GLOSSARY

A flea market, but for one thing at a time. Sellers on one side, buyers on the other, everybody shouting numbers.

A place where buyers and sellers agree on a price for something.

The guy who runs the flea market. He does not buy or sell anything — he just makes sure nobody runs off with the money.

The company that matches buyers to sellers and guarantees the trade actually happens.

Your ride to the flea market. You do not get in the door without one.

The app or company that sends your order to the exchange for you.

A slice of a company. Own one slice of a thousand and you own a thousandth of the whole thing — the good and the bad.

A unit of ownership in a company.

The last number two people agreed on. Not what it is worth. Not what it should be. Just the last handshake.

The most recent price at which a trade actually happened.

The highest anybody is currently willing to pay you for it. Like the best offer on your used truck right now.

The highest price a buyer is currently willing to pay.

The cheapest anybody will currently sell it to you for. The lowest price on the lot.

The lowest price a seller is currently willing to accept.

The gap between what you can sell for and what you have to pay. Buy and instantly sell and you lose that gap — that is the house cut.

The difference between the bid and the ask.

A list of everybody waiting to buy, and everybody waiting to sell, stacked by price. It is literally where the name Bidness comes from — ask and bid.

The live list of resting buy and sell orders at each price.

How many people are lined up at each price. A deep book is a long line. A thin book is one guy and a folding chair.

How much size is waiting to trade at each price level.

A busy gas station versus an empty one. At the busy one you pull in, fill up, and leave. At the empty one the pump is slow, the price is weird, and you might be stuck there a while.

How easily you can get in and out at a fair price.

You saw $3.00 on the sign, you paid $3.06. Nobody cheated you — the price moved while you were reaching for your wallet.

The difference between the price you expected and the price you actually got.

How many cars came through the lot today. Big day or slow day.

The number of shares or contracts traded over a period.

Is today busy *for this place*? A hundred cars is a huge day at a corner store and a dead day at a dealership.

Today's volume compared with what that symbol normally does.

Store hours. The main doors open 9:30am Eastern and close at 4pm. There is a side door open before and after, but fewer people are inside.

The regular trading session, 9:30am–4:00pm ET on weekdays.

The side door before opening. Real trades, real prices, way fewer people — so prices jump around more.

Trading that happens before the 9:30am ET open.

The side door after closing. Same deal — thin, jumpy, easy to get a bad fill.

Trading that happens after the 4:00pm ET close.

You went to bed with it at $10 and woke up with it at $13. Nothing traded in between while you were asleep — it jumped.

A jump between one session's close and the next session's open.

The reason. Something happened — earnings, a court ruling, a buyout — and that is why it moved.

The news or event driving a move.

Report card day. Four times a year a company has to show its numbers, and the stock reacts to whether they beat expectations.

A company's quarterly financial results.

The nickname. Apple is AAPL. It is just shorthand so nobody has to type the whole company name.

The short code that identifies a tradeable instrument.

A picture of what the price has been doing, left to right, oldest to newest.

A visual record of price over time.

How much time each picture covers. A 5-minute chart is a stack of 5-minute snapshots. A daily chart is a stack of whole days.

How much time each bar on the chart represents.

A picture of a five-minute fight. The body shows where it started and ended. The wicks show how far each side pushed before getting shoved back.

A bar showing the open, high, low, and close for one period.

The final score. Where the fight started and where it ended.

The thick part of a candle, between the open and the close.

How far somebody got before they got shoved back. A long wick up means buyers pushed hard and lost the ground.

The thin line above or below the body, marking the high and low.

Which way the water is flowing. You can swim against it. It is just harder and you get tired faster.

The general direction price has been moving.

Each wave comes further up the beach than the last, and pulls back less far. That is a rising tide.

A pattern of successive peaks and troughs both moving up — the definition of an uptrend.

A washing machine. Lots of movement, nowhere to go. This is where accounts quietly bleed out.

A range-bound market with no sustained direction.

A hallway. Price bounces between a floor and a ceiling until something breaks one.

The zone between a level price keeps failing to break above and one it keeps failing to break below.

The floor. Price keeps dropping to it and bouncing, because that is where buyers keep showing up.

A price level where buying has repeatedly stopped a decline.

The ceiling. Price keeps bumping it and falling back, because that is where sellers keep showing up.

