Knowledge Base › Glossary Glossary Key trading terms explained — from A to Z.
% %D line A moving average of %K, used as a signal line for crossovers. %K line The main stochastic line, showing where the close sits within the recent high-low range as a percentage. A A+ setup A trade that meets every criterion of a strategy at the highest quality level, as opposed to a marginal or forced setup. Abgeltungsteuer Germany's flat withholding tax on capital gains and investment income, generally around 25% plus solidarity surcharge and church tax if applicable. Actual The real reported figure for a data release, compared against the forecast. Address poisoning A scam where attackers send tiny transactions from a look-alike address, hoping the victim later copies the wrong address from transaction history. Algorithmic stablecoin A stablecoin that maintains its peg through code-driven supply expansion/contraction rather than holding collateral. Alpha The excess return a strategy generates above a risk-adjusted benchmark, attributable to skill or a genuine edge. Altcoin season A period where a majority of large-cap altcoins outperform Bitcoin over a rolling period, typically driven by risk-on sentiment. Altseason A period when altcoins broadly outperform Bitcoin, often following a period of Bitcoin strength and stabilization. AML (Anti-Money Laundering) Regulations designed to prevent illicit funds from being disguised as legitimate through the financial system. AMM Automated Market Maker — a DEX mechanism that prices assets algorithmically using liquidity pools instead of an order book. Anchoring Over-relying on the first piece of information encountered (e.g. entry price) when making later decisions. Asian range The high-low price range formed during the quieter Tokyo/Sydney trading session. Ask The price at which the market is willing to sell to you. Ask price The price at which the market will sell to you — the price you buy at. Assignment The obligation forced on an option seller when the buyer exercises the contract. ATR A moving average of the True Range, showing typical volatility over a chosen period. Attestation A limited-scope report by an accounting firm confirming reserves exist at a point in time, distinct from a full audit. Average True Range (ATR) A technical indicator measuring average price movement over a given period, often used to size stops. B Backtest Testing a trading strategy on historical data to see how it would have performed. Band walk When price repeatedly touches or rides along one band during a strong trend, rather than reverting to the middle. Bar replay Stepping through historical price bar by bar to simulate live decision-making. Base currency The first currency in a pair — the one you buy or sell. Basis The price difference between a futures contract and the underlying spot asset, usually expressed as a percentage or annualized yield. Best day percentage The maximum share of overall profit attributable to the single most profitable day. Beta A measure of an asset's volatility relative to a benchmark; most altcoins have a beta greater than 1 relative to Bitcoin. Beta (crypto) A measure of how much an asset moves relative to Bitcoin's move; altcoins typically have beta greater than 1. Bid The price at which the market is willing to buy from you. Bid price The price at which the market will buy from you — the price you sell at. Bid-Ask Spread The difference between the buy (ask) and sell (bid) price. Block subsidy The amount of new Bitcoin awarded to a miner for successfully mining a block, which halves approximately every four years. Blockchain A distributed digital ledger that records transactions across a network of computers. BoJ (Bank of Japan) Japan's central bank, historically maintaining ultra-low interest rates and occasionally intervening in the yen market. Bollinger Band A volatility band plotted at a standard deviation above and below a moving average. Breaker Block A former order block that price has broken through, which can flip polarity and act as support turned resistance or vice versa. Brent The international benchmark crude oil, sourced from North Sea fields, used to price roughly two-thirds of global oil. C Cable The market nickname for GBP/USD, dating back to the transatlantic cable used to transmit its price. Calibration The degree to which a trader's confidence in a prediction matches its actual historical accuracy. Call option A contract giving the buyer the right to buy an underlying at a set strike price before expiry. Candlestick A chart element showing open, high, low, and close price for a period. Carry trade Borrowing in a low-interest currency to invest in a higher-interest one, profiting from the rate gap. Cash index (CFD) A CFD tracking the spot value of an index, typically priced close to fair value without expiry. Cash-and-carry trade A market-neutral strategy that buys the spot asset and sells a futures contract against it to capture the basis as riskless-ish yield. Cash-secured put Selling a put while holding enough cash to buy the shares if assigned. CFD Contract for Difference — an agreement to exchange the price difference of an asset without owning it. Challenge model A staged evaluation (often 1-2 phases) requiring a profit target within rule limits before funding. Chasing Entering a trade after a large move has already occurred, out of fear of