Trading glossary — plain-English definitions

◆ CHART STRUCTURE & PRICE ACTION

Breakout: Price closes above a well-defined resistance level on above-average volume, suggesting the next leg higher has started."NVDA broke out of its $200 ceiling on 1.8× volume."
Resistance: A price level where selling has repeatedly overwhelmed buying on previous attempts — often a round number or prior high.
Support: The opposite of resistance — a price level where buying has repeatedly overwhelmed selling.
HH/HL Higher High / Higher Low: The structural definition of an uptrend: each swing high is above the last, each swing low is above the last. Opposite: LH/LL (lower highs, lower lows = downtrend).
Pullback: A short counter-trend move inside a larger trend, often to a moving average like the 21-EMA. Buyers use pullbacks to add to winning positions at better prices.
Wick: The thin line above or below a candle's body, representing the session's high or low. Long wicks often signal rejection — price went there and got shoved back.
Sweep Liquidity sweep: A quick move through a well-known price level (prior high, prior low, round number) followed by a hard reversal. Often institutional traders taking out retail stops before reversing.
Gap: When a stock opens at a price meaningfully different from yesterday's close, usually on news. “Gap up” = opens higher; “gap down” = opens lower.
Fib Fibonacci retracement: A tool that maps where price might pause on a pullback — standard levels are 38.2%, 50%, and 61.8% of the prior move. Useful as possible support; not magic.
Divergence: When price makes a new high/low but an indicator (like RSI) doesn't. Bearish divergence = price up but RSI down, often signaling weakening momentum.
Candle Candlestick: One bar on a chart showing open, high, low, and close for a given period (day, hour, 5min, etc.). Green = close above open; red = close below open.
Consolidation: A period where price trades sideways in a tight range, working off overbought/oversold conditions before the next directional move.

◆ INDICATORS

RSI Relative Strength Index: A momentum indicator (0–100) measuring the magnitude of recent gains vs losses. Above 70 = potentially overbought; below 30 = potentially oversold. Not a timing signal — price can stay extreme for weeks.
MACD Moving Average Convergence Divergence: A trend-following momentum indicator showing the difference between two EMAs. “MACD bullish” means the fast line has crossed above the slow line, suggesting momentum has turned up.
MA Moving Average: The average closing price over the last N sessions, plotted as a line. Smooths out noise. “50-day MA” = average of last 50 closes.
EMA Exponential Moving Average: A moving average that weights recent prices more heavily than older ones. Faster to react than a simple MA. 21-EMA and 50-EMA are common swing-trading anchors.
ATR Average True Range: The average distance between a bar's high and low over the last N sessions (typically 14). Measures volatility. Used to size stop-losses proportional to how much the stock normally moves."NVDA has an ATR of 5.08 — so a 3× ATR stop sits $15 below entry."
ADX Average Directional Index: A measure of trend strength (0–100), regardless of direction. Above 25 = strong trend; below 20 = choppy/weak. Used to filter out markets too directionless for trend-following entries.
OBV On-Balance Volume: A running total that adds volume on up days and subtracts it on down days. When OBV rises but price doesn't (or vice versa), it signals institutional accumulation/distribution under the surface.
VWAP Volume-Weighted Average Price: The average price weighted by volume over the trading session. Institutions often use VWAP as a benchmark — “buying below VWAP” is considered a good fill.
BB Bollinger Bands: Two lines plotted 2 standard deviations above and below a 20-period MA. Price touching the upper band often signals overbought; touching the lower signals oversold. “Squeezes” (narrow bands) often precede expansion.
Volume ratio: Current volume divided by its average (often 50-day). 2.0× = double normal volume = unusual activity. 0.5× = half normal = conviction lacking.