A price level where selling has repeatedly stopped an advance.

The ceiling finally gives. Everybody who was waiting above piles in at once.

Price moving decisively through a level it had been failing to cross.

The ceiling cracks, everybody rushes through, and then it slams shut behind them. Now they are all trapped on the wrong side.

A break of a level that immediately reverses back through it.

The average of the last N prices, redrawn every bar. It smooths out the noise so you can see the shape.

The average price over a set number of recent periods, plotted as a line.

The average price everybody paid today, weighted by how much they bought. Big institutions use it as their scorecard — above it they are winning, below it they are not.

Volume-weighted average price for the session.

Price falls below the day's average, then climbs back over it. The people who were losing are now winning, and they stop selling.

Price crossing back above VWAP after trading below it.

A map of where the crowd stood, not when. Fat parts of the map are where everybody did business. Thin parts are where price sprinted through.

A histogram of how much volume traded at each price level.

Your instruction to the broker. "Buy me ten." That is it.

An instruction to buy or sell.

Fill it up, I do not care what the sign says. You get in right now, at whatever the price is when you land.

An order to buy or sell immediately at the best available price.

I will pay $3.00 and not a penny more. You might not get filled. But you never get surprised.

An order to buy or sell only at a specified price or better.

The moment the order actually happens. Before that you are just asking.

The execution of your order at a specific price.

What you are currently holding. Long, short, or nothing — and nothing is a position too.

Your current holding in an instrument.

You own it and you want it to go up. Normal.

A position that profits when price rises.

You borrowed your neighbor's lawnmower, sold it for $200, and you are hoping to buy one back cheaper before he asks for it. If it gets more expensive instead, that is your problem.

A position that profits when price falls.

Holding nothing. Sitting on your hands. On a bad day it is the best trade available.

Having no open position.

The cornerman's towel. You decide before the fight how much punishment is too much, and you throw it in without arguing with yourself.

A resting order that closes your position at a set price to cap the loss.

Where you agreed to leave the party. Decided while you are calm, not while you are up money and feeling clever.

A resting order that closes your position at a set profit level.

Set the exit doors on both sides before you walk in. One door is the stop, the other is the target.

An entry with a stop loss and a take profit attached to it.

Never more than a night out. If losing it would ruin your week, it is too much.

The dollar amount you lose if the stop is hit — decided before you enter.

How big a bite you take. Not how confident you feel — how far away your stop is and how much you are willing to lose.

Choosing how many shares or contracts to trade so that a stop-out costs exactly your intended risk.

One R is one unit of what you were willing to lose. Made three times what you risked? That is 3R. It lets you compare a $50 trade to a $500 trade honestly.

Profit or loss measured in multiples of the amount risked.

Risking twenty bucks to make sixty is 1:3. You can be wrong more often than right and still come out ahead.

The ratio between what you stand to lose and what you stand to gain.

The first morning a buyer no longer gets the next payment — and the morning the price usually opens lower by about that much. Nobody sold.

The date from which a purchaser is not entitled to the declared dividend. Own the shares the day before to receive it.

The SEC’s public filing cabinet. Everything a US public company is required to file, free, with no broker in the way.

The Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval system — the public database of company filings.

The annual report, audited, including the risks the company’s own lawyers insist on listing. That last part is why it is worth reading.

The comprehensive annual report a US public company files with the SEC.

The quarterly version. Shorter, unaudited, and where a quarter’s actual figures have to be true rather than well framed.

The quarterly report filed with the SEC for each of the first three fiscal quarters.

The one that says something happened. Filed on an event rather than a date — a resignation, an acquisition, a loss.

A current report filed with the SEC to announce material events between scheduled filings.

The company’s own forecast, given alongside results. It often moves the price more than the results did.

A company’s published expectation for coming periods, issued with its earnings report.

A known event with an unknown outcome. Published in advance, so being surprised by the date is avoidable even though the result is not.

The scheduled date a company reports quarterly results.

How an officer tells you they bought their own company’s stock. Due within two business days, public on EDGAR.

The SEC filing required when an officer, director or 10% holder trades their own company’s securities.

What you are not allowed to trade on. The offence is about what you knew and the duty attached to it, not about where you work.

Information a reasonable investor would consider important that has not been made public. Trading on it in breach of a duty is securities fraud.