missing further gains. Circuit breaker A pre-set rule that forces a trader to stop after a defined loss threshold, removing the choice to keep going. Client money rules Rules requiring brokers to keep client deposits segregated from company operating funds. Cold wallet A wallet whose private keys are generated and stored on a device never connected to the internet. Collar Buying a protective put and selling a covered call to finance it, capping both downside and upside. Commission A separate fee charged per trade, often used alongside tighter raw spreads. Commodity currency A currency whose value is closely tied to the export prices of the commodities its economy produces. Compensation scheme A government or industry-backed fund that reimburses clients up to a limit if a regulated firm fails. Compounding Recalculating position size from current (not initial) account equity after every trade. Confidence interval A range within which the true value is likely to fall, given a chosen probability level. Confirmation bias The tendency to seek information that supports an existing belief while ignoring contradicting evidence. Confirmation line The support (or resistance) level between the two peaks (or troughs) whose break confirms the pattern. Confluence The alignment of multiple independent analysis tools pointing to the same conclusion, increasing confidence in a setup. Consistency rule A rule limiting how much of total profit can come from a single trading day. Consolidation A period of sideways price movement within a defined range. Contango A market condition where futures trade above spot price, typical when demand for leveraged long exposure is high. Continuation pattern A pause in a trend that typically resolves in the same direction as the prior move. Contract expiry The date a futures contract settles and trading in that specific contract ends. Core inflation Inflation excluding volatile items like food and energy. Corporate tax (UAE) A federal tax introduced in the UAE applying to business profits above a threshold, which can capture trading conducted through a company structure. Correlation The degree to which two pairs move together or in opposite directions. Cost basis The original value of an asset for tax purposes, used to calculate gain or loss on disposal. Covered call Selling a call against 100 shares you already own, collecting premium in exchange for capping upside. Credit spread A spread that collects net premium upfront, profiting if the underlying stays away from the short strike. Cross pair A pair with no USD — e.g. EUR/GBP, AUD/JPY. Currency basket A weighted group of currencies used as a benchmark to measure one currency's overall strength. Current account A record of a country's transactions with the rest of the world, including trade in goods and services. Custody risk The risk that a third party holding your assets fails, is hacked, or misappropriates funds. D Daily close The closing price of the daily candle, often used as a key confirmation signal in swing trading. Daily drawdown limit The maximum loss allowed within a single trading day before the account is breached. Daily loss limit A predetermined maximum loss for a single trading day, after which all trading stops. Data mining bias Finding apparently significant patterns by testing so many variations that some pass by chance. DAX (GER40) Index of the 40 largest companies listed on the Frankfurt Stock Exchange. Dealing Range The price range between a significant swing high and swing low, used as the basis for premium and discount measurement. Debit spread A spread that costs net premium upfront, profiting if the underlying moves toward the long strike. Delta The rate of change of an option's price relative to a $1 move in the underlying. Delta-neutral A portfolio position where the net delta is zero, meaning no directional exposure to small price moves. Demand zone A price area where aggressive buying previously caused a strong rally, left behind as unfilled buy orders. Demo account A simulated trading account using real market prices but virtual money. Depeg When a stablecoin's market price deviates meaningfully from its intended 1:1 peg to the reference asset (usually USD). Depotbank The custodian bank holding a securities account, typically responsible for automatic KESt withholding on domestic accounts. Depth of market A view showing pending buy and sell orders at various price levels around the current market price. Divergence When price makes a new extreme but RSI doesn't — a warning the trend is weakening. Dividend adjustment A cash credit or debit applied to a CFD position to replicate the effect of a dividend payment. Dot plot A Fed chart showing individual policymakers' rate projections. Drawdown The decline from a peak in account equity to a subsequent trough, usually shown as a percentage. Drift A measurable divergence between a strategy's live performance and its backtested expectations. DXY (Dollar Index) An index tracking the US dollar against a basket of major currencies, heavily weighted toward the euro. E ECN A network that matches orders directly between participants without a dealing desk. Economic calendar A schedule of upcoming data releases and events that can move markets, such as interest rate decisions or employment reports. Edge A statistical advantage that produces profit over a large sample of trades. Edge decay The gradual erosion of a strategy's theoretical profitability once real-world costs and frictions are included. Emotional capital The psychological reserve a trader has to make rational decisions under stress. Emotional tagging Labeling each trade with the dominant emotional state present during entry and management, e.g. 