Every term below is defined in one to three sentences, in plain English, with a link to the guide that covers it in depth where one exists. Use the letter bar to jump around.

0-9

52-week high / low
The highest and lowest prices a stock has traded at over the past year. Widely watched as reference levels; a breakout to a new 52-week high is a common momentum signal.

A

After-hours trading
Trading that takes place after the regular session closes (after 4:00 p.m. Eastern for US stocks). Volume is thin, spreads are wide, and prices can move sharply on earnings releases.
Ask (offer)
The lowest price a seller is currently willing to accept for a stock. When you buy with a market order, you pay the ask. See how the stock market works.
Average down
Buying more of a stock after its price has fallen to lower your average cost. Investors sometimes do it deliberately; for traders it usually means adding to a losing position instead of honoring a stop.
Average true range (ATR)
A measure of how much a stock typically moves in a period, including gaps. Traders use multiples of ATR to set stop-loss distances outside normal noise.

B

Bear market
A prolonged decline in prices, conventionally defined as a drop of 20% or more from a recent high. The opposite of a bull market.
Beta
A measure of how much a stock moves relative to the overall market. A beta of 1.5 means the stock has tended to move 1.5% for every 1% move in the index.
Bid
The highest price a buyer is currently willing to pay for a stock. When you sell with a market order, you receive the bid.
Bid-ask spread
The gap between the bid and the ask. It is the implicit cost of every round-trip trade, even at a commission-free broker, and it widens in thinly traded stocks and outside regular hours.
Blue chip
A large, well-established, financially sound company with a long record, such as the members of the Dow Jones Industrial Average. Generally less volatile than smaller stocks.
Bracket order
An entry order submitted together with a profit-target limit order and a stop-loss order. When one exit fills, the other is canceled (also called OCO, one-cancels-other).
Breakout
A move in price above a resistance level or below a support level, ideally on higher-than-normal volume. See technical analysis basics.
Broker
A regulated firm that holds your cash and securities and routes your orders to the market. Choosing one is covered in how to start trading stocks.
Bull market
A prolonged rise in prices, usually accompanied by optimism. Often defined as a 20% rise from a recent low.

C

Candlestick chart
A price chart where each period is drawn as a candle showing the open, high, low, and close. The standard chart type on trading platforms.
Capital gains
The profit from selling an asset for more than you paid. In the US, gains on holdings of a year or less are taxed as ordinary income; longer holdings qualify for lower long-term rates.
Cash account
A brokerage account in which you can only trade with money you have deposited and that has settled. The recommended starting point for beginners, as opposed to a margin account.
Catalyst
A scheduled or unexpected event likely to move a stock's price, such as an earnings report, a product launch, a regulatory decision, or an index inclusion.
Circuit breaker
An exchange rule that pauses trading temporarily after an extreme move. US markets halt for 15 minutes if the S&P 500 falls 7% or 13% from the prior close, and for the day at 20%; individual stocks have their own volatility halts.
Commission
A fee a broker charges to execute a trade. Many US brokers charge zero commission on stocks and ETFs; fees still apply to other products and in many other countries.

D

Day order
An order that expires at the end of the current trading session if it has not been filled. The default time in force at most brokers.
Day trading
Opening and closing positions within the same trading session, holding nothing overnight. Compared with other styles in day trading vs. swing trading.
Dividend
A cash payment a company makes to shareholders out of its profits, usually quarterly. Not all companies pay one; growth companies often reinvest instead.
Drawdown
The decline in an account from its highest value to a subsequent low, as a percentage. Limiting drawdowns is the central goal of risk management, because recovery requires a larger percentage gain than the loss.

