Every term a UK retail trader is likely to encounter — futures, crypto, technical analysis, risk, psychology and market structure. Plain-English definitions, no fluff.
An automated set of rules executing trades without human intervention. Most institutional flow is algorithmic; retail traders feel this in the form of sudden coordinated moves around levels and during news events.
Roughly 23:00–08:00 UTC. Quiet vol regime for indices; tighter ranges set during this session often define the day's initial liquidity pools (Asian high / low) that London and NY sessions hunt.
The lowest price a seller is willing to accept (also called the offer). The opposite side of the bid. The spread between bid and ask is a basic measure of liquidity and execution cost.
Average True Range. A measure of recent volatility, calculated as a moving average of the daily range (high − low) accounting for gaps. Used to size stops and targets relative to actual market noise rather than fixed pip/tick values.
Running a strategy on historical data to estimate its past performance. Critical caveat: real-world results are almost always worse due to slippage, gaps, regime change and the fact that backtests can be fitted to the past unintentionally.
The difference between a futures price and the underlying spot price. Positive basis (futures > spot) is contango; negative is backwardation. Carries information about supply/demand and roll yield in commodity markets.
A sustained downtrend, conventionally a 20% drop from recent highs. Different markets use different thresholds; the term is more about regime than a specific number.
The highest price a buyer is willing to pay. Opposite of the ask. You sell at the bid; you buy at the ask. The gap is the spread.
The difference between the highest bid and lowest ask. A direct measure of execution cost and liquidity. Tight spreads indicate liquid markets; wide spreads warn of thin conditions.
An indicator plotting a moving average plus and minus N standard deviations of price. Bands widen with volatility and contract in quiet markets. Useful for identifying overextension and volatility regime, not as a standalone signal.
When price breaks a recent swing high (in an uptrend) or swing low (in a downtrend), confirming trend continuation. In Smart Money Concepts, BOS distinguishes continuation from reversal. read more →
Price moving decisively beyond a defined level — support, resistance, range high/low, or chart pattern boundary. Most breakouts fail; the ones that work tend to do so with volume and follow-through within the same session.
A sustained uptrend, conventionally a 20% rise from recent lows. As with bear market, the label describes regime more than a strict number.
A price representation showing open, high, low and close for a given period. The body shows open-to-close range; wicks show the period's extremes. The fundamental unit of most modern chart reading. read more →
A derivative letting you speculate on price movement without owning the underlying. Common in UK retail trading. Tax treatment differs from spread betting; rules around overnight financing and leverage have been tightened by the FCA.
US Commodity Futures Trading Commission. Regulates futures markets, publishes the COT report, and is the body that shut down MyForexFunds in 2023.
A break of structure in the opposite direction to the prevailing trend — the first signal that the trend may be reversing. In SMC, CHoCH is the early-reversal counterpart to BOS. read more →
Reinvested gains earning on top of prior gains. Small consistent returns compound into large ones over time; the calculator on the site visualises this. read more →
Looking for evidence that supports the trade you've already committed to, while filtering out evidence against it. The most common cognitive trap in trading — the one your journal exists to catch. read more →
A prop firm rule that no single day's profit may exceed N% of total profits before a payout. Common cause of failed payouts; read the small print before paying for an evaluation. read more →
A futures market where the forward contract trades above spot. Implies a positive cost of carry. Long-only roll into contango costs money each month — the structural drag behind oil ETF underperformance.
Closing a near-expiry futures contract and opening the next month to maintain exposure. Roll dates create predictable mini-volatility events and price discontinuities you'll see on continuous charts.
A statistical measure (-1 to +1) of how two instruments move together. +1 is identical, -1 is opposite, 0 is independent. See the correlations dashboard for live values. read more →
Weekly CFTC report on futures positioning by trader category — commercials, large speculators, small speculators. Useful for sentiment context, not as a timing tool. read more →
Light Sweet Crude futures, traded on NYMEX. CL=F is the front-month continuous symbol. Structurally one of the most volatile commodities — vol of 50%+ annualised is common.