'calm', 'anxious', 'greedy'. Engulfing A two-candle pattern where the second candle completely covers the first — a strong reversal signal. Entity switching When a broker routes clients from different regions to different legal entities with varying levels of protection. Entry Model A fixed, repeatable sequence of criteria a trader requires before entering a trade. Equilibrium The midpoint (50%) of a dealing range, dividing it into a premium half and a discount half. ESMA The European Securities and Markets Authority, which set EU-wide retail CFD/forex rules in 2018. Evaluation account A simulated or funded account used to test whether a trader qualifies for firm capital. Exchange netflow The net amount of a coin moving onto or off exchange wallets, used as a proxy for selling or accumulation intent. Exit tax / departure tax A tax some countries impose when a resident relinquishes tax residency, sometimes applying to unrealized gains. Exotic pair A pair combining a major currency with the currency of a developing or smaller economy. Expectancy The average R a system produces per trade over a large sample. Expert Advisor (EA) An automated trading program that runs on MetaTrader platforms to execute strategies without manual input. Export exposure The degree to which an index's constituents earn revenue abroad, making them sensitive to currency swings. Extension A Fibonacci level projected beyond 100% of the original move, used to set profit targets. F Fair Value Gap (FVG) A price imbalance where a 3-candle sequence leaves a gap between candle 1's wick and candle 3's wick. False breakout A breakout that fails and reverses back inside the range, trapping breakout traders. Feature A numeric variable derived from raw data that a model or rule uses to make decisions. Feature leakage Accidentally including information in a feature that would not have been known at prediction time. Fixed lot sizing Trading the same lot size regardless of how the account balance has grown or shrunk. Flagpole The sharp initial move that precedes a flag or pennant pattern. Floating equity Account balance adjusted for the unrealized profit/loss of open positions. FOMO Fear of missing out — the urge to enter a trade because price is moving without you. Forward guidance Communication from a central bank about the likely future direction of policy. Forward test Running a strategy live (often on a demo account) going forward in real time, rather than on historical data. Four-year cycle The observed historical pattern of Bitcoin bull and bear markets loosely aligning with the halving schedule. Fractional Kelly Betting a fraction (e.g. 25-50%) of full Kelly size to reduce volatility and drawdown at a small cost to growth rate. Fragmentation The spread of trading volume across many separate venues rather than one central exchange. Fresh zone A supply or demand zone that has not yet been retested — considered to have the highest probability of reacting. Fundamental analysis Evaluating a currency based on economic data, interest rates, and macroeconomic conditions. Funded account An account a trader operates after passing evaluation, trading capital allocated by the firm. Futures contract A standardized agreement to buy or sell an asset at a set price on a specific future date. G Gamma The rate of change of delta itself as the underlying moves. Gamma scalping Profiting from repeated delta-hedge rebalancing when an option position has positive gamma. Gewerbsmäßiger Wertschriftenhandel Professional securities trading classification, which converts otherwise tax-free gains into taxable income and adds social security contributions. Going long Buying an asset expecting its price to rise. Going short Selling an asset you don't own, expecting its price to fall. Gold-silver ratio The number of ounces of silver needed to buy one ounce of gold; used to gauge relative value. Golden Cross When the 50-period MA crosses above the 200-period MA — a bullish long-term signal. Golden ratio (61.8%) The most closely watched Fibonacci retracement level, derived from dividing consecutive numbers in the Fibonacci sequence. H Half-life The expected time for a mean-reverting series to close half the distance back to its average. Halving A scheduled event that cuts the rate of new coin issuance in half, notably for Bitcoin roughly every four years. Hedging mode An account setting that allows holding simultaneous long and short positions in the same instrument. Hidden divergence The oscillator makes a new high or low while price does not, suggesting the existing trend may continue. High-impact news Scheduled economic releases (NFP, CPI, central bank decisions) capable of moving price sharply within seconds. High-water mark The highest balance or equity value an account has ever reached, used as the reference point for trailing drawdown. Higher low In an uptrend, a low that sits above the previous low, confirming trend structure. Histogram The visual bar chart showing the distance between the MACD line and signal line. Hurst exponent A