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A

Ask: The lowest price any seller will currently accept. You buy at the ask (or higher). The gap between the ask and the bid is the spread — your instant cost of entry.
Averaging down: CAUTIONBuying more of a losing position to lower your average price. In long-term investing it can be a strategy; in day trading it usually means refusing to take a stop. A day trader who averages down has replaced a plan with a hope.

B

Bar replay: A charting feature (TradingView and others) that rewinds a chart to a past date and steps forward candle by candle without showing you the future. The fastest, cheapest way to practice: you can compress months of screen time into a weekend and log every trade.
Bid: The highest price any buyer will currently pay. You sell at the bid (or lower). See also ask and spread.
Body: The thick part of a candlestick, spanning from the open to the close. The body is the price range the market accepted during that period — wicks are what it rejected. Green (or hollow) means the close was above the open; red means below.
Breakout: A move through a level that price previously respected — above resistance or below support. Real breakouts come with volume; low-volume breakouts frequently fail and trap the traders who chased them.

C

Candlestick (candle): A chart element summarizing four numbers for a fixed time window: open, high, low, close (OHLC). A 5-minute candle is five minutes of trading compressed into one shape. Reading them is the core skill the tutorial teaches.
Cash account: A brokerage account with no borrowed money. Not subject to the PDT rule, but you trade only settled cash — proceeds from a sale take a day to settle before you can reuse them. The slower, safer way to start.
Close: The last price of a candle’s time window. The close’s position within the candle’s range is one of the most information-dense details on a chart: a close near the high means buyers finished in control.

D

Daily max loss: A hard, pre-committed limit on how much you can lose in one day — commonly 2 to 3R — after which you stop trading, no exceptions. Exists because the worst losses rarely come from one bad trade; they come from the six revenge trades after it.
Day trade: Opening and closing the same position within a single trading day. In the US, a margin account that makes four or more day trades in five business days is flagged as a pattern day trader — see PDT rule.
Doji: A candle whose open and close are nearly equal, leaving almost no body. It records indecision — neither side won. Meaningful mainly at levels where a trend might be exhausting; meaningless in the middle of nowhere.
Drawdown: The decline from an account’s peak to its lowest subsequent point. Every strategy has drawdowns; the question is whether yours are survivable. Your max consecutive losses in testing tells you the drawdown you must be able to sit through without abandoning the plan.

E

Edge: A repeatable reason your trades make money on average — positive expectancy, proven by your own logged data. Not a feeling, not a guru’s claim. The founding assumption of this site: you have no edge until your log proves otherwise.
Engulfing (bullish / bearish): A two-candle pattern where the second candle’s body completely swallows the first’s. It records a momentum shift: one side was winning, then the other side took over decisively within a single period.
Entry: The price at which you open a position. Entries get all the attention but matter less than beginners think — sizing, stops, and exits decide whether an account survives. See position sizing.
Evening star: A three-candle reversal pattern after a rally: strong up candle, small indecisive candle, strong down candle. The mirror image is the morning star.
Expectancy: The average result of one trade in your system, in R: (win% × average win) − (loss% × average loss). If it’s not positive over a meaningful sample, the strategy loses money no matter how good it feels. The single number that separates trading from gambling.

F

Fill: The actual execution of your order — the price you really got, as opposed to the price you wanted. The difference is slippage, and it is consistently worse in live trading than in any backtest.

G

Gap: A jump between one candle’s close and the next one’s open, usually across sessions (overnight news, earnings). Prior-day levels and premarket highs and lows around gaps are common intraday battlegrounds.

H

Hammer: A candle with a small body near the top and a long lower wick, appearing after a decline. It records rejection of lower prices: sellers pushed down, buyers absorbed it and lifted the close. Only meaningful at a level — at support, a prior low — and ideally on above-average volume.
High: The highest price traded during a candle’s window — the tip of the upper wick. Price went there, and (if there’s a wick) got pushed back.

I

Inside bar: A candle whose entire range fits within the previous candle’s range. It records compression — volatility contracting — which often precedes an expansion. Traders watch the break of the outer candle’s range.

L

Leverage: CAUTIONTrading with borrowed money (margin), which multiplies both gains and losses. The number one account killer for beginners — not because the math is hard, but because it turns survivable mistakes into fatal ones.
Limit order: An order that executes only at your specified price or better. You control the price; you don’t control whether it fills. The professional default for entries in most situations.
Liquidity: How easily you can get in and out near the current price. High-volume stocks are liquid; thin stocks fake you out, fill you badly, and trap you at the worst moments. Beginners should stick to liquid names.
Long: A position that profits when price rises — buy first, sell later. The opposite of short.
Low: The lowest price traded during a candle’s window — the tip of the lower wick.

M

Margin account: A brokerage account that can borrow against your deposits. Enables short selling and instant settlement, but brings leverage risk and the PDT rule if under $25,000.
Market order: An order that executes immediately at whatever price the market offers. You control the timing; you don’t control the price. In fast markets or thin stocks, that uncertainty gets expensive.
Marubozu: A candle with no (or almost no) wicks — the body spans the entire range. One side dominated the whole period without a fight. A record of conviction.
Morning star: A three-candle reversal pattern after a decline: strong down candle, small indecisive candle, strong up candle. The mirror image is the evening star.

