Glossary

Heavy volume met by a willing opposite side, leaving price roughly where it started.

Large selling arrives and price barely falls, or heavy buying arrives and price barely rises. Someone is taking the other side in size. The observation is real and the inference is not: absorption tells you a large participant was willing to transact there, never who they were or whether they will continue.

See also: Churn, Climax, Volume.

A cumulative volume line weighted by where the close sits inside each period's range.

A refinement of on-balance volume: instead of counting a period as wholly up or wholly down, it weights that period's volume by where the close finished within the high–low range. A close near the high adds most of the volume, a close in the middle adds almost nothing. It handles indecisive periods better and still cannot see who was buying or why.

See also: On-balance volume, Chaikin Money Flow, Volume.

Historical prices restated for splits and dividends.

Corporate actions change the raw price without changing what a holder owns. Adjusted history restates earlier prices so the chart reflects actual returns. Unadjusted history shows sudden drops that were never losses.

See also: Stock split, Dividend.

A VWAP measured from a chosen event rather than from the session open.

Anchoring to an earnings release, a gap, a breakout, or a significant high answers a specific question: what has the average buyer since that moment paid? Because the anchor is a judgement call, the tool is only as meaningful as the reason for the anchor. An anchor chosen because its line looks good on the chart is a curve fitted after the fact.

See also: VWAP, Overfitting, Volume.

The lowest price sellers are currently accepting.

If you buy right now, the ask is what you pay. Because you buy at the ask and sell at the bid, every round trip starts slightly behind.

See also: Bid, Spread.

The typical number of shares or contracts traded per day over a lookback window.

A baseline, not a target. Comparing today against a 20- or 50-day average is what turns a raw count into information: 4 million shares means nothing until you know whether the usual day is 400,000 or 40 million. The window length is a real choice. A short window adapts quickly and is easily distorted by one event day, a long window is stable and slow to notice a genuine change in participation.

See also: Volume, Relative volume, Liquidity.

Testing rules against historical data.

A way to check whether an idea would have worked, and an easy way to fool yourself. A backtest is only meaningful with realistic costs, a large and varied sample, and rules fixed before looking at the results.

See also: Overfitting, Sample size, Look-ahead bias.

An erroneous price printed in the data feed.

Feeds occasionally publish prices that never genuinely traded: a fat-finger entry, a glitch, or a mis-stamped print. They appear as impossible spikes. Treating one as a real level is how a chart-reading habit becomes an expensive mistake.

See also: OHLC, Liquidity.

How often something happens anyway, before your rule is applied.

If price rises 52% of the time regardless, a pattern preceding a rise 54% of the time adds almost nothing. Judging any pattern means comparing it against the base rate. Otherwise you're measuring the market's default behaviour and calling it an edge.

See also: Edge, Sample size, Expected value (EV).

The highest price buyers are currently offering.

If you sell right now, the bid is what you receive. It is a live number that moves as orders arrive and disappear.

See also: Ask (offer), Spread.

A loan you make to a government or company.

The issuer promises to repay the amount borrowed by a set date and usually pays interest along the way. A bondholder is a lender, not an owner. A different claim with different risks.

See also: Stock (share).

The firm that routes your orders and holds your account.

Your access point to markets. Brokers differ in costs, execution quality, reliability, and, importantly, in whether they are properly registered with a regulator you can verify.

See also: Exchange, Market maker.

A bar showing one period's open, high, low, and close.

The body spans open to close. The wicks reach to the high and low. Direction comes from whether the close is above or below the open, never from colour alone, since colour schemes differ and not every reader can distinguish them.

See also: OHLC, Doji, Wick (shadow).

A final wave of forced or panicked selling on very heavy volume.

Holders who intended to wait give up at once, often because they are being forced out rather than choosing to leave. It is a description of participant behaviour, identifiable with confidence only afterwards. Anyone certain they're watching capitulation as it happens is making a prediction, not an observation.

See also: Climax, Margin call, Volume.

An account where you can only trade with money you actually have.

No borrowing, so no interest charges, no margin calls, and no possibility of owing more than you deposited. The trade-off is fewer positions and waiting for settlement. Protections that are genuinely valuable while learning.

See also: Margin account, Settlement.

The accumulation/distribution idea summed over a fixed window instead of forever.