statistic between 0 and 1 that measures whether a series is trending (>0.5), mean-reverting (<0.5), or random (≈0.5). I Idempotency A property where repeating the same operation multiple times has the same effect as doing it once. Imbalance A situation where buying or selling pressure clearly outweighs the other side. Impact rating A calendar label indicating how much volatility a release is likely to cause. Implementation shortfall The total cost of executing a trade versus the price at the moment the decision to trade was made. Implied volatility (IV) The market's forward-looking estimate of an underlying's volatility, derived from option prices. Index A basket of stocks combined into a single number representing overall market performance. Index price A composite spot price aggregated from several major exchanges, used as the anchor for the mark price. Inducement (IDM) A minor swing point designed to attract stop-loss and breakout orders before the real institutional move begins. Instant execution An execution model that attempts to fill at the exact requested price or reject/requote the order. Instant funding An account model offering immediate live-style trading access without a graded phase, typically with tighter risk limits and higher fees. Instrument fit How well a market's volatility, hours, and behavior align with a trader's schedule, risk tolerance, and strategy. Insurance fund A pool of exchange funds used to cover losses when a liquidated position closes at a worse price than its bankruptcy price. Internal Structure Smaller, lower-timeframe swings that occur inside a larger external structural leg. Internalization The practice of matching opposing client orders internally rather than sending them to external markets. Intervention Direct buying or selling of a currency by a central bank to influence its value. IV crush A sharp drop in implied volatility, and therefore option premium, right after an anticipated event like earnings. K Kelly Criterion A formula that calculates the theoretically optimal bet size to maximize long-run geometric growth. KESt (Kapitalertragsteuer) Austria's withholding tax on capital gains and investment income, generally around 27.5% for most instruments as of writing. Kill switch A mechanism that immediately halts all trading and flattens positions when a critical threshold is breached. Killzone A term traders use for a specific high-probability time window within a session, often around the London or New York open. L Latency The time delay between sending an order and it being received and processed by the broker's server. Leading indicator A data series that tends to change before the broader economy shifts direction. Leverage The ratio of your position size to your capital — e.g. 1:100 means $1 controls $100. License tier The relative strictness of a regulatory regime, ranging from top-tier (strict) to offshore (light-touch). Limit Order An order to buy/sell at a specific price or better. Liquidation cascade A chain reaction where forced selling from one liquidation pushes price down enough to trigger further liquidations. Liquidity The availability of buyers and sellers willing to trade at a given price. Liquidity grab / sweep When price spikes past a high/low to trigger stops, then reverses — institutions filling orders. Liquidity sweep A brief spike beyond a range that triggers stop orders before reversing. Liquidity Trap A price move that lures traders into a position just before reversing sharply against them. Lock-in The point at which a trailing drawdown stops rising further, typically once the account reaches its initial balance again. London high/low The extreme prices set during the London morning session, often used as a reference for NY continuation or reversal. London-NY overlap The 12:00-16:00 UTC window when both major sessions are open, producing the day's highest liquidity. Long position A position that profits when the price of an asset rises. Long straddle Buying a call and put at the same strike and expiry, profiting from a large move in either direction. Long volatility A position that profits when the underlying's realized volatility exceeds what was priced in. Lookahead bias Using information in a backtest that would not have been available at the time of the trade. Loss aversion The psychological tendency to feel losses more intensely than equivalent gains. Lot Standardized trade size: 1 standard lot = 100,000 units of the base currency. Lot size The trade volume unit — standard (100,000), mini (10,000), micro (1,000) units of base currency. M M-pattern / W-pattern Colloquial names for double top (M-shape) and double bottom (W-shape) based on their visual outline. MACD An indicator showing the difference between two EMAs, revealing momentum and trend strength. Maintenance margin The minimum equity required to keep a leveraged position open; falling below it triggers liquidation. Major pair Any pair that includes USD — the most liquid and traded pairs. Margin The collateral your broker holds to keep a leveraged position open. Margin call A broker warning that equity has fallen close to the margin requirement, prompting deposit or position closure. Mark price A smoothed reference price used for margin calculations and liquidations, designed to resist manipulation of the last-traded price. Mark-to-market Daily settlement of gains and losses on a