O

OHLC: Open, High, Low, Close — the four numbers every candle encodes. Everything in candlestick reading is a visual interpretation of these four values.
Open: The first price of a candle’s time window.

P

Paper trading: Trading with simulated money in real time. Stage two of the testing method (after bar replay, before real shares). It exposes hesitation and chasing, but can’t simulate what real money does to your decision-making — that’s what the one-share stage is for.
PDT rule (pattern day trader): US rule: a margin account under $25,000 gets three day trades per rolling five business days; a fourth flags the account and restricts it. Cash accounts are exempt but must wait for settlement. Plan your practice around it rather than fighting it.
Position sizing: Deciding how many shares to trade so a stopped-out loss costs a fixed fraction of your account: shares = (account × risk%) ÷ (entry − stop). With risk fixed at 0.5–1%, stop distance stops mattering to your wallet — wide stop, fewer shares; tight stop, more shares. The most important formula on this site.
Premarket: Trading before the regular 9:30 AM ET open — thinner, wider spreads, and moves that regularly reverse at the open. Its high and low become key intraday levels.

R

R (R-multiple): Your risk unit: the dollars you’d lose if your stop is hit. A trade that risks $100 and makes $200 is +2R; a full stop-out is −1R. Tracking results in R instead of dollars makes every trade comparable regardless of size — and makes your statistics honest.
Resistance: A price level where selling has previously overwhelmed buying — prior highs, the premarket high, round numbers. Patterns that form at resistance mean something; the same patterns in the middle of a range mostly don’t.
Revenge trading: CAUTIONTrading to win back a loss — bigger size, looser rules, right now. Destroys more accounts than bad analysis does. The defense is mechanical, not emotional: a daily max loss, decided in advance, honored without debate.
Reward-to-risk (2R target): The ratio of what you stand to make versus what you risk. At 2:1, you can be wrong 60% of the time and still profit; at 1:1 you need to be right more often than most strategies allow. This site’s tutorial uses 2R as the minimum worth taking.

S

Scalping: Very short trades — seconds to minutes — harvesting small moves many times a day. Maximum sensitivity to spreads, fills, and fees, which makes it the worst style for beginners despite looking the most exciting.
Shooting star: A candle with a small body near the bottom and a long upper wick, appearing after a rally. It records rejection of higher prices — buyers pushed up, sellers slammed it back. The bearish mirror of the hammer, and equally location-dependent.
Short (short selling): A position that profits when price falls: borrow shares, sell them, buy back cheaper. Requires a margin account, and losses are theoretically unlimited — price can rise forever. Not a beginner tool.
Slippage: The difference between the price you expected and the price you got. Small per trade, corrosive over hundreds of trades — and always worse than your backtest assumed. Budget for it in your expectancy math.
Spinning top: A candle with a small body and long wicks on both sides. Both sides fought; nobody won. Usually a “don’t trade this” signal, not an entry.
Spread: The gap between the bid and the ask. You pay it to enter and again to exit — it’s the toll booth of trading. Wide spreads (thin stocks, premarket) can quietly consume an entire edge.
Stop order (stop-loss): An order that triggers when price reaches your level, closing the position to cap the loss. Stops go where your trade idea is proven wrong — typically just beyond the signal candle’s wick — not where the loss starts to hurt.
Stop-limit order: A stop that becomes a limit order (instead of a market order) when triggered. Protects you from a terrible fill but can leave you unfilled — and still in the losing trade — if price blows through your limit.
Support: A price level where buying has previously overwhelmed selling — prior lows, the premarket low, round numbers. The mirror of resistance. Levels that have been tested multiple times carry more information when they hold — or break.

T

Ticker: The short symbol identifying a stock (AAPL, SPY, TSLA). Day traders concentrate on a small set of liquid tickers rather than hunting a new one every day.
Timeframe: The window each candle summarizes — 1-minute, 5-minute, daily. Same market, different resolutions. Read them top-down: daily for context, 15-minute for structure, 5- or 1-minute for execution. Never the reverse.
Trend: Price making higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend). Trade with it until it visibly breaks. “It’s gone up too much” is not a strategy.

V

Volume: How many shares traded during a candle’s window. Volume is the polygraph for price patterns: a reversal candle on five times average volume is real interest; the same candle on thin volume is noise.
VWAP (volume-weighted average price): The day’s average price weighted by volume — where the average dollar traded. Institutions benchmark against it, which makes it a widely watched intraday level: price above VWAP reads as buyers in control, below as sellers.

W

Wick (shadow, tail): The thin line above or below a candle’s body, marking prices the market visited and rejected. Long wicks are the record of a fight — who probed, who pushed back. Reading them is Part 3 of the tutorial.
Win rate: The percentage of trades that make money. Beginners overrate it: a 40% win rate with 2R winners is profitable; a 70% win rate with occasional −5R disasters is ruin. Win rate only means something next to average win and loss size — that combination is expectancy.

Day Trade Money

The glossary: every term, in plain English

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See these terms working on a live chart

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