One firm’s stated opinion with a number on it. Not a floor, not a ceiling, and the stock has not read it.

The price level an analyst states they expect over a given horizon, published with a rating.

A published view — buy, hold, sell — from a firm that may also do business with the company. The disclosure is part of the document.

A research firm’s published recommendation on a security, usually issued with a price target.

Companies that share what moves them. Six names from one sector is one bet with six tickers on it.

A grouping of companies in the same line of business, which therefore tend to respond to the same drivers.

A short list you actually know beats a long one you scroll past. Removing names is most of the work.

A saved set of symbols followed deliberately rather than collected.

Profit on a sale, and the tax on it depends on how long you held. A year is the line the IRS draws.

The profit realised when an asset sells above its cost basis. US rules separate short-term (held a year or less) from long-term.

Selling at a loss and buying straight back does not bank the loss. The IRS defers it into the new position instead.

An IRS rule disallowing a loss deduction when a substantially identical security is acquired within 30 days before or after the sale.

What you paid, for tax purposes. A disallowed wash-sale loss gets added to it rather than disappearing.

The amount used to determine gain or loss on a sale, normally the purchase price adjusted for certain events.

A broad, sustained fall in economic activity — and a word that is only ever applied to the past, because the people who apply it wait for revised data.

In the US, a period dated by the National Bureau of Economic Research from income, employment, spending, production and sales together. The "two quarters of falling GDP" rule of thumb is not the NBER definition.

The committee that decides when a US recession started and ended. It announces late on purpose, because reversing a call is worse than making one slowly.

The National Bureau of Economic Research. Its Business Cycle Dating Committee sets the official start and end dates of US recessions, in hindsight.

Somebody selling because they must, not because they judged the price. Leverage, a lost income and no cash together remove the choice of when.

A holder compelled to sell by a margin call, an income interruption or an obligation, regardless of price.

What borrowing costs across different lengths of time. Normally longer money costs more; when it does not, something unusual is being priced.

The relationship between the yield on a government bond and its time to maturity. The 10-year minus 2-year spread is the commonly watched version.

The short end paying more than the long end. It has preceded recessions with long and variable lags — a real relationship and a useless clock.

When a shorter-maturity yield exceeds a longer one, so the 10Y–2Y spread falls below zero. Below zero is inversion by arithmetic, not by anyone’s judgement.

An unemployment-based signal with a number its author actually published, which is rarer than it sounds.

Claudia Sahm’s indicator: it signals the start of a recession when the three-month moving average of the unemployment rate rises 0.50 percentage points or more above its low of the previous twelve months.

Borrowers falling behind. It is one of the earliest places household stress shows up in published data.

The share of loan balances past due. The credit card delinquency rate at commercial banks is the series the dashboard carries.

The lender giving up on collecting. It comes after delinquency, so it says the earlier problem did not resolve.

The share of loan balances a lender writes off as uncollectable, reported as an annualised rate.

The broker closing your position on their formula rather than your judgement. It carries no view about what anything is worth.

The forced closing of a leveraged position when collateral no longer covers the requirement.

What one average trade is worth to you over a long run. This is the only number that decides whether you have a business or a habit.

Average profit per trade: (win rate × average win) − (loss rate × average loss).

How far you have fallen from your best day. Not from where you started — from your high-water mark.

The decline from a peak account value to a trough.

The amount that ends your day. Not a suggestion, not a feeling — a number you set this morning and obey this afternoon.

The maximum you allow yourself to lose in one day before you stop trading.

Driving a rented car worth ten times yours. Same road, same speed limit — but the consequences of a scratch are not the same.

Controlling a position larger than your account balance.

The deposit the rental place holds. It is not the price of the car — it is what they keep so you do not wreck it and walk away.

The money your broker requires you to post to hold a leveraged position.

The rental place calling to say the deposit no longer covers the damage. Add money now or they take the keys.

A demand to add funds or have positions closed for you.

How rough the water is. Rough water is not bad — it is just no place for a small boat with no plan.

How much and how fast price moves.

An agreement to buy something at a set price on a set date. Nobody in this course is taking delivery of anything — traders buy and sell the agreement itself, like flipping a concert ticket.

A standardized contract to buy or sell an asset at a set price on a future date.