futures position against the account balance. Market cap (crypto) The total value of a cryptocurrency, calculated as price multiplied by circulating supply. Market depth The volume of orders resting at each price level, visible in an order book. Market execution An execution model where the order fills at the best available price without a price guarantee. Market impact The adverse price movement caused by the act of executing an order, especially large ones relative to available liquidity. Market maker A broker that creates its own internal market and may take the opposite side of client trades. Market Order An order to buy/sell immediately at the best available price. Market structure The sequence of swing highs and lows that defines whether a market is trending or ranging. Market-cap weighting A method where larger companies influence the index price more than smaller ones. Max drawdown The largest peak-to-trough decline in account equity during a period. Max drawdown (MDD) The largest peak-to-trough decline observed in a track record or backtest. Mean reversion The tendency of price to return to its average value after an extreme deviation. Measured move A price target projected by taking the pattern's height and applying it from the breakout point. MEV Maximal Extractable Value — profit miners/validators or bots extract by reordering, inserting, or censoring transactions in a block. Micro lot The smallest standard trade size in forex, 1,000 units of the base currency — used to trade live with minimal capital at risk. Milestone period The evaluation window (e.g. a calendar quarter) over which profitability is measured for a scaling decision. Minimum trading days The smallest number of distinct trading days a trader must be active during before an evaluation can be passed. Mitigation When price returns to an order block to close or fill remaining institutional orders. Mitigation Block The last order block before a structural shift that failed to hold, formed when price returns partially before reversing. Momentum The speed or strength of a price move, often measured by oscillators like RSI or MACD. Monetary policy The set of tools a central bank uses to influence money supply, credit, and interest rates. Moneyness Whether an option's strike is in-, at-, or out-of-the-money relative to the underlying price. MVRV ratio Market Value to Realized Value — compares current market cap to the aggregate cost basis of all coins, indicating over/undervaluation. N NAS100 CFD ticker tracking the Nasdaq 100, 100 of the largest non-financial Nasdaq-listed companies, tech-heavy. Neckline The support or resistance line connecting the two troughs (or peaks) between the shoulders and the head. Net expectancy The expected profit per trade after all trading costs are subtracted from gross expectancy. Noise Small, insignificant price fluctuations that don't reflect a real trend. Non-Farm Payrolls (NFP) A monthly US report on the net change in jobs excluding farm workers, government, and a few other categories. Non-stationarity A statistical property where the underlying data-generating process changes over time, breaking assumptions learned from past data. Null hypothesis The default assumption that a strategy's returns are indistinguishable from random noise. O Offshore jurisdiction A country with minimal licensing requirements and limited enforcement capacity, often used to register loosely regulated brokers. OPEC+ An alliance of oil-producing nations, led by OPEC and Russia, that coordinates production levels to influence price. Open interest The total number of outstanding perpetual futures contracts that have not been closed or settled. Order Block (OB) The last opposite-colored candle before a strong impulsive move — marks where institutional orders originated. Order book A list of pending buy and sell orders at different price levels. Order book depth The total volume of resting buy and sell orders near the current price on an exchange. Order routing The path an order takes from the trader's platform to the venue or liquidity provider where it is actually filled. Out-of-sample Data that was not used to build or tune the strategy, reserved purely for validation. Overbought/oversold A condition where an oscillator suggests price has moved too far in one direction. Overconfidence bias The tendency to overestimate one's own accuracy, skill, or control over outcomes that are partly or fully random. Overfitting Tuning a strategy's parameters so closely to historical data that it captures noise instead of a real pattern. Overtrading Placing too many trades, often out of boredom or impatience, beyond what a strategy actually calls for. P p-value The probability of observing results at least as extreme as yours if the null hypothesis were true. Parameter A configurable input in a strategy, like moving average length or stop-loss distance. Payout cycle The recurring interval (e.g. biweekly, monthly, or on-demand) at which a trader can request withdrawal of profits. Ping A measurement of round-trip network delay between two points, commonly used as a rough proxy for latency. Pip The smallest standard price increment — usually 0.0001 for forex, 0.01 for JPY pairs. Pip value The monetary value of a one-pip move for a given position size. Pivot point (PP) The central reference level calculated from the previous period's high, low, and