Day Trading seems to have its own lingo and vocab that can seem scary when you first hear it. However, once you know the few basic terms, it really is quite simple and super easy to remember.
Intraday trading – in and out of all positions within the same day – not holding anything overnight or longer.
Going long – bullish – market going up – you know that big bull we see pictures of on Wall Street – this is where we get the bullish term from. The bull is charging.
Going short – bearish – market going down
Buy – this is when you enter the market with the prospect of it going up so you can sell it at a higher price
Sell – this is when you are entering the market with the prospect of it going down, and you can earn money on the difference
NOTE – in the Futures Market, going long or going short is identical as in what we look for to trade. Future traders don’t care at all if the market is going up or down, as long as we enter properly into the trade and have specific targets (either less than our price or higher than our price)
Indicators – this is what you will be using on your chart to help you see the green lights for your entries.
Software – many traders and companies will be talking about softwares, all I have to say is beware. You don’t EVER need to buy any software to trade. Indicators, for the most part will be what you use, and they usually come for free with good chart/trading platforms.
Trading Platforms – this is the actual software that your charts will be coming from. You will need to use a platform that is connected to your brokerage account. I recommend only working with trading platforms that are free.
Risk management – you always, ALWAYS, need to have a risk management in place. You can never ever enter a trade without having your risk already there, or will lose it all. You can set this up with your trading platform, by putting in the amount of risk you are willing to give per trade. Or, if you want to manage it manually, make sure you know exactly what is the risk you are willing to put up and get out when it is in that range – NO MATTER WHAT.
Stop limit – this is your risk management. You will always have one in place. When you take a course that program can advise on the best stop management for you. But never enter a trade without one. You will lose everything. Stop limit is what you set on your trading platform so it is there to help you get out when you say you want to.
Target – this is what your target profit will be. It can either be up or down depending if you are buying or selling (going long or going short). You can set this up with your trading platform, or know when you want to get out. Remember, the key is not to get greedy and get out when you say you will.
Market entry – this is when you enter the market at the exact price it is at the moment. Traders never do this, you always know which price you want to enter at.
Let me know what questions you have and also if you have heard other terms and need help with
Related Read: Day Trading Terms And Definitions
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