📘 Glossary of Trading Terms
Basic Terms
- Bid
The highest price a buyer is willing to pay for a stock or asset. - Ask
The lowest price a seller is willing to accept. - Spread
The difference between the bid and ask price. - Volume
The number of shares or contracts traded in a given period. - Liquidity
How easily an asset can be bought or sold without affecting its price.
Trading Essentials
- Support
A price level where a stock tends to stop falling and may bounce back up. - Resistance
A price level where a stock tends to stop rising and may reverse downward. - Breakout
When a stock moves above resistance or below support, often with high volume. - Pullback
A temporary dip in price during an overall upward trend. - Trend
The general direction of price movement—up, down, or sideways.
Risk & Strategy
- Stop-Loss
An order that automatically sells your position if the price drops to a set level. - Take Profit
An order that locks in gains by selling your position once a target price is hit. - Risk-to-Reward Ratio (R:R)
The ratio comparing potential loss to potential gain on a trade. - Position Size
The amount of shares or contracts you take in a single trade, based on your risk tolerance. - Leverage
Using borrowed funds to increase the size—and potential risk—of a trade.