Because it uses a window (commonly 20 or 21 periods) it oscillates around zero rather than drifting endlessly, which makes recent pressure easier to compare. The trade-off is a hard edge: a large day dropping out of the back of the window moves the reading without anything happening in the market today.

See also: Accumulation/distribution line, Money Flow Index, Volume.

High volume producing very little net price movement.

A great deal of trading and almost no progress. It signals that participants strongly disagree about value at this price. Which is genuinely informative about the present and almost useless as a forecast, because the disagreement can resolve in either direction.

See also: Absorption, Volume, Range.

An extreme volume surge at the end of a strong move.

A buying climax ends an advance, a selling climax ends a decline, but the label is applied after the move actually ends. In real time, enormous volume during a sharp move is equally consistent with a trend accelerating. Every climax is obvious in hindsight, which is exactly why it is dangerous to trade as though it were obvious in advance.

See also: Capitulation, Volume, Outcome bias.

Growth that earns further growth on itself.

Each period's gains join the balance and start earning too, so value accelerates rather than rising by a flat amount. It works identically against you on debt. Which is why high-interest balances grow so fast.

See also: Inflation, Rule of 72.

Waiting for follow-through before acting on a pattern.

Requiring the next candle to extend in the expected direction before treating a pattern as meaningful. Confirmation trades price for accuracy: you give up part of the move in exchange for filtering out shapes that go nowhere.

See also: Engulfing pattern, Base rate.

When someone's advice also happens to pay them.

A person recommending a broker, course, or asset may earn referral fees, course sales, or profit from your buying. The advice may still be sound, but you cannot evaluate it without knowing how the person gets paid.

See also: Pump and dump.

How sound a choice was given what you knew at the time.

Assessed from the information, reasoning, and risk control available before the outcome was known. Good decisions sometimes lose. Bad decisions sometimes win. Reviewing decision quality separately from results is what makes improvement possible.

See also: Outcome bias.

Spreading exposure so one bad outcome cannot sink everything.

Holding assets that do not all fail together. It reduces the damage of being wrong about any single company or theme. It does not remove market-wide risk.

See also: ETF (exchange-traded fund).

A share of company profits paid out to shareholders.

A cash payment some companies distribute, usually quarterly. Dividends are decided by the company and can be cut or stopped. The share price typically adjusts downward by roughly the payment on the day it is separated from the stock.

See also: Stock (share), Adjusted price.

A candle that opens and closes at nearly the same price.

The period travelled but settled where it began: a picture of indecision between buyers and sellers. It describes what happened. It does not predict what comes next.

See also: Candlestick.

How far an account has fallen from its previous peak.

Measured as a percentage from the high-water mark. Recovery is not symmetric: a 50% drawdown requires a 100% gain to return to level, which is why limiting drawdown matters more than chasing large gains.

See also: Risk per trade, Position size, Variance.

A basket of many assets that trades like a single stock.

One purchase gives exposure to everything the fund holds, which spreads risk across many companies instead of one. ETFs charge ongoing fees and can hold anything, broad or extremely narrow, so what is inside matters.

See also: Stock (share), Diversification.

A real, repeatable reason your decisions beat chance.

A measurable advantage that survives costs and many repetitions. Most people who believe they have an edge have a small sample and a good memory for their wins. An edge is demonstrated with evidence, not asserted.

See also: Expectancy, Sample size.

Comparing the volume spent against the price movement obtained.

Volume is the effort, price change is the result. Large effort with a large result says the move met little opposition. Large effort with a tiny result says it met a great deal. Framing volume this way avoids the trap of asking whether volume is 'bullish', a question the data cannot answer, and replaces it with one it can inform.

See also: Absorption, Churn, Volume.

Savings set aside to cover roughly 3–6 months of essentials.

Cash kept deliberately boring and reachable, so that a lost job, a medical bill, or a broken car does not force you to sell investments at the worst moment or borrow at high interest. Its job is not growth. It is preventing forced decisions.

See also: Risk capital.

A candle whose body completely covers the previous candle's body.

A bullish engulfing closes above the prior open after opening below the prior close. A bearish engulfing mirrors it. It describes one period decisively overturning the previous one, and it appears constantly in ordinary noise, so location does most of the work.