A pre-set maximum loss per day at which you stop trading. The single most protective discipline in retail trading. Without one you will eventually have a day that ruins a month. read more →
A trade taken outside your defined setups. Sometimes the right call; usually a sign you're chasing. Flag these in your journal. read more →
When price makes a new high (or low) but an oscillator does not. Often misread as a reversal signal — in strong trends, divergences persist for weeks before resolving.
The peak-to-trough decline in account equity. Maximum drawdown is the worst such decline. Required mental headroom is usually 2-3× whatever you think it'll be. read more →
US Dollar Index. A trade-weighted measure of the dollar against six major currencies (EUR-heavy). Inverse-correlated with most risk assets in normal regimes. read more →
A moving average that weights recent prices more heavily than older ones. Faster-reacting than SMA. Common periods: 9, 21, 50, 200.
A chart of your account balance over trades or over time. The shape matters more than the endpoint — smooth up-and-to-the-right beats a jagged climb with deep drawdowns. read more →
E-mini S&P 500 futures (CME). The most liquid US equity index futures contract. ES=F is the continuous symbol on Yahoo.
The qualifying period where you trade simulated capital under the firm's rules to earn a funded account. Most evaluations fail — that's the business model. read more →
Average expected profit per trade, given your win rate and average win/loss size. The single most useful trading statistic — a positive expectancy system can lose 60% of the time and still print money. read more →
Horizontal levels at 23.6%, 38.2%, 50%, 61.8%, 78.6% of a swing, used to anticipate pullback depth. Self-fulfilling to some extent because so many traders watch them.
Federal Open Market Committee. Sets US interest rates eight times per year. The single most impactful scheduled event for global markets. Most short-term strategies should stand aside through the announcement.
Fear of missing out. The compulsion to enter a trade you didn't plan because price is moving without you. The most common bad-entry trigger in retail. read more →
A prop firm account where you trade with the firm's simulated or real capital after passing evaluation. Profit splits typically 80/20 to 90/10 in your favour. read more →
In crypto perpetuals, a periodic payment between long and short holders that keeps the perp price tethered to spot. Positive funding = longs pay shorts; negative = shorts pay longs.
A three-bar pattern where the middle bar's range leaves a gap between bar 1's wick and bar 3's wick. Often acts as a magnet for return-to-fair-value moves. read more →
Options Greek measuring the rate of change of delta. Important for understanding why index moves can accelerate near option expiry — dealer hedging flows are gamma-driven.
A discontinuity between one bar's close and the next bar's open. Common at the open after weekends or news. Gaps often (but not always) fill.
Gold futures on COMEX. GC=F is the continuous symbol. Inversely correlated with DXY in normal regimes. Realised vol historically 12-20%.
An offsetting position taken to reduce risk on an existing position. Costs money in expectation but bounds your loss. Different from a stop — a hedge stays on; a stop closes the trade.
The longer-term chart context above your trading timeframe. Common pairings: trade the 5-minute, but check the 1-hour for trend, and the daily for context.
The high-low range of the first 60 minutes of the regular trading session. Acts as a reference structure for the rest of the day; breakouts of IB are a classic ORB setup.
A region of price where most of the move happened without two-way trade — usually associated with FVGs. Markets often retrace into imbalances to fill them.
A derived value plotted alongside price to describe market state. RSI, MACD, ATR, Bollinger Bands, EMAs are all indicators. None replace reading the chart itself.
Trading more capital than you own using borrowed funds. Magnifies both wins and losses. Futures and crypto perps are inherently leveraged; the leverage ratio dictates how fast you can blow up.
An order to buy below market or sell above market at a specified price or better. Does not execute unless price reaches your level. Trade off: you may not get filled.
The depth of orders available at and around current price. High liquidity = tight spreads, easy fills, low impact. Low liquidity = wide spreads, slippage, and the kind of moves that hunt stops.