close. Portfolio heat The total risk currently open across all positions, adjusted for correlation between them. Portfolio hedge A position taken specifically to offset losses elsewhere in a portfolio during adverse market moves. Position sizing The process of determining how much capital to risk on each trade. Post-trade review Analyzing a completed trade against the original plan to identify what worked and what didn't. Potential Reversal Zone (PRZ) The price area around point D where multiple Fibonacci ratios converge, suggesting a high-probability reversal area. Pre-market analysis Reviewing charts, news, and key levels before the trading session begins to form a plan. Pre-market routine A fixed sequence of preparation steps completed before a trading session begins. Premium The price paid by the option buyer to the seller for the contract. Price discovery venue The exchange or market where new information is first reflected in price, typically the venue with the deepest liquidity. Priced in When market expectations already reflect an anticipated outcome before it's announced. Private capital gain A gain from selling privately held assets, which is generally tax-exempt for individuals in Switzerland under certain conditions. Probability of ruin The statistical likelihood that a trading strategy, given its edge and risk per trade, will deplete the account entirely. Professional client A classification that removes retail leverage caps and some protections, available to traders meeting experience/size criteria. Profit factor Gross profit divided by gross loss — a measure of how much you make per unit you lose. Profit split The percentage of profit generated on a funded account that is paid to the trader. Profit target The minimum profit percentage required to pass an evaluation phase. Proprietary trading Trading a firm's own capital for direct profit, rather than on behalf of clients. Protective put Buying a put against a held position to cap downside risk, like an insurance policy. Pullback A temporary move against the prevailing trend before it resumes. Put option A contract giving the buyer the right to sell an underlying at a set strike price before expiry. Q Quantitative trading Trading decisions derived entirely from mathematical models and data analysis rather than subjective judgment. Quote currency The second currency in a pair — the price is expressed in this. R R-multiple A trade's profit or loss expressed as a multiple of the initial risk (1R = the amount risked). R1-R3 Resistance levels derived above the pivot point, in increasing order of distance. Range A market condition where price oscillates between defined support and resistance levels. Range boundary The support or resistance line that defines the top or bottom of a range. Rate differential The difference between two countries' interest rates — drives carry trade demand. Rate limit A cap on how many API requests a client can make in a given time window before being throttled or blocked. Real yield A bond yield adjusted for inflation; the strongest inverse driver of gold prices. Realized gain/loss Profit or loss that becomes final when a position is closed, as opposed to unrealized (open) gains. Rebalancing Adjusting a hedge periodically to keep delta near zero as the underlying and time change. Recency bias The tendency to overweight recent events and assume they represent the norm. Regular divergence Price makes a new high or low while the oscillator does not, suggesting a possible trend reversal. Regulator A government or industry body overseeing financial firms to protect clients and enforce standards. Relative strength How a currency is performing compared to a basket of other currencies, rather than just one pair. Requote A broker's offer of a new price when the originally requested price is no longer available. Resistance A price level where selling pressure is strong enough to stop a rally. REST API A request-response web API used for one-off actions like placing an order or fetching historical bars. Retest Price returning to the broken level to confirm it now acts as support/resistance. Revenge trade A trade taken specifically to recover a recent loss, usually outside the trader's normal rules. Revenge trading Entering a trade impulsively to immediately recover a previous loss. Risk of ruin The mathematical probability that a trading account will be reduced to a defined ruin level given the edge and bet size. Risk parity A portfolio construction method allocating capital so each position contributes equal risk, not equal dollar exposure. Risk per trade The percentage of account equity you're willing to lose if a trade hits its stop loss. Risk-off A market environment where investors sell riskier assets and move toward perceived safe havens. Risk-on A market environment where investors favor higher-risk, higher-return assets. Risk-reward ratio The ratio between the amount risked on a trade and the potential profit target. Robustness A strategy's ability to keep performing reasonably well across different data and conditions. Role reversal When broken support becomes resistance, or broken resistance becomes support. Rollover The process of extending an open position to the next settlement date, triggering a swap charge. Round-trip cost The total cost of entering and exiting a single position, including spread, commission, and