TRADER'S GLOSSARY: KEY TERMS FOR SUCCESSFUL TRADING

Understanding Position Status

Locked-in trader – a trader who is in a losing position and is waiting for a price correction in the direction of the breakeven point or further profit growth. This state requires special discipline and adherence to a risk management plan.

Leverage – a loan provided by the trading platform to the trader to increase the size of a trade beyond their available funds. It is a powerful tool that amplifies both profits and losses when misused.

Market Dynamics and Price Movements

Volatility – rapid and significant fluctuations in the asset’s value over short periods. High volatility creates both risks and opportunities for profitable trading.

Trend Break in Long – when the price breaks the last (HIGH) on the selected timeframe with confirmation, signaling a possible reversal of the upward movement (detailed description of the PP technique is contained in the relevant section).

Trend Break in Short – a break of the last (LOW) on the chart with proper confirmation, indicating a potential reversal toward downward movement.

Price Levels and Their Behavior

Breakout – a situation where the price passes through a support, resistance, opening point, horizontal level, or trend line (and remains outside its boundary). Strong levels are usually confirmed by a retest from the opposite side before continuing the movement.

Fakeout – a term applied to any levels on the chart and describes a situation where the price crosses the level but then quickly returns beyond its boundaries (usually within one or two candles). This movement often indicates a lack of sufficient strength to continue the breakout.

Knowledge of this trader terminology is necessary for correct interpretation of price movements and making well-founded trading decisions. Each term in this trader’s dictionary represents an important element of technical analysis that helps identify entry and exit points for positions.