Trading Principles and Terminology

These flashcards cover key terms and concepts related to trading, including candlestick anatomy, market trends, trading strategies, and order types.

A candlestick shows price movement in a __.

time period

The __ is the first price in the candle.

Open

The __ is the last price in the candle.

Close

The highest price during the candle is known as the __.

High

The lowest price during the candle is known as the __.

Low

The skinny line showing high/low in a candlestick is called the __.

Wick

The thick part of the candlestick that shows open to close is called the __.

Body

An __ is the general direction of price.

Trend

A higher highs and higher lows pattern identifies a __.

Uptrend

A lower highs and lower lows pattern indicates a __.

Downtrend

When price is stuck between levels, it is in a __.

Range/Sideways

If someone is bullish, they are expecting the price to __.

go up

If someone is bearish, they are expecting the price to __.

go down

An __ is where you buy into a trade.

Entry

An __ is where you sell out of a trade.

Exit

A __ is a trading pattern or strategy you wait for.

Setup

__ provides proof that the setup is valid.

Confirmation

A __ is a small dip before continuing the trend.

Pullback

A __ indicates a change in the direction of a trend.

Reversal

__ refers to the speed and strength of price movement.

Momentum

__ measures how aggressively price moves.

Volatility

Volume is the total __ traded.

shares

__ is how easily you can buy or sell without price slipping.

Liquidity

The __ is the number of shares available for public trading.

Float

Relative Volume (RVOL) compares today's volume to __ volume.

normal

The __ is the highest price that buyers are willing to pay.

Bid

The __ is the lowest price that sellers are willing to accept.

Ask

The difference between bid and ask prices is called the __.

Spread

A __ is a price level where price usually bounces up.

Support

A __ is a price level where price usually gets rejected down.

Resistance

A __ occurs when price breaks above resistance and continues upward.

Breakout

A __ occurs when price breaks below support and continues downward.

Breakdown

A __ is when price breaks out or down, then reverses quickly.

Fakeout

Going __ means buying first and profiting if price goes up.

Long

Going __ means selling first and profiting if price goes down.

Short

To __ is to buy back shares to close a short position.

Cover

Position Size refers to the number of __ you trade.

shares

The __ is the ratio of money risked to money gained.

Risk/Reward Ratio

Max Loss Per Day is your daily loss __ before stopping.

limit

A __ order buys or sells immediately at the current price.

Market

A __ order buys or sells only at a chosen price.

Limit

A __ (SL) is an automatic exit to prevent a bigger loss.

Stop Loss

A __ (TP) is an automatic exit to lock in profit.

Take Profit

A __ is a stop loss that moves with the price as it goes up.

Trailing Stop