Trading Terms
This glossary provides definitions for common trading terms, organized by category for easier reference. Terms marked with specific methodology tags (e.g., ICT/SMC) are used within those frameworks and may not be universally recognized industry standards.
This glossary includes both industry-standard terms used across professional trading and methodology-specific terms from various retail trading frameworks. Context and proper understanding of each term's origin and application is important for effective use.
Standard Market & Trading Terms
Market Participants & Roles
Arbitrage The simultaneous purchase and sale of an asset in different markets to profit from price differences. A trade that exploits price discrepancies of identical or similar financial instruments across different venues.
Bear A trader who expects prices to decline; one who takes short positions anticipating downward price movement.
Bear Market A market characterized by declining prices, typically defined as a decline of 20% or more from recent highs.
Broker An individual or firm that executes transactions between buyers and sellers for a commission. Types include:
- Floor Broker: Executes orders on the trading floor of an exchange
- Account Executive/Associated Person: Handles customer relationships in brokerage firms
- Futures Commission Merchant (FCM): The brokerage firm itself
Bull A trader who expects prices to rise; one who takes long positions anticipating upward price movement.
Bull Market A market characterized by rising prices, typically defined as an increase of 20% or more from recent lows.
Day Trader A speculator who opens and closes positions within the same trading day, ending each session with no overnight positions (flat).
Hedger An individual or company that uses futures or options markets to offset price risk in their cash market positions. Hedgers seek to protect against adverse price movements rather than speculate for profit.
Speculator A trader who accepts price risk in pursuit of profit, without underlying commercial interest in the physical commodity or asset.
Order Types & Execution
Ask (Offer) The price at which a seller is willing to sell; the offer price.
Bid The price at which a buyer is willing to buy; the purchase price.
Day Order An order that expires automatically at the end of the trading session if not executed.
Good Till Canceled (GTC) An order that remains active until either filled or explicitly canceled by the trader.
Limit Order An order specifying the maximum price willing to be paid (buy limit) or minimum price willing to accept (sell limit). Guarantees price if filled but not guarantee of execution.
Market Order (MKT) An order to buy or sell immediately at the best available current price. Guarantees execution but not price.
Market-If-Touched Order (MIT) A conditional order that becomes a market order once a specified price is reached.
Stop Order (Stop Loss) An order that becomes a market order when a specified price (stop price) is reached. Used to limit losses or protect profits on existing positions.
Stop Limit Order A stop order that, once triggered, becomes a limit order rather than a market order. Provides price protection but may not fill if market moves through the limit price.
Position & Contract Terms
Cash Commodity (Actuals) The physical commodity underlying a futures contract (e.g., corn, gold, crude oil) or the physical financial instrument (e.g., Treasury bonds).
Contract A standardized agreement to buy or sell a specific quantity of a commodity or financial instrument at a predetermined price on a future date.
Deliverable Grades (Contract Grades) The standard specifications for quality, grade, and location acceptable for delivery against a futures contract, as defined by the exchange.
Delivery The transfer of the physical commodity or cash settlement that fulfills a futures contract obligation.
Delivery Month (Contract Month, Front Month) The specific month in which delivery may occur under the terms of a futures contract.
First Notice Day The first day on which notice of intent to deliver against a futures contract can be issued by the clearinghouse.
Last Trading Day The final day on which trading is permitted in a specific futures contract month.
Long A position established by buying; one who owns a futures contract or security and will profit from price increases.
Long Hedge Buying futures contracts to protect against rising prices of a commodity to be purchased later in the cash market.
Offset Closing a position by taking an equal and opposite transaction (selling if you're long, buying if you're short).
Position A market commitment; ownership of or obligation under a futures or securities contract.
Short A position established by selling; one who has sold a futures contract or security and will profit from price decreases.
Spread The price difference between two related markets, contracts, or instruments. Also refers to the simultaneous purchase and sale of related contracts to profit from changing price relationships.