One unit of the thing. Like one ticket. Buy two contracts, you have two tickets, and everything moves twice as fast.

One unit of a futures position.

The small-plate version. Same dish, a tenth of the portion. This is where you learn, not on the full size.

A smaller-sized futures contract, typically one-tenth the standard.

The smallest step price can take. Like a nickel — nothing costs $3.02 at this store, it goes $3.00, $3.05, $3.10.

The minimum price increment for an instrument.

What one step is worth in dollars, per contract. On a micro Nasdaq contract one tick is fifty cents. Twenty ticks against you on one contract is ten dollars.

The dollar value of one tick per contract.

A driving test for someone else's car. Pass their test, they hand you keys to a bigger vehicle than you could afford, and you split the fares.

A company that funds traders who pass an evaluation, in exchange for a share of profits.

The driving test itself. You pay a fee, you trade a simulated account under their rules, and you either follow the rules or you do not.

A rules-based trial account you must pass to get funded.

They handed you the keys. It is still their car. The rules did not go away — some of them got stricter.

A live account provided by a prop firm after you pass their evaluation.

The finish line of the driving test. Get here without breaking anything and you pass.

The amount of profit required to pass an evaluation.

A floor that follows you up the stairs and then never comes back down. Climb to the fifth step and the floor is now at the third. Fall back to the third and you are through it — even though you are still above where you started.

A minimum account balance that rises with your high-water mark and never falls.

The tide line on the piling. The highest your account has ever been. On a trailing account, this is the number that hurts you.

The peak balance an account has reached.

Your cut of the fares. It comes with its own rules about when and how much.

A withdrawal of your profit share from a funded account.

They do not want one lucky Tuesday. They want to see you can do it over and over, so no single day can be too big a share of your total.

A firm rule capping how much of your total profit can come from your best day.

A rule that says if your account is under $25,000, you only get three day trades in five business days. It is the single biggest reason small accounts go the prop route.

A US rule limiting margin accounts under $25,000 to three day trades in a rolling five-business-day period.

The shape of the trip so far — where it turned around, where it kept going. You read the shape before you read anything else.

The pattern of highs and lows that describes trend and range.

The trend was making higher highs, and then it did not. Something changed and the shape tells you before the news does.

Price failing to continue the prior sequence of highs and lows, signalling a possible trend change.

Somebody big needs a lot of shares. Everybody's stops are sitting just under the obvious low, so price dips down there, scoops them all up, and turns straight around. It was not a breakdown — it was a grocery run.

A quick move through an obvious level that triggers resting orders, then reverses.

Price sprinted through a stretch of road so fast it left a skid mark — a zone where almost nothing traded. Price often comes back to fill it in later.

A gap between candle wicks left by a fast one-directional move.

The first few minutes of the game. The high and low set in that window become the day's early goalposts.

The high and low established in the first minutes after the open.

The receipt roll. Every single trade, printing one after another, as fast as they happen.

The live feed of executed trades with price, size, and time.

A tiny pond. Throw one rock in and the whole thing sloshes. Few shares available means big moves on ordinary buying.

A stock with a small number of shares actually available to trade.

Everyone who borrowed the lawnmower needs to buy one back at once. That buying pushes the price up, which makes more of them panic, which pushes it up more.

A sharp rally driven by short sellers being forced to buy back.

The referee stops the game. Trading pauses, usually because it moved too far too fast. When it restarts, the price can be somewhere completely different.

A temporary trading pause imposed by the exchange.

Paying a small fee to lock in the right — not the obligation — to buy something at a set price for a set time. Like putting a deposit on a truck at today's price.

A contract giving the right to buy or sell at a set price before an expiry date.

The right to BUY at a set price. You want it for something you think goes up.

An option giving the right to buy at the strike price.

The right to SELL at a set price. Insurance on something you own, or a bet it goes down.

An option giving the right to sell at the strike price.

The price written on the deposit slip. The one you locked in.

The price at which an option can be exercised.

What the deposit cost you. If nothing happens, this is what you lose — all of it.

The price paid for an option.

The date the deposit slip stops being worth anything. Options have a clock; stocks do not.

The date an option contract ends.

The deposit slip losing value every day just from time passing, faster the closer you get to the deadline. You can be right about direction and still lose.

The rate an option loses value as expiry approaches.