slippage. Rule literacy A trader's actual understanding of a firm's specific rule mechanics, as opposed to a general assumption based on other firms. S S1-S3 Support levels derived below the pivot point, in increasing order of distance. Safe haven An asset that investors flock to during uncertainty or crisis, such as gold, USD, or JPY. Safe-haven currency A currency that tends to appreciate during periods of market stress, such as USD, JPY, or CHF. Scaling out Closing a position in portions at different price levels instead of all at once. Scaling plan A structured program where a funded account's size increases after the trader meets defined profitability milestones. Scalping A trading style seeking small, quick profits from many trades within very short holding periods. Seed phrase A sequence of 12-24 words that mathematically generates a wallet's private keys and can fully restore access to its funds. Segregated account A bank account where client funds are held separately from the broker's own operating capital. Segregated accounts Client funds held in accounts separate from the broker's own operating capital. Session overlap The window when two trading sessions are open at the same time, usually bringing higher volume and volatility. Setup tag A label identifying which specific strategy or pattern a trade belongs to, used to filter and compare performance. Sharpe ratio A measure of risk-adjusted return: average return divided by the standard deviation of returns. Short position A position that profits when the price of an asset falls. Signal-to-noise ratio The proportion of predictable structure relative to random variation in a dataset; famously very low in financial returns. Slippage The difference between the expected price of a trade and the price it's actually executed at. SOPR Spent Output Profit Ratio — measures whether coins moving on-chain are being sold at a profit or a loss on average. Source of funds Documentation proving where deposited money originated, e.g. salary slips or a sale contract. Sparer-Pauschbetrag An annual tax-free allowance on capital income available to individual taxpayers. Spot market A market where assets are bought or sold for immediate delivery at the current market price. Spread The gap between the bid and ask price, representing a trading cost. Spread cost The bid-ask difference paid on every trade — a major drag on scalping profitability. Spread widening The temporary increase in bid-ask spread that brokers apply during high-volatility news moments. Spring A brief false breakdown below a trading range's support, designed to trigger stop-losses before price reverses upward. SPX500 CFD ticker tracking the S&P 500, 500 large US companies across all sectors, market-cap weighted. Squeeze A period where the bands narrow sharply, indicating low volatility that often precedes a large move. Standard deviation A statistical measure of how dispersed price is around its average, used to set the width of the bands. Standard error A measure of how much a sample statistic (like win rate) is likely to vary from the true population value. State machine A model where a system is always in exactly one of a defined set of states, with explicit rules for transitioning between them. Static drawdown A maximum loss limit fixed relative to the initial account balance and never adjusted upward. Stock-to-flow A ratio measuring existing supply against new annual production, used (controversially) as a scarcity-based valuation model. Stop hunt Price briefly spiking to trigger clustered stop orders before reversing. Stop-out level The margin level at which a broker automatically force-closes positions to prevent a negative balance. Straddle Placing both a buy-stop and sell-stop around current price ahead of news so whichever direction breaks out triggers an entry. Straddle strategy Placing pending orders on both sides of price ahead of a news event to capture the breakout in either direction. Strangle Buying (or selling) an OTM call and an OTM put with the same expiry but different strikes. Structural stop A stop placed beyond a chart structure point (swing high/low) rather than an arbitrary distance. Supply zone A price area where aggressive selling previously caused a strong decline, left behind as unfilled sell orders. Support A price level where buying interest is strong enough to stop a decline. Survivorship bias Testing only on assets/brokers that still exist today, ignoring those that failed or were delisted. Swap The interest rate differential charged or credited for holding a leveraged position overnight. Swap / rollover The interest charged or credited for holding a position overnight, based on the interest rate differential between the two currencies. Swing high A local peak with lower highs on both sides. Swing High/Low A local turning point in price, formed by a candle with lower highs on both sides (swing high) or higher lows on both sides (swing low). Swing low A local trough with higher lows on both sides. Swing trading A style holding positions for several days to weeks to capture a broader price swing. Symmetrical triangle A triangle formed by a descending upper trendline and an ascending lower trendline converging toward each other. Systematic strategy A fully rule-based strategy that generates identical signals given identical inputs, with no discretionary override. T t-statistic