◆ RISK & POSITION SIZING

R:R Risk-to-Reward Ratio: How much you stand to make vs how much you stand to lose on a trade. R:R of 2.0 means $2 of profit potential for every $1 of risk. Most disciplined frameworks require ≥ 2.0 before entering.Entry $100 · Stop $95 · TP1 $115 → risk $5, reward $15 → R:R 3.0.
Stop-loss: A pre-set exit price below your entry that caps how much you can lose. Placed as an order at the broker so it triggers automatically.
Trailing stop: A stop-loss that moves up as price moves up, locking in gains. “Trail by $2” means stop stays $2 below the highest price reached.
Position size: How many shares (or contracts) to buy. Usually calculated from account size, stop distance, and max risk per trade. “Risk 1% per trade” is a common starting rule.
Position cap: The maximum percentage of your portfolio any single ticker can occupy. Swing Deck defaults to 25% (15% in defensive regimes) to prevent concentration risk.
Drawdown: The percentage your account is below its all-time high. If you went from $100k to $110k to $95k, you're in a 13.6% drawdown.
Max DD Maximum Drawdown: The worst peak-to-trough loss in your account's history. A core risk metric — funds advertise max DD as proof of discipline.
Sharpe ratio: Risk-adjusted return: average excess return divided by volatility. Above 1 = good; above 2 = great; below 0 = you're losing money. Answers “am I earning enough to justify the volatility?”
Kelly criterion: A formula for optimal bet sizing given win rate and win/loss ratio. Half-Kelly (bet 50% of what Kelly says) is common in practice to reduce variance.
CAGR Compound Annual Growth Rate: The smoothed annual return that would produce your actual total return over time. “16.8% CAGR” means your account grew at an equivalent 16.8%/year rate.
Win rate: The percentage of trades that are profitable. 50% win rate can be wildly profitable if R:R is 3:1; 70% win rate can still lose money if R:R is 0.5:1.
High-water mark: The highest account value you've ever reached. Drawdown is measured from this peak.
Risk-free rate: The return you could earn with zero risk — usually the yield on 3-month US Treasuries. Used in Sharpe ratio and as the “hurdle” your trading must beat to be worth the effort.

◆ MARKET REGIME & MACRO

VIX: The CBOE Volatility Index — options-implied expected volatility of the S&P 500 over the next 30 days. Nicknamed “the fear gauge.” Below 15 = calm; 15–25 = normal; 25–40 = anxious; 40+ = panic.
TNX 10-Year Treasury Yield: The yield (interest rate) on US 10-year government bonds. The core “risk-free rate” benchmark. Rising TNX = bonds more attractive → pressure on stocks.
DXY US Dollar Index: The US dollar's strength against a basket of major currencies (EUR, JPY, GBP, etc.). Rising DXY often pressures commodities and emerging-market stocks.
^GSPC: Yahoo Finance ticker for the S&P 500 index. The 500 largest US companies — the default “how's the market?” benchmark.
^IXIC: The NASDAQ Composite — tech-heavy index of ~3,000 stocks. Leads in bull markets, bleeds first in risk-off.
^RUT: The Russell 2000 — 2,000 small-cap US stocks. Small caps typically lead on risk-on, lag on risk-off. A risk-appetite tell.
ES=F / NQ=F E-mini Futures: Futures contracts tracking the S&P 500 (ES) and NASDAQ 100 (NQ). Trade ~24h so they show pre-market direction before the cash market opens.
Regime: The broad market environment — accumulation (buyers in control), distribution (sellers in control), euphoria (overextended up), panic (overextended down). Your strategy should shift with regime.
Pre-market: The trading window before the regular session (4:00 AM – 9:30 AM ET). Thin liquidity, wider spreads. Futures give a directional read during this window.
After-hours: Trading session from 4:00 PM – 8:00 PM ET. Where earnings reactions happen. Same thin-liquidity caveats as pre-market.

◆ BROKER & ORDER TYPES

Market order: “Fill me right now at whatever price.” Fastest execution, no price control. Risky in illiquid stocks where the spread can be wide.
Limit order: “Only fill me at $X or better.” Price-controlled but might not fill if the market never reaches your price.
Stop order: A market order that triggers when price crosses a level. Usually used to exit a losing position. Once triggered, fills at whatever the next print is — not guaranteed to be your stop price.
Stop-limit order: Like a stop order but the resulting order is a limit, not market. Prevents bad fills on thin gaps but may not fill at all if price blasts through your limit.
GTC Good-Till-Cancelled: An order that stays live until you cancel it (most brokers cap at 60 days). The alternative is DAY, which expires at close.
Day order: Order expires at market close the same day if not filled.
Fill: The actual execution of your order — the price and quantity that hit your account.
Slippage: The difference between the price you expected and the price you got. Market orders slip more than limit orders; thin stocks slip more than liquid ones.
Preview: A dry-run submission to the broker that validates the order and returns estimated fees, buying power impact, and warnings — without actually placing. Swing Deck previews every order before placing.
Bracket order OCO: An entry + stop + target submitted as one unit, where filling any leg cancels the others. Locks in a planned trade with no manual follow-up.
OAuth: The standard protocol for letting an app (like Swing Deck) talk to your broker account without ever seeing your broker password. You authorize once; the app gets a time-limited token.
Dryrun mode: A safety mode where Swing Deck performs the full preview flow with the broker but never calls “place.” Used to verify plumbing before flipping to live trading.

