36 terms
Trading Glossary
Every term you'll meet on a chart, in a strategy write-up or inside the SimpleAlgo indicators — explained in one clear paragraph, without the jargon loop.
Alert
Execution- An automated notification triggered when a chart condition is met, so you can trade a plan without staring at screens all day.Alerts docs
Backtest
Indicators- Applying a set of rules to historical data to estimate how they would have performed. Useful for pattern discovery, dangerous when over-fitted to one market or period.
Break of Structure (BOS)
Market Structure- Price closing beyond the most recent swing point in the direction of the trend, confirming that the existing trend is continuing rather than stalling.
Change of Character (CHoCH)
Market Structure- The first break against the prevailing structure — an uptrend taking out a prior higher low, for example. It warns that control may be shifting to the other side.
Confluence
Indicators- Several independent signals — structure, momentum, a key level, the higher timeframe — pointing the same way at the same price. Confluence raises probability, not certainty.
Consolidation
Market Structure- A period where price moves sideways in a contained range while the market digests a prior move. Breakouts from tight consolidation tend to travel further than breakouts from wide chop.
Divergence
Indicators- When price makes a new extreme but the oscillator does not. It signals weakening participation and often precedes a pause or reversal — but it needs structure confirmation.
Drawdown
Risk & Sizing- The peak-to-trough decline in account equity, usually shown as a percentage. A 50% drawdown needs a 100% gain to recover, which is why capping it matters more than chasing returns.Drawdown calculator
Expectancy
Risk & Sizing- The average amount you expect to win or lose per trade: (win rate x average win) minus (loss rate x average loss). Positive expectancy is the only thing that makes a strategy worth repeating.Win rate & expectancy calculator
Fair Value Gap (FVG)
Order Flow- An imbalance left when price moves so quickly that a three-candle window leaves an untraded gap. Markets frequently return to fill part of that gap.
Higher High / Higher Low
Market Structure- Consecutive peaks and troughs each above the last. Together they define an uptrend and are the cleanest visual confirmation that buyers remain in control.
Indicator
Indicators- A calculation applied to price or volume that summarises market behaviour visually. Indicators describe what price has already done; they do not predict the future on their own.SimpleAlgo indicator suite
Leverage
Risk & Sizing- Borrowed exposure that lets a small deposit control a larger position. Leverage changes how much margin a trade consumes; it does not change how much you should risk.
Limit Order
Execution- An instruction to trade only at a specified price or better. It controls price but not whether you get filled.
Liquidity
Order Flow- The pool of resting orders available at a price. Clusters of stop losses above highs and below lows are the liquidity that large participants trade into.
Liquidity Sweep
Order Flow- A fast push beyond a prior high or low that triggers stops, then reverses. It is one of the most common ways a genuine reversal begins.
Market Order
Execution- An instruction to trade immediately at the best available price. It guarantees a fill but not the price.
Market Structure
Market Structure- The sequence of swing highs and lows that defines whether a market is trending or ranging. Higher highs with higher lows is bullish structure; lower highs with lower lows is bearish structure.Market Structure course
Momentum
Indicators- The rate at which price is changing. Accelerating momentum supports trend continuation; fading momentum into a new high is a classic divergence warning.
Moving Average
Indicators- The average closing price over a lookback window, plotted as a line to smooth noise. Slope shows trend direction; the distance from price shows how stretched a move is.
Multi-Timeframe Analysis
Indicators- Reading a higher timeframe for direction and a lower timeframe for entry timing, so you stop taking counter-trend trades that look good in isolation.Multi-timeframe course
Order Block
Order Flow- The last opposing candle before a strong impulsive move, marking an area where significant orders were filled. Often revisited before the move continues.Smart money docs
Oscillator
Indicators- An indicator that moves between fixed bounds to show momentum extremes. Useful for spotting exhaustion inside a range, unreliable as a standalone reversal signal in a strong trend.Simple Oscillator docs
Pip
Risk & Sizing- The smallest standard price increment in a forex pair — 0.0001 for most pairs, 0.01 for yen crosses. Pip value depends on lot size and the quote currency.Pip value calculator
Position Size
Risk & Sizing- The quantity traded, derived from risk per trade divided by the distance between entry and stop loss. Correct sizing makes stop distance a planning choice rather than a survival risk.Lot size calculator
Resistance
Market Structure- A price area where selling pressure has repeatedly capped an advance. Broken resistance often flips into support on the retest.Support & resistance guide
Risk Per Trade
Risk & Sizing- The fixed percentage of account equity you are willing to lose on any single position — commonly 0.5% to 2%. It is the input that determines position size, not the other way around.Position size calculator
Risk-Reward Ratio
Risk & Sizing- Potential profit divided by potential loss on a trade. A 3:1 setup can be wrong twice for every win and still make money, which is why the ratio matters more than the win rate alone.Risk/reward calculator
Slippage
Execution- The difference between the price you expected and the price you were filled at, widest around news and at the open of a session.
Spread
Execution- The gap between bid and ask — the immediate cost of entering a trade. On short timeframes, spread can consume a meaningful share of the expected move.
Stop Loss
Risk & Sizing- A pre-set exit that closes the trade when price proves the idea wrong. Placed at structural invalidation, not at an arbitrary dollar amount.
Support
Market Structure- A price area where buying interest has repeatedly stopped a decline. Support is a zone, not a single line, and becomes less reliable each time it is retested.
Trailing Stop
Risk & Sizing- A stop that follows price as the trade moves in your favour, locking in gains while giving the trend room to continue.
Trend Line
Market Structure- A line connecting successive swing lows in an uptrend or swing highs in a downtrend, used to visualise the slope of a move and flag when it decelerates.Trend line guide
Volatility
Indicators- How much price moves over a given period. Volatility should drive stop distance and target placement — the same fixed stop is far too tight in one regime and far too wide in another.
Volume
Order Flow- How much was traded in a period. Rising volume behind a breakout adds credibility; a breakout on thin volume is far more likely to fail.
Put the terms to work
SimpleAlgo marks structure, liquidity and momentum on your TradingView charts automatically, so these concepts show up as signals instead of homework.
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