42 day trading terms in plain English — from Ask and Bid to FVG, order blocks, slippage and VWAP.
| Ask | The lowest price a seller will accept. When you BUY, you pay the Ask. |
|---|---|
| Bid | The highest price a buyer will pay. When you SELL, you get the Bid. |
| Spread | Difference between Ask and Bid. The broker’s built-in cost per trade. |
| Bull Market | Prices trending UP over time. Buyers in control. |
| Bear Market | Prices trending DOWN 20%+ from highs. Sellers in control. |
| Long | You buy expecting price to go UP. Bullish position. |
| Short | You sell first, buy back cheaper. Profit from falling prices. |
| Stop Loss | Automatic exit at a defined loss. Non-negotiable. Always use one. |
| Take Profit | Automatic exit at your target profit level. |
| Liquidity | How easily you can buy/sell without moving price. High = smooth fills. |
| VWAP | Volume Weighted Average Price. Institutional benchmark. Price gravitates to it. |
| Confluence | Multiple signals at the same level. FVG + OB = very high confidence. |
| Reversal | Price changes direction. Can be temporary or start a new trend. |
| Breakout | Price moves decisively beyond S/R with volume. Often starts a new leg. |
| Fake-out | Price breaks a level then immediately reverses. Designed to trap traders. |
| Support | Level where buyers historically step in and halt the decline. |
| Resistance | Level where sellers historically step in and halt the rally. |
| Market Structure | Pattern of HH/HL (uptrend) or LH/LL (downtrend). The map. |
| Imbalance | Another word for FVG. Area where price moved too fast for both sides. |
| Institutional Flow | Large orders from banks and funds. What actually moves markets. |
| Liquidity Pool | Cluster of stops just beyond swing highs/lows. Institutions hunt these. |
| Smart Money Concepts | Trading style that follows institutional order flow footprints. |
| Kill Zone | ICT term for high-probability windows: London 2–5am, NY 7–11am ET. |
| Sweep | Price briefly moves past a level (grabbing stops) then reverses hard. |
| Futures | Contracts to buy/sell at a future date. NQ, ES, GC, SI trade nearly 24/7. |
| Leverage | Trading more than account value. Amplifies gains AND losses equally. |
| Margin | Collateral to hold leveraged positions. Drop below it = forced close. |
| Scalping | Seconds to minutes per trade. Many small trades, very tight stops. |
| Swing Trading | Holding days to weeks. Less screen time, bigger targets, overnight risk. |
| FVG | Fair Value Gap. 3-candle imbalance where price moved too fast. Magnet for re-tests. |
| Order Block (OB) | Last candle before a big institutional move. Institutions re-visit to fill remaining orders. |
| EMA | Exponential Moving Average. Weighted toward recent price. Faster than SMA at catching turns. |
| RSI | Relative Strength Index. 0–100 scale. Above 70 = overbought, below 30 = oversold. |
| MACD | Moving Average Convergence Divergence. Two EMAs showing momentum shifts. Cross = signal. |
| Bollinger Bands | Channels ±2 std deviations from a moving avg. Squeeze = breakout brewing. |
| ADX | Average Directional Index. Measures trend strength 0–100. Below 20 = choppy, above 25 = trending. |
| ATR | Average True Range. Measures volatility. Use it to size stops — not gut feeling. |
| EUR/USD Futures (6E) | CME forex futures tracking Euro vs US Dollar. Most-traded FX futures contract. |
| Micro Dow (MYM) | Micro E-mini Dow Jones futures. 1/10th size of YM. Lower margin, same moves. |
| Bitcoin Futures (BTC=F) | CME cash-settled Bitcoin futures. Tracks spot BTC, settles in USD — no wallet needed. |
| Micro Futures | Smaller contract sizes (1/10th) of standard futures. Gold=MGC, NQ=MNQ, ES=MES. Better for smaller accounts. |
| PDH / PDL | Previous Day High / Low. Major intraday reference levels institutions watch. |
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