How much drama the market is pricing in. High drama makes options expensive — and when the drama passes, they get cheap fast even if you were right.

The market's expectation of future price movement, priced into an option.

A bank account that can hold investments instead of just cash. You open it, move money in, and buy things with it.

An account with a broker that lets you buy and hold investments.

The everyday bucket. Money goes in after tax, it can come out any time, and you owe tax on what it earns along the way.

A standard investment account with no contribution limits and no early-withdrawal rules.

The bucket you pay tax on now so you do not pay later. There is a yearly cap on what you can put in, and it is meant to be left alone until retirement.

A retirement account funded with after-tax money, where qualified withdrawals in retirement are not taxed.

The bucket your job hands you. Money goes in before tax straight from your paycheck, and some employers add money on top.

An employer-sponsored retirement account funded from pre-tax pay, often with an employer match.

Your job putting money in beside yours, up to a limit. Not taking it is leaving part of your pay on the table.

Money an employer contributes to your retirement account based on what you contribute.

Buying a slice of the whole mall instead of betting on one store. Some stores close, some boom, and you own a piece of all of it.

A fund that holds everything in a market index rather than trying to pick winners.

A fund you buy and sell like a single share. Same idea as a fund, easier plumbing.

An exchange-traded fund — a basket of holdings that trades on an exchange like a stock.

A small slice the fund takes every year for running itself. It comes out whether you gain or lose, and it comes out every single year.

The annual percentage a fund charges on the money you have invested in it.

Your money earning, and then those earnings earning too. Slow and boring for years, then quietly enormous.

Growth on both your original money and the growth it has already produced.

Buying the same dollar amount every month, no matter the price. Some months it buys more, some less, and you never have to guess.

Investing a fixed amount on a fixed schedule regardless of price.

Being in the boat when the tide comes in. You cannot know which day it turns, so you stay in the boat.

The idea that staying invested over a long period matters more than picking entry points.

Not putting the whole grocery run in one bag. One bag splits, you still have dinner.

Spreading money across different holdings so no single one can sink you.

Nudging things back to the split you chose, after one part grew faster than the rest.

Adjusting holdings back toward your intended proportions.

A slice of the profits paid out to owners, usually a few times a year. Rent on something you own.

A cash payment a company or fund makes to its shareholders out of profits.

Taking the rent cheque and immediately buying more of the building. It is a setting you switch on once.

Automatically using dividend payments to buy more of the same holding.

Cash in a boring account for the car repair and the lost shift. It exists so a bad month never forces you to sell.

Accessible savings kept aside for unexpected expenses.

Compounding pointed the wrong way. A card charging you more than an investment is likely to make is a certain loss you can switch off.

Debt whose interest rate is high enough that paying it down beats most investing.

A stock moving because it is popular this week, not because anything changed at the company. The music stops without warning.

A stock whose price is driven mainly by online attention.

Written before the bell, when you are calm and nothing is on the line. The version of you at 9:47am does not get a vote.

A written statement of what you will trade, where you get in, where you get out, and how much you risk.

Game film. Every pro watches theirs. It is not homework — it is the only way to find out what you actually do, as opposed to what you think you do.

A record of every trade with the reasoning behind it and a review after.

Doubling your bet because you are mad, not because you found something. The market does not know you lost and does not owe you anything back.

Trading to recover a loss rather than because a setup appeared.

When you are not making decisions anymore, you are just reacting. Poker players named it. Everybody gets it. The skill is noticing it.

An emotional state where you stop following your process.

Chasing something already up 40% because you cannot stand watching it without you. Note that you are buying it from someone who is getting out.

Entering a trade because of the fear of missing the move, not because of a setup.

A specific arrangement of things you have decided to act on. Not "it looks good" — a checklist you either meet or you do not.

A defined, repeatable set of conditions that triggers a trade.

A flight simulator. Real controls, real instruments, no crash. Everything you learn transfers except how it feels to have money on it.

Trading with simulated money in live market conditions.

A jar you put money in before the taxman counts it. He counts it when you take it out, decades later.

A retirement account where contributions may be deducted from your taxable income now, and withdrawals in retirement are taxed instead.

The jar has a lid. You can only put so much in each year, and the lid closes whether you filled it or not.

The most you may put into a retirement account in a given year. It is set by the IRS and it changes.