See also: Harami, Outside bar, Candlestick.

The venue that matches buyers with sellers.

A regulated marketplace that publishes prices and matches orders under known rules, so that buyers and sellers who have never met can trade with confidence about settlement.

See also: Broker, Market maker.

What a repeated decision is worth on average per attempt.

Each possible outcome's value multiplied by its probability, all added together. Positive expectancy means the math favours you over many repetitions. It never promises the next result. Negative expectancy (like a casino's house edge) means repetition works against you.

See also: Expected value (EV), Variance, Edge.

The average result of a bet if you could repeat it many times.

Computed by multiplying each outcome by its probability and summing. A game paying $2 half the time and losing $1 half the time has EV of +$0.50 per play. EV describes the long run, not any single play.

See also: Expectancy, Variance, Sample size.

The shares actually available for public trading.

Excludes closely held or restricted shares. A small float means fewer shares changing hands, which tends to produce violent price moves and wide spreads. Attractive-looking volatility that is often expensive to trade.

See also: Market capitalisation, Liquidity.

Putting money at risk with no edge and negative expectancy.

The defining feature is not the venue or the excitement. It is the mathematics. Where there is no edge, the expected result of repeating the wager is a loss, and repetition makes that loss more certain rather than less. Trading without an edge is gambling regardless of what the screen looks like.

See also: Trading, Investing, Edge, Expectancy, Expected value (EV).

A jump between one period's close and the next period's open.

Markets are closed for hours or days at a time, and news arriving in between is priced in the moment trading resumes. With no opportunity to trade at the levels skipped over. This is why stops cannot promise their exit price.

See also: Stop order.

A small body at the top of the range with a long lower wick, after a decline.

Sellers pushed price well below the open and buyers recovered most of it by the close. It is a hammer only when it appears after a decline: the identical shape after an advance is a hanging man. The name depends on location, not on the candle.

See also: Hanging man, Pin bar, Candlestick.

The hammer's shape, but appearing after an advance.

Identical anatomy to a hammer with the opposite conventional reading, because it follows a rise rather than a decline. That two names describe one shape is the clearest proof that context, not shape, carries the meaning.

See also: Hammer, Candlestick.

A small candle whose body sits inside the previous larger body.

The opposite arrangement to an engulfing: a large move followed by a small contained one, conventionally read as momentum pausing. When the second candle is a doji it is called a harami cross.

See also: Engulfing pattern, Inside bar, Doji.

A price area in a profile where an unusually large amount traded.

A thick shelf in the profile. Both buyers and sellers were willing to transact there repeatedly, which is why price often moves slowly through such an area. There is business to be done at every step. A node describes past acceptance. It does not promise price will stall there again.

See also: Volume profile, Low-volume node, Point of control.

The gradual rise in prices that shrinks what money buys.

If prices rise about 5% a year, money left idle buys roughly 5% less each year, compounding quietly against cash. This is why 'perfectly safe' cash still carries a cost over long periods.

See also: Compounding.

A candle whose whole range sits within the previous candle's range.

The period made no new high and no new low: a pause, and narrowing disagreement. Inside bars often precede larger moves in either direction, which is a claim about volatility rather than direction.

See also: Outside bar, Volatility.

Owning something productive and giving it years to compound.

A company earns profits, a bond pays interest, a property collects rent. You are not predicting next week. You are accepting a share of what an asset produces over a long period. The time horizon is what separates it from trading, not the instrument used.

See also: Trading, Gambling, Compounding, Stock (share).

Two opposite candles separated by a gap, with no body overlap.

Price closes one period in one direction, then opens beyond it in the other and continues, usually around news. Rare, and largely a description of a gap and the repricing that caused it.

See also: Gap, Engulfing pattern.

Controlling a larger position than your own money would allow.

Borrowed exposure multiplies percentage outcomes in both directions. At 5× leverage a 20% adverse move erases the entire deposit. Leverage does not improve an edge. It enlarges whatever the edge already is, including a negative one.

See also: Margin account, Margin call, Position size.

Trade only at your price or better, or not at all.

Guarantees the price bound but not execution. If the market never reaches your limit, nothing happens, which is sometimes exactly what you want.

See also: Market order.

A single line connecting each period's closing price.