E

Earnings per share (EPS)
A company's net income divided by its shares outstanding. The most quoted profit figure and the denominator of the P/E ratio. See fundamental analysis basics.
Earnings report
A company's quarterly announcement of revenue, profit, and guidance. The most reliable source of large single-day price moves in individual stocks.
ETF (exchange-traded fund)
A fund that holds a basket of assets, such as every stock in the S&P 500, and trades on an exchange like a single stock. A common way to trade or invest in a whole market or sector at once.
Exchange
A regulated marketplace where securities are listed and traded, such as the NYSE, Nasdaq, or London Stock Exchange.
Expectancy
The average profit or loss per trade a strategy produces over many trades: (win rate × average win) − (loss rate × average loss). A positive expectancy over a large sample is the only real evidence of an edge.

F

Fill
The execution of an order. A "partial fill" means only some of the shares were traded; the fill price is the price you actually got.
Float
The number of a company's shares available for public trading, excluding shares held by insiders and large locked-in holders. Low-float stocks can move violently on modest volume.
Fractional share
Less than one whole share of a stock, offered by many brokers so that investors can buy a dollar amount rather than a share count.
Fundamental analysis
Evaluating a company's value from its financial statements, growth, competitive position, and management. Covered in fundamental analysis basics.

G

Gap
A jump in price between one session's close and the next session's open, leaving a blank space on the chart. Gaps usually follow news released outside market hours, and stop-loss orders fill at the new price, not the stop price.
Good till canceled (GTC)
A time-in-force setting that keeps an order active until it fills or you cancel it, subject to the broker's maximum (often 60 to 90 days). The right choice for stop-loss orders.

I

Index
A basket of stocks whose combined value is used to represent a market or sector, such as the S&P 500, Nasdaq-100, or FTSE 100. You cannot buy an index directly, but ETFs track them.
Initial public offering (IPO)
The first sale of a company's shares to the public, after which the shares trade on an exchange. IPO stocks are often volatile in their first months.

L

Leverage
Using borrowed money or derivatives to control a position larger than your capital. It multiplies gains and losses equally, and can produce losses greater than your deposit.
Limit order
An order to buy at a specified price or lower, or sell at a specified price or higher. It guarantees the price but not that the order fills. See stock order types.
Liquidity
How easily a stock can be bought or sold without moving its price. Liquid stocks have high volume and tight spreads; illiquid ones have the opposite.
Long
Owning a stock in expectation that its price will rise. "Going long" simply means buying.

M

Margin
Money borrowed from your broker to buy securities, using your account as collateral. A margin account is required for short selling and for frequent day trading in the US.
Margin call
A demand from your broker to deposit more money or sell positions because your account equity has fallen below the required minimum. If you do not act, the broker can sell your positions for you.
Market capitalization
The total value of a company's shares: share price multiplied by shares outstanding. Companies are grouped as large-cap, mid-cap, and small-cap by this figure.
Market maker
A firm that continuously quotes both a bid and an ask for a stock, profiting from the spread and providing liquidity to everyone else.
Market order
An order to buy or sell immediately at the best available price. It guarantees execution but not price, and is risky in thin markets or at the open.
Moving average
The average closing price over the last N periods, plotted as a line that smooths out noise. The 50-day and 200-day moving averages are the most widely watched.

O

Options
Contracts that give the right, but not the obligation, to buy (call) or sell (put) a stock at a set price before a set date. Powerful, complex, and capable of expiring worthless; not a beginner's product.
Overtrading
Taking more trades than your plan calls for, usually out of boredom, impatience, or the urge to recover a loss. One of the most common and expensive beginner habits.

P

Paper trading
Simulated trading with fake money and real market prices, used to learn a platform and test a strategy without risk.
Pattern day trader (PDT)
A US regulatory designation for anyone who makes four or more day trades within five business days in a margin account. Pattern day traders must keep at least $25,000 of equity in the account.
Position
Your holding in a particular security. A long position means you own it; a short position means you have sold borrowed shares.
Position sizing
Calculating how many shares to trade so that the loss at your stop equals a fixed fraction of your account, typically 1%. The core skill in risk management.
Pre-market
Trading before the regular session opens (before 9:30 a.m. Eastern for US stocks). Like after-hours trading, it is thin and volatile.
Price-to-earnings ratio (P/E)
Share price divided by earnings per share. A quick measure of how expensive a stock is relative to its profits, meaningful only when compared with peers, history, and growth.
Pullback
A short-term move against the prevailing trend, such as a dip within an uptrend. Many strategies buy pullbacks rather than chasing new highs.