A rapid move beyond a recent high or low designed to trigger stops, followed by a reversal. The classic stop-hunt. Common at obvious support/resistance levels. read more →
A position that profits if price rises. Opening a long means buying; closing a long means selling.
Moving Average Convergence Divergence. An indicator showing the difference between two EMAs, with a signal line. Useful for momentum context, not as a standalone entry signal.
The collateral required to hold a leveraged position. Initial margin opens it; maintenance margin keeps it open. Falling below maintenance triggers a margin call or forced liquidation.
A demand from your broker to deposit more funds because your position has moved against you and equity is below maintenance margin. Failing to meet it means forced liquidation.
A participant who provides two-sided quotes — bid and ask — and earns the spread. Modern markets are dominated by high-frequency market makers. They are not 'against you'; they're indifferent.
An order to buy or sell immediately at the best available price. Guaranteed fill, not guaranteed price. Use in liquid markets; avoid in thin ones.
A strategy or behaviour where price tends to return to an average level after extending away from it. Works in ranging markets, fails in trends. Bollinger band strategies are mean-reversion at heart.
Smaller-denomination versions of standard futures contracts. MES (1/10 of ES), MNQ (1/10 of NQ), MGC (1/10 of GC). Designed for smaller accounts to size sensibly.
Micro E-mini Nasdaq 100 futures. 1/10 the size of NQ. Each point = $2. The standard size for retail trading the Nasdaq.
An average of prices over the last N periods, plotted as a line. Smooths noise to reveal trend. SMA weights equally; EMA weights recent more heavily.
E-mini Nasdaq 100 futures (CME). Higher-vol than ES, dominated by tech. NQ=F is the continuous symbol. The retail favourite for intraday volatility.
A pair of linked orders where filling one cancels the other. Used for bracket exits: stop and target sit as OCO so only one can execute.
Open, High, Low, Close — the four data points of a candlestick or bar. The base unit of nearly all price analysis.
Strategy that takes a breakout of the day's initial high-low range (often the first 30 or 60 minutes). One of the oldest systematic futures strategies.
The last opposite-direction candle before an impulsive move. In SMC, treated as institutional intent zones that price often returns to. read more →
The stream of buy and sell orders hitting the book in real time. Reading order flow (via DOM, footprint charts) is a specialised skill — most retail traders use price action instead.
A condition where an oscillator (e.g., RSI > 70 or < 30) reads as stretched. Useful for context, dangerous as a standalone signal — strong trends stay overbought for weeks.
A crypto derivative contract with no expiry, kept tethered to spot via funding rates. The dominant form of crypto futures. BTC perp and ETH perp are the deepest derivatives markets in crypto.
A candle with a long wick on one side and a small body, indicating rejection of price at a level. Classic price-action signal at support/resistance.
In forex, the fourth decimal place of most currency pairs (0.0001). The basic measure of FX price movement. Not used in equities or futures (which use ticks).
How much of an instrument you buy or sell on a trade. The single biggest determinant of risk. Calculate from risk amount and stop distance, not from how strongly you feel about the trade. read more →
A self-rated A-D mark for how well you followed your plan on a given trade, independent of outcome. The most important column in any honest journal. read more →
Total gross profit divided by total gross loss. A profit factor above 1 is profitable; above 1.5 is good; above 2 is excellent. Use over 50+ trades; small samples lie.
A proprietary trading firm that funds traders who pass an evaluation. Modern retail prop firms (Apex, TopStep, MFFU, Tradeify) sell access for an evaluation fee. read more →
Result of a trade expressed as a multiple of the amount risked. A +2R trade made twice what you risked; a -1R trade lost exactly your planned risk. The neutral unit of trading. read more →
A period where price moves between defined support and resistance without trending. Mean reversion strategies thrive in ranges; breakout strategies starve.
A price level where selling has historically appeared, capping advances. Until broken, treated as a likely reversal zone. Once broken, often becomes support.