The simplest chart: it discards open, high, and low, keeping only closes. That loss of detail is sometimes an advantage. It strips intraperiod noise and makes the overall path easier to see.

See also: Candlestick, OHLC.

How easily you can trade near the quoted price.

In liquid markets there are many buyers and sellers, spreads are tight, and reasonable size trades near the displayed price. In illiquid markets, getting in is easy and getting out can be expensive, or, in a panic, barely possible.

See also: Spread, Volume, Slippage.

A price axis where equal distances mean equal percentage moves.

On a linear axis, $10 to $20 and $110 to $120 look identical although one doubled and the other rose 9%. A log axis spaces by percentage instead, which is usually the honest way to view long periods or large price ranges.

See also: Timeframe, Candlestick.

Accidentally using information that wasn't available yet.

Testing a rule with data that only existed after the decision point: a closing price used mid-session, or a later revision of a figure. It produces spectacular results that cannot be repeated in real time.

See also: Backtest, Survivorship bias.

A price area in a profile where very little traded.

A gap in the profile's shape. Price passed through quickly and few participants transacted, usually because the area was rejected. Price re-entering a thin area often travels quickly across it for the same reason it did the first time (there is little business to slow it down) but 'often' is doing real work in that sentence.

See also: Volume profile, High-volume node, Value area.

An account that lets you trade with borrowed money.

The broker lends against your holdings, which magnifies both gains and losses and adds interest. If the account value falls below a required level, the broker can demand more money or sell your positions for you, at their timing rather than yours.

See also: Leverage, Margin call, Cash account.

A demand for more money when a leveraged account falls too far.

If the account no longer meets the required minimum, the broker asks for a deposit or closes positions to recover the loan. Liquidation happens on their schedule, often at the worst moment, and does not wait for your view to be proven right.

See also: Margin account, Leverage.

Share price multiplied by the number of shares outstanding.

A measure of a company's total market value. Two companies with the same share price can be wildly different sizes. Price alone says nothing about scale, which is why a $5 stock is not automatically 'cheap'.

See also: Stock (share), Float.

The scheduled period when an exchange matches orders normally.

Each exchange has a defined regular session, plus holidays and occasional early closes. Outside those hours liquidity is thinner, spreads are wider, and prices can move a long way before the next regular session opens.

See also: Premarket and after-hours, Gap, Liquidity.

A firm that always quotes a buy and a sell price.

By standing ready on both sides, market makers let you trade even when no other ordinary buyer or seller is present. They are paid through the spread between their buying and selling prices.

See also: Spread, Liquidity.

Trade now, at whatever price is available.

Guarantees execution but not price. In fast-moving or thinly traded markets, the fill can differ noticeably from the last price you saw.

See also: Limit order, Slippage.

A candle with a full body and almost no wicks.

Price opened at one extreme and closed at the other, travelling one way for the whole period. It records conviction during that period. Like every candle it says nothing about the next one.

See also: Candlestick, Doji.

A bounded oscillator built from price and volume together.

Often described as a volume-weighted relative-strength measure: it compares periods of rising typical price against falling ones, weighting each by the money that changed hands. Being bounded between 0 and 100 makes extremes easy to spot and easy to over-read. A high reading means unusual buying pressure recently, not that a reversal is due.

See also: Chaikin Money Flow, Volume, Volume divergence.

Three candles: strong move, small pause, strong move the other way.

A morning star follows a decline (down candle, small-bodied candle, up candle closing well into the first body). An evening star mirrors it after an advance. The middle candle is the pause where momentum stalled.

See also: Doji, Engulfing pattern, Candlestick.

The average price over a rolling window of periods.

Smooths short-term noise to make the general direction easier to read. Because it is built from prices that already happened, it always lags. It describes where price has been, never where it is going.

See also: Trend, Timeframe.

Open, high, low, close: the four prices that summarise a period.

Open is the first traded price of the period, high and low are its extremes, close is the final price. Nearly every chart type is built from these four numbers.

See also: Candlestick, Timeframe.

A running total that adds a period's volume on up closes and subtracts it on down closes.

A cumulative line built from one crude rule, which is both its appeal and its weakness: a candle that closes a cent higher adds its entire volume, and a candle that closes a cent lower subtracts all of it. The line's absolute value is meaningless. Only its direction and its agreement or disagreement with price carry any information.