R

Resistance
A price level above the current price where rallies have previously stalled because sellers appeared. Often used for profit targets and breakout entries.
Risk/reward ratio
The potential loss at your stop compared with the potential gain at your target. A 1:2 ratio risks $1 to make $2, and needs only a 33% win rate to break even.
RSI (relative strength index)
A momentum indicator on a scale of 0 to 100. Readings above 70 are called overbought and below 30 oversold, but strong trends can hold those readings for a long time.

S

Scalping
An extreme form of day trading that aims for very small profits on many trades held for seconds or minutes. Heavily dependent on costs and execution speed; rarely viable for retail traders.
Sector
A group of companies in the same part of the economy, such as technology, healthcare, energy, or financials. Stocks in the same sector tend to move together.
Settlement
The official transfer of shares and cash after a trade. US stock trades settle one business day after the trade date (T+1). In a cash account, you cannot withdraw or reuse sale proceeds until they settle.
Short selling
Borrowing shares, selling them, and aiming to buy them back later at a lower price. Profits from falling prices, but losses are theoretically unlimited. Requires a margin account.
Short squeeze
A sharp price rise triggered when short sellers are forced to buy back shares to limit losses, which pushes the price even higher and forces more of them to cover.
Slippage
The difference between the price you expected and the price your order actually filled at. Common with market orders, in fast markets, and in illiquid stocks.
Stop-limit order
A stop order that becomes a limit order, rather than a market order, when the stop price is reached. It protects against a bad fill but may not fill at all if the price moves through the limit.
Stop-loss order
An order that becomes a market order to sell when the stock trades at or below a set stop price. The standard tool for automatically limiting a loss. See stock order types.
Support
A price level below the current price where declines have previously stopped because buyers appeared. Commonly used to place stop-losses just beneath it.
Swing trading
Holding positions for several days to a few weeks to capture a single move, usually using daily charts. Generally the most practical style for people with a job.

T

Technical analysis
Using price charts, volume, and indicators to make trading decisions. Covered in technical analysis basics.
Ticker symbol
The short code that identifies a stock on an exchange, such as AAPL for Apple or MSFT for Microsoft.
Time in force
How long an order stays active: day, good till canceled, immediate or cancel, or fill or kill.
Trading journal
A record of every trade, including the setup, entry, stop, exit, size, result, and lessons. The tool that turns experience into improvement.
Trading plan
A written set of rules covering what you trade, when you enter and exit, how much you risk, and when you stop for the day. Written before trading, followed during it.
Trailing stop
A stop order whose trigger price follows the stock upward by a set amount or percentage but never moves down, locking in gains as a trade works.
Trend
The general direction of price over a timeframe. An uptrend makes higher highs and higher lows; a downtrend makes lower highs and lower lows.

V

Volatility
How much and how quickly a price moves. High volatility means bigger swings in both directions, which means both more opportunity and more risk per share.
Volume
The number of shares traded in a period. Rising volume on a move suggests conviction behind it; a breakout on low volume is less trustworthy.
VWAP (volume-weighted average price)
The average price of a stock during the day, weighted by volume at each price. Day traders and institutions use it as a benchmark for whether they are buying above or below the day's average.

W

Watchlist
A list of stocks you are monitoring for potential trades. Keeping a short, focused watchlist is more effective than scanning the whole market every day.
Win rate
The percentage of trades that are profitable. Less important than it sounds: a 40% win rate with large wins and small losses beats a 70% win rate with the reverse.

Y

Yield (dividend yield)
A stock's annual dividend divided by its price, expressed as a percentage. A 4% yield means $4 of dividends per year for every $100 invested at the current price.