: Shares outstanding · Market cap · Float
A predefined exit that caps your loss if a trade goes against you. A hard stop is an actual resting order; a mental stop is one you promise to honor — and honoring it is the discipline that protects the account.
See also: Stop order · Trailing stop · Daily max loss · Risk management
An order that sits dormant until price hits your trigger ("stop") level, then springs into action — the usual way a stop loss is actually placed. Two flavors with a key difference: a stop-market becomes a market order and fills immediately, but in a fast move you can fill well past your trigger (slippage); a stop-limit becomes a limit order, protecting your price but risking no fill at all if price blows straight through. Fast or thin names punish the wrong choice — many momentum traders accept slippage on a stop-market to guarantee the exit.
See also: Stop loss · Limit order · Trailing stop
A run of consecutive wins or losses. Streaks are part math, part psychology — a losing streak can wreck confidence and tempt revenge trades; a winning streak can breed overconfidence and oversizing. Journaling them helps you answer the pattern instead of the emotion.
See also: Green day · Win rate · Equity curve
The set price at which an option can be exercised — where a call buyer can buy, or a put buyer can sell, the underlying. The strike relative to the current stock price is what makes an option in-, at-, or out-of-the-money, and it's baked into the contract's symbol.
See also: Moneyness · In-the-money · Expiration date
A turn at a supply or demand zone — a price area where past selling (supply) or buying (demand) was heavy enough to stall or flip price before. A pivot off demand can launch a bounce; a pivot off supply can cap a rally. Direction depends on which zone price is reacting to.
See also: Support · Resistance · Support/resistance flip
A key price level where buying has repeatedly stepped in to halt a decline. The mirror image of resistance.
See also: Resistance · Breakdown · Support/resistance flip · 52-week low
When a broken level switches roles — old resistance that price clears becomes new support on the pullback (bullish), and old support that breaks becomes new resistance (bearish). The flipped level gives traders a clean spot to enter with a tight stop.
See also: Support · Resistance · Breakout · Multipoint confluence
A style that holds positions for several days to a few weeks, aiming to capture one "swing" in price rather than scalping intraday wiggles or investing for years. Swing traders accept overnight and weekend risk — gaps on news while they're out of the market — in exchange for needing far less screen time than a day trader. It leans on daily charts, support and resistance, and catalysts that play out over days.
See also: Day trading · Position trading · Investing
Short for ticker symbol — the letter code that identifies a stock (e.g., NVDA). Same thing as a ticker; 'symbol' is the field name many platforms use.
When one stock moves and drags related names with it. A catalyst in a sector leader — or a hot theme — often lifts its peers, even without news of their own. Momentum traders watch the leader for the catalyst, then look to the "sympathy" names for a second wave. (The move can fade just as fast when the leader cools.)
Trading by a fixed, pre-defined set of rules — entries, exits, and size are decided in advance and followed the same way every time, whether run by hand off a checklist or fully automated. The opposite of discretionary trading. The appeal is that it strips in-the-moment emotion out of the decision; the catch is that a rulebook is only as good as the edge behind it, and markets shift. Trend-following is the classic systematic approach.
See also: Discretionary trading · Trend-following · Backtest
A preset order or target that locks in gains at a chosen price — the upside mirror of a stop loss.
See also: Trim · Scaling in · Trailing stop · Close
Reading price and volume on a chart — patterns, levels, indicators like VWAP and moving averages — to judge the likely next move, rather than analyzing the company's financials (that's fundamental analysis). Momentum trading leans heavily on it.
See also: Fundamental analysis · Price action · Chart types · Indicators
The Greek that measures time decay — how much value an option loses each day just from time passing, all else equal. Theta is negative for buyers (it works against you) and accelerates as expiration nears. It's the rent option buyers pay and the income option sellers collect.
See also: Extrinsic value · Expiration date · IV crush
The smallest increment a price can move — for most stocks a penny ($0.01). “Ticking up” means each successive trade prints a little higher; on time & sales, every tick is one execution.
See also: Spread · Bid · Ask · Time & Sales
The short letter code that identifies a stock — AAPL for Apple, TSLA for Tesla. Also called the ticker symbol; it's how you pull up a stock on any platform.
The scrolling line of symbols and prices (like the one across the top of this site). Historically a printed paper tape; today it's the live crawl. Different from Time & Sales, which lists individual trades for one stock.