Taking a trade not because of a setup but to win back what you just lost. Almost always loses more. The reason your journal needs a state field. read more →
The probability of losing your entire account given your win rate, risk-per-trade and edge. The Monte Carlo calculator on the site simulates this for any parameter set. read more →
A regime where money flows out of risk assets (equities, crypto) into safe havens (dollar, treasuries, gold). Correlations cluster; diversification fails.
A regime where money flows into risk assets. The default state in trending bull markets. Tech outperforms, crypto rallies, dollar weakens, gold drifts.
An oscillator (0-100) measuring momentum. Conventionally overbought above 70, oversold below 30. Like all oscillators, more useful for context than entries.
E-mini Russell 2000 futures (CME). The small-cap US equity benchmark. Higher beta and vol than ES or NQ.
Very short-term trading targeting small price moves. Demands tight spreads, low commissions and intense focus. Most retail attempts at scalping fail on costs alone.
A defined, repeatable pattern that constitutes a tradable signal. If you can't name your setup before clicking buy, you don't have a trade — you have a guess. read more →
A position that profits if price falls. Achieved by selling first, buying back later. Standard in futures and crypto perps; restricted in some equity venues.
The difference between expected fill price and actual fill price. Worse in thin markets, around news, and in fast-moving conditions. Backtests typically underestimate it.
A framework focused on institutional order flow proxies — BOS, CHoCH, FVG, order blocks, liquidity sweeps. Popular on YouTube; works as a structural lens, not a magic system. read more →
The difference between bid and ask. Your immediate execution cost on entry. Tight spread = liquid market; wide spread = thin market or volatile conditions.
A UK-specific derivative letting you bet per point of movement. Tax-free for UK residents (treated as gambling, not investing). Functionally similar to a CFD with different tax treatment.
An order that closes a losing trade automatically at a pre-defined price. The single discipline that separates traders from gamblers. Plan it before entering, not after.
A price level where buying has historically appeared, halting declines. Until broken, treated as a likely reversal zone. Once broken, often becomes resistance.
A trade held for days to weeks, taking advantage of multi-day moves. Wider stops and targets than intraday; less screen time required.
An order that closes a winning trade automatically at a pre-defined price. Like stops, decide before entry. Half the work of disciplined trading is committing in advance.
The smallest price increment of a contract. ES ticks in 0.25 ($12.50/contract); NQ ticks in 0.25 ($5/contract); MNQ ticks in 0.25 ($0.50/contract). Critical for stop and target placement.
The minimum price move (tick size) and its dollar value (tick value). Position sizing depends on tick value — get this wrong and your 'small' trade is actually huge.
An emotional state of compromised decision-making, usually following a loss. Continued trading on tilt is the fastest path to a blow-up. Step away when you recognise it. read more →
A record of your trades plus the context that explains them — setup, state, plan, deviation, lesson. The only mechanism that turns experience into iteration. read more →
A stop loss that moves with price in your favour but never against you, locking in profit as the trade works. Trades open-loss for capped-win convexity.
A sustained directional move with higher highs and higher lows (up) or lower highs and lower lows (down). Trend-following strategies win in trends, lose in chop.
CBOE Volatility Index — the implied volatility of S&P 500 options over the next 30 days. The market's fear gauge. Above 20 = elevated, above 30 = stressed, above 40 = crisis. read more →
How much price moves over a given period, usually expressed as annualised standard deviation of returns. The fundamental measure of how much room a trade needs. read more →
Volume-Weighted Average Price. The average price weighted by volume traded at each level. Used by institutions as an execution benchmark; respected as support/resistance by other traders.
When price triggers your stop, then immediately reverses in your original direction. Common in low-conviction setups and around obvious levels. The cost of mechanical stops in noisy markets.
The percentage of trades that are winners. A surprisingly weak metric on its own — a 40% win rate at +2R per win beats a 70% win rate at +0.5R. Pair with average R always.
Knowing the vocabulary is the easy part. The hard part is the psychology of actually using what these terms describe in real trades. The Trading Psychology Series covers exactly that.
Read the Trading Psychology Series →