A measure of how many standard errors a strategy's mean return is away from zero. Tail correlation The tendency of assets to become far more correlated during extreme market stress than during normal periods. Tax residency The country where an individual is legally considered resident for tax purposes, generally based on days present and center-of-life factors. Technical analysis Evaluating a currency based on historical price and volume patterns on a chart. Terms of trade The ratio of export prices to import prices for a country, reflecting its purchasing power on world markets. The wheel A cyclical strategy alternating cash-secured puts and covered calls on the same underlying. Theta The daily decay in an option's price purely from time passing. Tick volume A proxy for volume in decentralized markets like forex, counting the number of price changes rather than actual traded units. Tilt A state of emotional distress that leads to impulsive, undisciplined decisions — a term borrowed from poker. Timeframe The period each candle or bar on a chart represents. Timeframe conflict When different timeframes suggest opposite directions, creating uncertainty about the correct trade bias. Timeframe hierarchy A set of three related timeframes used for bias, structure, and entry, such as D1, H4, and M15. Top-down analysis Starting analysis on a higher timeframe and progressively narrowing down to lower timeframes for entry. Trade journal A structured log of every trade, including entry/exit details, used for both performance review and tax documentation. Trading journal A structured record of every trade, including the reasoning, market context, and psychological state at the time. Trading plan A written document defining entry, exit, risk, and position sizing rules in advance of trading. Trailing drawdown A maximum loss limit that rises alongside the account's highest achieved balance or equity. Trailing stop A stop loss that moves in the trade's favor as price advances, locking in gains. Triple swap day The day on which swap is charged at three times the normal rate to account for the weekend. True Range The largest of three values: current high minus low, high minus previous close, or low minus previous close. TWAP Time-Weighted Average Price — an execution algorithm that splits an order evenly across a fixed time window. U Unemployment rate The percentage of the labour force that is jobless and actively seeking work. Unlimited risk The theoretical exposure of a short position, since an asset's price has no upper limit. Upthrust A brief false breakout above a trading range's resistance, designed to trap buyers before price reverses downward. US30 CFD ticker tracking the Dow Jones Industrial Average, 30 large price-weighted US companies. V Variance The natural swings between winning and losing streaks even with a valid edge. Vega The sensitivity of an option's price to a 1-percentage-point change in implied volatility. Verlustverrechnungstopf A running loss-offset account maintained by a German broker/bank that automatically nets gains and losses within the tax year. Vertical spread Buying and selling two options of the same type and expiry but different strikes. Volatility profile The typical size and pattern of price movement in a given market over a given period. Volatility regime The prevailing level of price fluctuation in a market — low, normal, or high — which changes over time. Volatility skew The pattern where IV differs across strikes at the same expiry, typically higher for OTM puts. Volatility-based stop A stop-loss distance calculated as a multiple of ATR rather than a fixed pip amount. Volume The number of units (shares, contracts, or ticks) traded during a given period. Volume climax A spike of unusually high volume, often marking exhaustion at the end of a strong move. VPS (Virtual Private Server) A remote computer, often located near a broker's data center, that runs a trading platform continuously without depending on a trader's home connection. VWAP Volume-Weighted Average Price — an execution benchmark and algorithm that trades proportionally to expected market volume. W Walk-forward analysis Repeatedly optimizing on one data window and testing on the following unseen window, rolling forward through history. Walk-forward validation A validation method that repeatedly retrains a model on a rolling historical window and tests it on the immediately following period. Watchlist A shortlist of instruments a trader monitors closely for potential setups on a given day. WebSocket A persistent, bidirectional connection used to stream live market data or order updates with low latency. WTI West Texas Intermediate, the US benchmark crude oil, priced and delivered at Cushing, Oklahoma. X XABCD Pattern A five-point price structure used in harmonic trading, labeled X, A, B, C, and D, defined by specific Fibonacci ratios between legs. XAG/USD The ticker for spot silver priced in US dollars per troy ounce. XAU/USD The ticker for spot gold priced in US dollars, quoted per troy ounce. Y Yield The return an investor earns from holding a bond, expressed as a percentage. Yield differential The gap between comparable bond yields of two countries, a key driver of currency flows. Z Z-score normalization Rescaling a value by subtracting the mean and dividing by the standard deviation, making it comparable across regimes.