See also: Time & Sales · Quote · Level 1
Often called 'the tape' — the running, time-stamped list of every executed trade in a stock (price, size, time). Watching it closely is 'reading the tape.'
See also: Level 2 · Ticker tape · Order book
How long an order stays active. The common beginner choices are Day (expires at the close if unfilled) and GTC, 'good-til-canceled' (carries over until it fills or you cancel it).
See also: Day order · Good Till Cancelled order · Order
The slice of time each candle represents — and how often the chart prints a new one. Common intraday intervals are 1-minute, 5-minute, and 15-minute, plus the daily for the bigger picture. Also called the timeframe.
See also: Chart types · Top-down analysis · Intraday
Reading the market from the biggest picture down to the smallest before you act — macro (SPY/QQQ, VIX), then the stock’s sector, then the daily chart, then the intraday chart, then the entry trigger. Also called multi-timeframe analysis. When every level agrees, that top-down confluence — the most complete of the three forms of confluence — is a high-probability signal; if any level fails, you pass.
See also: Confluence · Multipoint confluence · Sector · Trend
The hardware a trader works from — monitors, a fast machine, a dock, hotkeys. A clean multi-monitor desk lets you watch scanners, charts, and order entry at once instead of alt-tabbing at the worst moment.
A written set of rules that defines how you trade before any money is on the line: which setups you take, your entry and exit criteria, position sizing, daily loss limits, and when to stop for the day. Its whole job is to take in-the-moment emotion out of the decision. Deciding your exit before you enter is the heart of it.
See also: Trading psychology · Risk management · Daily max loss · Conviction
The mental and emotional side of trading: managing fear, greed, FOMO, and the urge to revenge-trade so you follow your plan instead of your feelings. Most blown accounts trace back to a psychology failure, not a bad strategy — the setup was fine, the discipline wasn't. It is the umbrella over most of the Mindset terms here: bias, chasing, conviction, overtrading, and revenge trading are all trading psychology in action.
See also: Bias · FOMO · Revenge trading · Conviction
A stop loss that automatically follows price in your favor, locking in gains as a trade works. You set it a fixed distance away — a dollar amount or a percentage — and as price rises the stop ratchets up with it; when price reverses by that distance, it triggers. Crucially, it never moves backward, so it lets a winner keep running while protecting the profit you have built. The tradeoff: set it too tight and normal wiggle shakes you out early.
See also: Stop loss · Stop order · Take profit
The general direction price is travelling over time — higher highs and higher lows is an uptrend, lower highs and lower lows a downtrend, sideways is a range. "The trend is your friend": momentum strategies are built on trading with it, not fighting it.
See also: Trendline · Trend-following · Moving average · Consolidation
A strategy that buys strength and rides an established trend rather than trying to predict tops and bottoms: cut losses quickly, let winners run. It accepts a lower win rate in exchange for a few outsized winners, so risk/reward and discipline matter more than being right often. The methodology the legendary Turtle Traders were taught, and the backbone of momentum trading.
See also: Systematic trading · Trend · Moving average · Momentum
A straight line drawn along a series of highs or lows to show a trend's direction and slope. Connect the higher lows in an uptrend, or the lower highs in a downtrend. Traders watch for price to bounce off a trendline (support/resistance) or break through it (a possible trend change). Simple, subjective, and only as good as the points you pick.
See also: Trend · Support · Resistance · Breakout
A consolidation pattern where price coils into a narrowing range before breaking out. An ascending triangle (flat top, rising lows) leans bullish; a descending triangle (flat bottom, falling highs) leans bearish; a symmetrical triangle (both converging) can break either way. The tightening is energy building — direction is confirmed by which side breaks, on volume.
See also: Wedge · Consolidation · Breakout
Selling part of a position to bank some profit (or cut risk) while staying in for the rest of the move.
See also: Scaling in · Take profit · Runners
How much of a stock's float (or total shares) trades in a given period, often shown as a percentage. When turnover reaches 100% of the float, the float has rotated once — see float rotation.
See also: Float rotation · Volume · Float
A two-candle pattern where consecutive candles share almost the same high (tweezer top) or the same low (tweezer bottom) — a level that got tested twice and held. Tweezer tops hint at resistance and a possible turn down; tweezer bottoms hint at support and a possible bounce.