See also: Accumulation/distribution line, Volume divergence, Volume.

The number of derivative contracts currently outstanding, not the number traded.

Volume counts contracts that changed hands today. Open interest counts positions still open. They answer different questions: rising volume with rising open interest suggests new positions are being built, while rising volume with falling open interest suggests existing positions are being closed. Open interest exists for options and futures and has no equivalent in ordinary share trading, where shares are not created and destroyed by trading.

See also: Volume, Expectancy.

Judging a decision only by how it turned out.

The habit of calling a decision 'good' because it won and 'bad' because it lost. In markets, where randomness dominates short-term results, outcome bias teaches exactly the wrong lessons: it rewards reckless winners and punishes disciplined losers.

See also: Variance, Decision quality.

A candle whose range engulfs the previous candle's entire range.

Price exceeded both the prior high and the prior low in one period, expanding disagreement. Where it closes within that range carries most of the information.

See also: Inside bar, Engulfing pattern.

Tuning rules until they fit past data, and only past data.

Add enough conditions and any history can be made to look profitable. Such a strategy has memorised noise instead of learning a pattern, and it typically fails immediately on data it has not seen.

See also: Backtest, Sample size, Edge.

Seeing meaningful patterns in randomness.

The tendency that finds faces in clouds finds textbook formations in noise. Charts are especially prone to it: a long enough history contains every shape somewhere, and the eye searches until it finds one.

See also: Base rate, Overfitting.

A two-candle reversal where the second candle recovers past the midpoint of the first.

A piercing pattern follows a decline: a down candle, then an up candle closing above the midpoint of the first body. Dark-cloud cover is its mirror after an advance. Both are weaker relatives of engulfing. The recovery is partial rather than complete.

See also: Engulfing pattern, Candlestick.

Any candle whose wick dominates a small body.

An umbrella term for hammers, shooting stars, and similar shapes: price probed a level and was rejected within the period. A description of what happened, not a signal on its own.

See also: Hammer, Shooting star, Wick (shadow).

The single price where the most volume traded over the profiled range.

The fattest bar in a volume profile: the price both sides did the most business at. It is a description of where agreement was densest, not a magnet or a prediction. Its usefulness is as a reference: price returning to a heavily traded area meets a very different supply picture than price entering an area almost nobody traded.

See also: Volume profile, Value area, High-volume node.

How much you commit to a single trade.

The most controllable variable in trading, and usually the one that decides survival. Sizing determines what a normal losing streak costs you: the same strategy can be sustainable at one size and ruinous at another.

See also: Risk per trade, Leverage, Drawdown.

Trading sessions before the open and after the close.

Extended sessions exist but are thin: fewer participants, wider spreads, and prices that can differ sharply from where the regular session eventually opens. A dramatic move on tiny extended-hours volume is weak evidence of anything.

See also: Market hours, Liquidity, Volume.

Promoters hype an asset they already own, then sell into your buying.

Early holders create excitement (often in group chats or social posts) so that new buyers push the price up. The promoters sell into that demand and the price collapses on the people who arrived last. The promotion is the product.

See also: Conflict of interest.

Price oscillating between a recognisable floor and ceiling.

Repeated respected boundaries define a range. Its edges carry information. Its middle usually carries far less.

See also: Trend, Support and resistance.

A result locked in because the position was closed.

Only closing a position converts a price movement into an actual gain or loss. Until then the number on the screen is a possibility, not a result.

See also: Unrealized profit or loss.

Today's volume measured against what is normal for this instrument at this time of day.

Usually a ratio: 2.0 means twice the usual participation. The time-of-day part matters more than beginners expect, because volume is not spread evenly through a session. Comparing 10am volume against a full-day average makes every morning look quiet and every afternoon look busy. Relative volume is how you ask 'is anyone unusually interested today?' without being fooled by the clock or by the instrument's size.

See also: Average daily volume, Volume, Volume dry-up.

Money you could lose completely without changing your life.

Money left over after your needs, your goals, and your emergency fund are funded. Money whose total loss would not cost you rent, food, school fees, or safety. Rent money, borrowed money, and emergency savings are never risk capital, no matter how good an opportunity looks.

See also: Emergency fund, Expectancy.

The money you accept losing if a single trade fails.