◆ OPTIONS

Call option: The right (not obligation) to BUY a stock at a specific price before expiry. You buy calls when you think the stock is going up.
Put option: The right (not obligation) to SELL a stock at a specific price before expiry. You buy puts when you think the stock is going down, or to hedge a long position.
Strike price: The price at which an option lets you buy (call) or sell (put) the underlying stock.
Expiry Expiration date: The date the option contract becomes worthless unless exercised or sold. Weeklies (Friday) are most liquid; monthlies (3rd Friday) are benchmarks.
ITM In-The-Money: A call is ITM if stock price is above strike. A put is ITM if stock price is below strike. ITM options have intrinsic value.
OTM Out-of-The-Money: The opposite of ITM. Call with strike above stock price; put with strike below stock price. OTM options are pure time-value — worthless if they expire OTM.
ATM At-The-Money: When the strike equals (or is closest to) the current stock price. ATM options have the most time decay and the highest gamma.
Premium: The price you pay to buy an option, or receive to sell one. Quoted per share — “$2.50 premium” = $250 per contract (100 shares).
IV Implied Volatility: The annualized expected move of the stock, backed out of the option's price. High IV = expensive options; low IV = cheap options. IV spikes before earnings and crashes right after.
IV Rank: Where current IV sits in the last 52 weeks as a percentile. IV Rank 90 = IV is higher than 90% of the past year. High rank = favor selling options; low rank = favor buying.
IV crush: The sharp collapse in option premium right after a known event (earnings, FDA decision) because the uncertainty is resolved. Can destroy long option positions even when direction was right.
Delta (Δ): How much the option's price moves per $1 move in the stock. Delta 0.50 = option gains $0.50 when stock gains $1. Also approximates the probability of finishing ITM.
Gamma (Γ): How fast delta changes. High gamma = delta shifts rapidly, which is great when you're right and brutal when you're wrong. Peaks ATM near expiry.
Theta (Θ): How much premium the option loses per day from time decay, all else equal. Long options bleed theta; short options collect it. Accelerates as expiry approaches.
Vega (V): How much the option's price moves per 1% change in IV. Long options are long vega (benefit from rising IV); short options are short vega.
CSP Cash-Secured Put: Selling a put while holding enough cash to buy the stock if assigned. A bullish-to-neutral income strategy — you collect premium, and if price tanks you end up owning the stock at your chosen price.
Covered call: Selling a call against 100 shares of stock you own. Collects premium; caps upside. Used to generate income on positions you're holding anyway.
Spread: Any options position with two or more legs. Common forms: vertical spread (different strikes, same expiry), calendar spread (same strike, different expiries).
Debit: A trade you pay to put on. Debit spread = net cost. Maximum loss is the debit paid.
Credit: A trade that pays you to put on. Credit spread = net premium received. Maximum profit is the credit; maximum loss is the width of the spread minus the credit.
Assignment: When the buyer of an option you sold exercises, forcing you to buy (short put) or sell (short call) the stock at the strike. Most likely on ITM options near expiry.
Exercise: Using your option to actually buy (call) or sell (put) the underlying at the strike. Most traders close their position rather than exercising.
Roll: Closing an existing option position and opening a new one further out in time (and sometimes at a different strike). Used to avoid assignment or extend the trade.
PoP Probability of Profit: The approximate chance an options position finishes profitable, derived from IV and time to expiry. 70% PoP doesn't mean the trade makes money — it means the trade expires with at least $0.01 of profit.