See also: Doji · Reversal · Support/resistance flip
The stock (or ETF or index) an option is written on — what the contract derives its value from. Trade AAPL calls and AAPL is the underlying; the option's price moves as the underlying moves. Every other options term ultimately points back to it.
See also: Options · Strike price
A spike in options volume or open interest well out of line with a contract's norm — a large sweep or block that some read as informed money positioning. It's a popular order-flow tell, but a noisy one: much of it is hedging, spreads, or dealer flow rather than directional bets, so treat it as a clue, not a conviction.
See also: Open interest · Volume
The Greek that measures how much an option's price moves for a one-point change in implied volatility. Long options have positive vega — they gain when IV rises (fear, uncertainty, pre-earnings) and lose when it falls. Vega is why an option can lose money even when the stock moves your way, if volatility drops (see IV crush).
See also: Implied volatility · IV crush
The Cboe Volatility Index — a real-time gauge of how much volatility traders expect in the S&P 500 over the next month, derived from options prices. Nicknamed the "fear index," it usually spikes when the market drops and falls when things are calm, so it tends to move opposite to stocks. Day traders read a rising VIX as a stormier, riskier tape (bigger swings, more failed setups) and a low VIX as complacency.
See also: Volatility · Market sentiment · Beta
How much and how fast a price moves. High volatility means big, quick swings — more opportunity and more risk. Small caps are highly volatile, which is exactly why momentum traders watch them.
See also: VIX · Implied volatility · ATR · Beta
The number of shares traded over a period. Volume confirms moves — breakouts and momentum need volume behind them to be trusted.
The number of contracts traded today. On its own it only shows today's activity, so it's read alongside open interest (the total contracts still open): rising volume with rising open interest means new positions are being built, not just the same contracts changing hands.
See also: Open interest · Liquidity · Relative volume
Volume-Weighted Average Price: the day's average price weighted by volume. Many momentum traders treat holding above VWAP as bullish and losing it as a warning. It's one of the A+ checklist boxes.
See also: VWAP reclaim · Moving average · High of day
When a stock that slipped below VWAP pushes back above it and holds — flipping the day's average price from resistance back to support. Momentum traders read a clean reclaim as strength returning, and often use VWAP itself as the risk line.
See also: VWAP · Support/resistance flip · Breakout
A tax rule that disallows the loss when you sell a security at a loss and buy the same (or a "substantially identical") one back within 30 days, before or after — a 61-day window in total. The disallowed loss is not gone forever; it gets added to the cost basis of the replacement shares. It catches active traders constantly, since rapidly re-entering the same ticker is routine. It does not stop you trading — it just changes how the loss is counted at tax time. (General information, not tax advice — check with a tax professional.)
See also: Cost basis · Short-term capital gains · Cover
A curated short list of stocks you're monitoring for setups, usually built from your scans and screens before the session so you're watching a handful, not the whole market.
A pattern where two converging trendlines both slope the same way. A rising wedge (both lines up) is typically bearish — the advance is losing steam; a falling wedge (both down) is typically bullish. Counter-intuitive at first: the direction of the slope often signals the opposite outcome on the breakout.
The thin lines above and below a candle's body, marking the high and low reached during that period — also called shadows. The wick is where the story is: a long upper wick means a push got rejected; a long lower wick means a dip got bought. Body shows where price settled; wicks show the fight to get there.
See also: Candlestick · Doji · Hammer · Green and red
A momentum oscillator scaled −100 to 0, close in spirit to the stochastic: it measures where the latest close sits within the recent high-low range. Near 0 is overbought; near −100 oversold.
See also: Stochastic Oscillator · RSI · Overbought
The share of your trades that close green — 6 winners in 10 is a 60% win rate. On its own it's misleading: a 40% win rate can be very profitable if winners dwarf losers, and a 70% win rate can still bleed if the losses are huge. Always pair it with average R and expectancy.
See also: Expectancy · Profit factor · Streak · R
The seller of an option — the one who writes the contract, collects the premium up front, and takes on the obligation to deliver if assigned. A writer's max gain is the premium; a naked writer's risk can be large or unlimited. The opposite side of the holder.
See also: Holder · Premium · Naked · Assignment
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