Trading terms, defined.

A very short-term style where a trader takes many small trades per session — seconds to a few minutes each — trying to capture tiny price moves. Depends on tight spreads and low commissions.

Example: Buying 100 shares of SPY at 452.10 and selling at 452.18 within 30 seconds for an 8-cent gain.

Opening and closing positions within the same trading session so nothing is held overnight. Typical holds run from minutes to a few hours.

Holding positions for several days to a few weeks to capture a multi-day move. Usually operated on the daily chart.

The longest-timeframe active style — holding trades for weeks to months based on a macro or fundamental thesis.

A strategy that buys assets that are already rising (or shorts ones already falling), betting the trend will continue. Works best in trending markets.

Example: A stock breaks to a new 20-day high on 2× average volume; a momentum trader buys the breakout with a stop below the prior high.

The opposite of momentum — fading extreme moves back toward an average. Works best in range-bound markets.

Example: RSI drops to 22 on an oversold pullback; a mean-reversion trader buys expecting a bounce toward the 20-day SMA.

The smallest standard price move in a forex pair. For most pairs a pip is the 4th decimal (0.0001); for JPY pairs it is the 2nd decimal (0.01).

Example: EUR/USD moves from 1.0850 to 1.0855 — that is 5 pips.

The trade size in a forex order. A standard lot is 100,000 units of the base currency, a mini lot is 10,000, and a micro lot is 1,000.

Because FX trades 24/5, activity clusters into four regional sessions: Sydney, Tokyo, London, and New York. The London/New York overlap (roughly 8am–12pm ET) is the busiest and typically most volatile window.

Borrowing a low-yielding currency to buy a higher-yielding one, earning the interest-rate differential. Profitable in calm markets, brutal in shocks.

A schedule of upcoming macroeconomic releases (NFP, CPI, rate decisions) tagged with expected market impact. This site pulls the ForexFactory calendar directly into every forex pair page.

The minimum price increment a futures contract can move. Each contract has its own tick size and dollar value per tick.

Example: One tick on ES (E-mini S&P 500) = 0.25 index points = $12.50 per contract.

The dollar value assigned to one full point of price movement in a futures contract.

Example: ES multiplier is $50 — so a 10-point move = $500 per contract.

Closing an expiring futures contract and reopening the same exposure in the next contract month, so the position continues past expiration.

Example: In mid-December an ES trader rolls from ESZ5 (December) to ESH6 (March) as volume shifts to the new front month.

CME's electronic trading platform that runs the near-24-hour futures session, including the overnight window between US closes and opens.

Money the broker requires you to post to open or hold a leveraged position. Different products use different margin rules: stocks use Reg-T (usually 50%), futures use performance-bond margin (often 5-10% of notional), forex margins depend on leverage tier.

The ratio of position size to the cash you actually put up. 50:1 leverage means $1,000 controls $50,000 of exposure — and a 2% adverse move wipes the account.

A broker demand to add funds when your account equity falls below the required maintenance margin. If not met, the broker liquidates positions.

US Pattern Day Trader rule: cash margin accounts under $25,000 are limited to 3 day trades in any rolling 5 business days. Cash accounts and futures accounts are not subject to PDT.

The gap between the highest price a buyer will pay (bid) and the lowest a seller will accept (ask). Wider spreads = higher round-trip cost, which matters most for scalpers.

The difference between the price you expected and the price you actually got filled at. Common on market orders during news or thin liquidity.

Relative Strength Index — a 0-100 momentum oscillator. Above 70 is often called overbought, below 30 oversold, but in strong trends RSI can stay stretched for a long time.

Moving Average Convergence Divergence — a trend/momentum indicator built from two EMAs and a signal line. Traders watch bullish/bearish crossovers and histogram flips.

Volume-Weighted Average Price — the intraday average price weighted by volume. Institutions use it as an execution benchmark; day traders use it as a mean line.