You shop with the money in your pocket. When it is gone, you are done for the day.

A brokerage account that can only trade with money you have actually deposited and settled.

The store lends you a bigger cart. It is still their cart, and they can take it back whenever they decide to.

A brokerage account that lets you trade with borrowed money, which the broker can call back at any time.

The cheque cleared. Until it does, the money is on its way rather than there.

The delay between selling something and the cash being available to use again.

The rental place will not hand you the biggest truck on day one. You start with the small one.

A tier your broker assigns you that decides which options strategies you are allowed to place.

The account has your name on it and a grown-up holds the keys until you are old enough for them.

An investment account an adult opens and runs for a minor, which becomes the minor’s at a set age.

The two sets of rules those grown-up-holds-the-keys accounts run on. Same idea, different paperwork.

The US state laws custodial accounts are opened under. Which one applies depends on your state.

The doorman’s cut. Some doors charge it, some doors say they do not.

A fee a broker charges per trade. Many US stock brokers charge none and make money other ways.

The free ride to the flea market is free because somebody paid the driver to take you to their stall.

A broker being paid by a trading firm to route your orders to them. It is legal, disclosed, and one reason commission-free exists.

The cover charge. Some places have one, most of the big ones dropped it.

The smallest amount a broker requires to open or keep an account.

The person at the flea market spending their own money, not the shop buying in bulk.

An individual trading their own account, as opposed to a firm trading on behalf of others.

The bulk buyer. They cannot slip in and out unnoticed, because the truck is enormous.

A firm — a fund, a bank, a pension — trading other people’s money, usually in large size.

The stallholder who will both buy your watch and sell you one, and keeps the difference.

A firm quoting a bid and an ask at the same time, earning the spread between them.

Renting the flat above the shop so you hear the delivery truck before anyone on the street.

Renting rack space inside the exchange’s own data centre so your machine sits metres from the matching engine.

The lag between shouting and being heard.

The delay between sending an order and it reaching the exchange.

A machine that reads the room a million times while you blink once.

Automated trading that competes on speed, measured in microseconds, usually from co-located hardware.

How big your order is. Big enough and the water moves when you get in.

The quantity of a position. Large enough positions move the price simply by being filled.

The famous room with the shouting. Still there, no longer the mechanism.

The New York Stock Exchange, at 11 Wall Street. Its floor now handles a modest share of volume.

The exchange that never had a floor to begin with — electronic from day one.

A major U.S. stock exchange, fully electronic since it began.

The clerk who pairs every buyer with a seller — by best price first, then by who queued first.

The software inside an exchange that pairs incoming buy and sell orders by price and time priority.

A trader made of rules. It never gets bored and never breaks its own plan.

A program that places orders automatically by rule, without a person deciding each one.

A speedometer that only tells you how fast you have been going. It has nothing to say about the road ahead.

Relative Strength Index. Average gain divided by average loss over a lookback, 14 bars by default, scaled to 0 to 100. A description of recent price, not a forecast.

The car is still climbing but the engine note has changed. Something about the effort is different.

Price makes a new high or low and the indicator does not. An observation that the character of a move changed, not a signal that it is about to reverse.

A tape measure that widens when the room gets messier. It measures the mess. It does not tidy it or predict it.

A moving average with lines a set number of standard deviations above and below it, 20 periods and 2 deviations by default. A volatility measure, recomputed every bar.

How far, typically, things sit from average. A class where everyone scores near 70 has a small one. A class split between 20s and 100s has a big one.

A measure of how spread out a set of numbers is around their mean.

The room going quiet. You know something changed. You do not know who is about to speak.

Bollinger Bands narrowing because recent bars have been similar in size. Says volatility has been low, and nothing about direction.

Marking the halfway point of a journey you chose the start and end of. Move either end and every mark moves too.

Percentages of a move between two points you select, commonly 38.2, 50 and 61.8 percent. Useful as places other people watch, not as levels the market obeys.

The nail you hang the tape measure on. Everything measured after it depends on where you put it.

The swing high or low a drawing tool is measured from. Choosing it after the fact is what makes a retracement look more reliable than it is.

Three witnesses agreeing, who all heard it from the same person.

Several indicators pointing the same way. Worth less when they share their inputs, which most price-derived indicators do.