Usually expressed as a small percentage of the account. Fixing it in advance means a losing run is an inconvenience rather than a catastrophe, and it removes the temptation to size by how confident you feel.

See also: Position size, Stop order, Drawdown.

What you stand to gain compared with what you risk.

Risking $100 to make $300 is a 1:3 ratio. It only means something alongside how often the trade works: a great ratio with a poor hit rate can still lose money, which is why expectancy matters more than either number alone.

See also: Expectancy, Expected value (EV), Risk per trade.

Divide 72 by a growth rate to estimate years to double.

A mental shortcut, not exact arithmetic. At 8% a year, roughly 9 years to double (72 ÷ 8). At 24% interest on a debt, roughly 3 years for the amount owed to double.

See also: Compounding.

How many results you're judging from.

Small samples are dominated by luck. Distinguishing genuine skill from chance requires many results across different market conditions, and costs must be included before calling anything an edge.

See also: Variance, Edge.

When ownership and cash actually change hands after a trade.

Executing a trade and completing it are different moments. Until settlement, some brokers restrict how the proceeds can be reused, which is why an account can show a balance that is not yet fully usable.

See also: Broker, Cash account.

A small body low in the range with a long upper wick, after an advance.

Buyers drove price far above the open and lost nearly all of it by the close. The same shape after a decline is usually called an inverted hammer. Again, location does the naming.

See also: Hammer, Wick (shadow), Pin bar.

Selling borrowed shares, hoping to buy them back cheaper.

Profits if the price falls. Unlike buying, the potential loss has no natural ceiling, because a price can keep rising indefinitely. Shorting also involves borrowing costs and the risk that the lender recalls the shares.

See also: Leverage, Stock (share).

The difference between the price you expected and the one you got.

Caused by prices moving between your decision and your fill, or by your order being larger than what is available at the best price. Worst in fast markets and thin ones.

See also: Market order, Liquidity, Spread.

A small body with visible wicks on both sides.

Price travelled meaningfully in both directions and finished near where it began. Balance between buyers and sellers, with a slightly larger body than a doji.

See also: Doji, Candlestick.

The gap between the bid and the ask. A cost you pay instantly.

Buying at the ask and selling at the bid means the price must move in your favour by at least the spread before you break even. Wide spreads signal thin trading and quietly raise the cost of every trade.

See also: Bid, Ask (offer), Liquidity, Slippage.

A unit of ownership in a company.

Owning stock makes you a part-owner entitled to a share of the company's future profits and exposed to its losses. Nothing about that future is guaranteed.

See also: Bond, ETF (exchange-traded fund).

Dividing existing shares into more, cheaper shares.

A 2-for-1 split doubles the share count and halves the price. Owners hold the same total value. On an unadjusted chart this looks like a 50% crash, which is why data adjustment matters before drawing any conclusion.

See also: Adjusted price, Stock (share).

A resting trigger that becomes a market order when touched.

Commonly used to exit automatically if price moves against you. Because it converts to a market order, it limits typical losses but cannot guarantee the exit price. Through a gap it can fill far below the trigger.

See also: Market order, Gap, Slippage.

Price areas where buying or selling has repeatedly appeared.

Zones, not exact lines, where price has previously stalled or reversed. They are hypotheses about where participants may act again. Regularly broken, and not guarantees.

See also: Range, Trend.

Studying only the things that lasted.

Testing a strategy on companies that still exist ignores every one that failed and was removed, so the results describe a group selected for having survived. The same error makes successful traders look more representative than they are.

See also: Backtest, Sample size.

Three consecutive strong candles in the same direction.

Three sizeable bodies each closing beyond the last, describing sustained one-way pressure. Because it takes three periods to form, much of the move has usually already happened by the time the pattern exists.

See also: Marubozu, Trend.

A count of price updates, used where true traded volume is unavailable.

In decentralized markets such as spot forex there is no central tape, so many platforms count how many times the price changed instead of how much actually traded. It correlates with real activity but it is a different measurement: one update can represent any size at all. Treating tick volume as though it were share volume quietly imports an assumption the data cannot support.

See also: Volume, Bad tick, Liquidity.

How much time each candle on the chart represents.

A daily chart's single candle contains a whole day of five-minute candles. Trends at different timeframes can point in different directions without either being wrong. They answer different questions.