◆ PORTFOLIO CONCEPTS

Barbell portfolio: Most capital in safe, stable assets (anchors) + a smaller slice in high-upside / high-risk positions (sports cars). Minimizes drawdown risk while keeping asymmetric upside.
Anchor: A mature, slow-growth position with a strong moat — the boring half of the barbell. Think CEG, ETN, VRT.
Sports car: A high-upside, higher-volatility position — the exciting half of the barbell. Think NVDA, AVGO, AMD. Size small.
Cash armor: Swing Deck term for short-duration Treasury ETFs (SGOV, USFR, BIL) held as “working cash” — earning 4%+ yield while staying liquid enough to deploy within a day.
Hard asset: Something with zero counterparty risk — physical gold or gold-backed ETFs (GLD, IAU), Treasury bills. Keeps value when traditional portfolios implode.
Counterparty risk: The chance the entity on the other side of your trade (broker, bank, issuer) fails to deliver. US Treasuries have minimal counterparty risk; anything else has more.
Sleeve: A carved-out portion of the portfolio dedicated to one strategy. “Options sleeve” = the chunk of capital allocated specifically to options trading, separate from equity positions.
Sniper cash: Swing Deck term for the options sleeve's collateral pool — cash held specifically to back cash-secured puts and absorb assignments without touching core equity.
Allocation: How your capital is divided across asset classes, sectors, or positions. “50% equities, 30% bonds, 20% cash” is an allocation.
Rebalance: Trimming positions that have grown too large and adding to positions that have shrunk, restoring your target allocation. Usually done monthly or quarterly.

◆ SWING DECK-SPECIFIC TERMS

ARMED: Swing Deck status: filter pass + price-action trigger fired + all 13 pillars clear. The dashboard's “this is a green light to enter” state. Rare — most days the portfolio has zero ARMED positions.
HOLD: You own it, it's healthy, nothing to do. The default state for positions that are working as planned.
WATCH: The ticker passes the filter layer (indicators) but the trigger layer hasn't fired yet. Candidate; not an entry.
TIGHTEN: You own it, but the score has degraded. Either raise the stop-loss closer to price, reduce position size, or prepare to exit.
EXIT: Hard pillar breach or score collapse. The system is telling you to rotate this position to cash.
COLD: Filter fails — score below threshold. “Don't even look.” Saves attention for positions that actually need it.
TRAP: A structural uptrend that the scoring engine has flagged as likely distribution disguised as continuation. Typical markers: thin volume on the push, multiple wick sweeps, overbought weekly RSI. Entry blocked even though the chart “looks good.”
DE-RISK 25% / 50%: System recommendation to trim 25% or 50% of the position because of deteriorating conditions. DE-RISK 50% typically fires on exit-review signals; 25% on TIGHTEN-level degradation.
EXIT-REVIEW: Flag on a ticker whose score has dropped materially but hasn't breached a hard pillar yet. Human decision required.
Pillar: One of 13 risk rules baked into Swing Deck's decision engine. Example: Pillar 3 = 7% drawdown triggers 50% cash pivot; Pillar 5 = pre-market firewall on S&P futures.
Composite score: The 0–100 number each ticker gets, aggregating all sub-scores. 80+ = A/B grade; 65–79 = C; below 65 = D/F. Bias label (ACCUMULATE / HOLD / REDUCE / EXIT) is derived from score + pillar state.
Focus Mode: Dashboard toggle that collapses the portfolio view to only positions needing action (ARMED / TIGHTEN / EXIT). Most days the list is empty — discipline is doing nothing.
Pre-Market Firewall: Pillar 5: if S&P 500 futures (ES=F) are down > 1.5% before the open, block new long entries for the day. Prevents chasing into a gap-down market.
Cash Armor (audit label): Swing Deck marks positions like SGOV/USFR/BIL as “CASH ARMOR” in audit output — they're scored separately because standard equity scoring (RSI, MACD, ADX) doesn't apply to T-bill ETFs.
Regime label (ACCUMULATION / DISTRIBUTION / GREED / FEAR): Swing Deck's two-word market-state tag. ACCUMULATION = buyers in control; DISTRIBUTION = sellers; GREED = overheated bull; FEAR = panic. Position caps and sizing flex based on regime.
Stance (RESILIENCE / STANDARD): The dashboard's top-level posture. RESILIENCE = defensive mode (15% position caps, stop-limit only); STANDARD = normal conditions (25% caps).

Trading glossary.

◆ CHART STRUCTURE & PRICE ACTION

◆ INDICATORS

◆ RISK & POSITION SIZING

◆ MARKET REGIME & MACRO

◆ BROKER & ORDER TYPES

◆ OPTIONS

◆ PORTFOLIO CONCEPTS

◆ SWING DECK-SPECIFIC TERMS