See also: OHLC, Trend.

Trying to profit from shorter-term price changes.

Days, hours, sometimes minutes. It can be done with real discipline and it is genuinely difficult: costs are paid on every round trip, and most short-term traders lose money after those costs. What makes it trading rather than gambling is a repeatable edge and a positive expectancy, not the speed.

See also: Investing, Gambling, Edge, Expectancy.

A pause imposed by an exchange or regulator.

Trading can be suspended for pending news, extreme volatility, or a regulatory concern. While halted you cannot exit at any price. A reminder that stop orders depend on a functioning market, not just on your instructions.

See also: Stop order, Gap.

A repeated staircase of higher highs and higher lows, or lower ones.

An uptrend makes successively higher peaks and higher troughs. A downtrend does the reverse. Trends are descriptions of what price has done, and they end without warning.

See also: Range, Timeframe.

Two or more candles sharing almost the same high or low.

Price reached a level, failed, returned, and failed again at nearly the same price. Its relevance comes from the level being tested twice. A structure observation more than a candle one.

See also: Support and resistance, Candlestick.

A paper gain or loss on a position you still hold.

It moves with every price tick and can shrink or disappear entirely before you act. Treating unrealized gains as spendable income is a classic way to be surprised later.

See also: Realized profit or loss.

The average price of a session weighted by the volume traded at each price.

Volume-weighted average price. Every trade contributes in proportion to its size, so it answers 'what did the average share actually cost today?' rather than 'what was the midpoint of the range?'. Its origin is execution quality: an institution filling a large order over hours is measured against it. That benchmark role, not any predictive power, is why the level attracts attention.

See also: Anchored VWAP, Volume, Moving average.

The price band containing the bulk of a profile's volume, conventionally about 70%.

The range in which most business was transacted, with the extremes trimmed away. The 70% figure is a convention borrowed from a normal distribution, not a law of markets, and profiles are frequently not normal at all. Used carefully it separates 'prices this market has spent real time accepting' from 'prices it visited and left'.

See also: Volume profile, Point of control, Low-volume node.

How much individual results scatter around the average.

The reason a good decision can lose and a bad decision can win. High variance means single results tell you very little about the quality of the process that produced them.

See also: Expected value (EV), Sample size, Outcome bias.

How much and how quickly a price moves around.

A measure of movement, not direction. High volatility means larger swings in both directions, which widens the range of outcomes. It is a description of risk, not evidence of an opportunity.

See also: Variance, Range, Liquidity.

How much was actually traded in a period.

A record of participation, not a prediction. High volume means many shares or contracts changed hands. It does not by itself mean price will rise or fall.

See also: Liquidity.

Price making a new extreme while a volume-based measure does not.

Price sets a higher high, the volume line does not, and the move is described as unconfirmed. Divergence identifies a disagreement between two measurements, nothing more. Its failure mode is severe and well documented: strong trends produce divergences repeatedly and continue anyway, so trading a divergence as a reversal signal means fighting the trend with a tool that has no timing information in it.

See also: On-balance volume, Confirmation, Money Flow Index.

Participation falling away during a pullback or a pause.

A pullback on progressively lighter volume suggests few participants are motivated to sell at these prices. The move down is drift rather than urgency. It is one of the more useful volume observations because the absence of effort is itself evidence. It is still not a signal on its own: quiet markets can stay quiet, or fall on the first piece of news.

See also: Relative volume, Volume, Trend.

A histogram of how much volume traded at each price rather than in each period.

An ordinary volume bar answers 'how much traded during this hour?'. A profile turns the question sideways and asks 'how much traded at this price?', producing a shape that shows where business was actually done. Prices where a great deal traded were accepted by both sides. Prices with almost none were rejected quickly.

See also: Point of control, Value area, High-volume node.

The thin line showing prices touched but not held.

A long wick means price travelled there during the period and was pushed back before the close. Evidence that one side gave ground.

See also: Candlestick.

The share of trades that end profitably.

On its own it says very little. A 30% win rate is profitable if the wins are large enough, and a 90% win rate loses money if the rare losses are catastrophic. Win rate is only interpretable next to average win and average loss.

See also: Expectancy, Risk-to-reward ratio, Expected value (EV).