Price & Valuation Terms
Basis The difference between the cash price and futures price of the same commodity. Calculated as: Basis = Cash Price - Futures Price.
Carrying Charge The cost of storing and financing a physical commodity, including storage fees, insurance, and interest charges.
Mark-to-Market The daily settlement process that adjusts account balances to reflect current market values of open positions, with profits credited and losses debited daily.
Price Discovery The process by which markets determine current and future prices through the interaction of buyers and sellers.
Settlement Price The official closing price determined by the exchange for the day, used for mark-to-market calculations and establishing next day's trading limits.
Spot (Cash) Market The market for immediate delivery and payment of the physical commodity or asset.
Tick The minimum price increment in which a contract can trade, as defined by the exchange.
Trading Limit The maximum price movement permitted during a single trading day for a futures contract, as set by the exchange.
Margin & Risk Management
Initial Margin (Initial Performance Bond) The minimum deposit required to open a new position or add to existing positions. Set by brokers and exchanges based on market volatility and contract specifications.
Leverage The ability to control large positions with relatively small amounts of capital, amplifying both potential profits and losses.
Maintenance Margin (Maintenance Performance Bond) The minimum account equity required to maintain open positions. If equity falls below this level, a margin call is issued.
Margin Call A demand to deposit additional funds or reduce positions when account equity falls below maintenance margin requirements.
Performance Bond (Margin) Funds deposited to ensure fulfillment of contract obligations. Modern terminology replacing "margin" to emphasize that it's not a down payment but a good-faith deposit.
Market Structure & Venues
Cash Market The physical or spot market where actual commodities or securities are bought and sold for immediate or near-immediate delivery.
Commodity An article of commerce or product that can be traded, including agricultural products, metals, energy products, currencies, and financial instruments.
Futures Exchange A centralized, regulated marketplace with established rules where standardized futures and options contracts are traded.
Pit (Ring) A designated trading area on an exchange floor where open outcry trading occurs for specific contracts.
Forward Contract A privately negotiated, non-standardized agreement to buy or sell an asset at a specified future date and price. Unlike futures, forwards are not exchange-traded.
Futures Contract A standardized, exchange-traded agreement to buy or sell a specific quantity and quality of a commodity or financial instrument at a predetermined price and date.
Open Outcry The traditional method of public auction trading conducted face-to-face in trading pits through verbal bids and offers and hand signals.
Technical Analysis Terms
Chart Patterns & Price Action
Consolidation (Z-day) A period of sideways price movement within a defined range, typically indicating market indecision or equilibrium between buyers and sellers.
Support A price level where buying interest is strong enough to potentially halt or reverse a downtrend.
Resistance A price level where selling interest is strong enough to potentially halt or reverse an uptrend.
Trend The general direction of price movement over time. Can be classified as uptrend (higher highs and higher lows), downtrend (lower highs and lower lows), or sideways (range-bound).
Trendline (TL) A line drawn connecting significant price points (typically swing highs or lows) to visualize trend direction and potential support/resistance.
Technical Indicators
ATR (Average True Range) A volatility indicator measuring the average range between high and low prices over a specified period, accounting for gaps.
EMA (Exponential Moving Average) A moving average that gives greater weight to recent prices, making it more responsive to new information than a simple moving average.
MA (Moving Average) The average price of a security over a specified time period, used to smooth price data and identify trends.
MACD (Moving Average Convergence Divergence) A trend-following momentum indicator showing the relationship between two moving averages of price.
MFI (Money Flow Index) A momentum indicator incorporating volume, measuring buying and selling pressure on a 0-100 scale.
RSI (Relative Strength Index) A momentum oscillator measuring the speed and magnitude of price changes on a 0-100 scale, commonly used to identify overbought/oversold conditions.
Stochastic (Stoch) A momentum indicator comparing a closing price to its price range over a given time period.
VWAP (Volume Weighted Average Price) The average price weighted by volume, showing the true average price paid for a security during a specific period.
AVWAP (Anchored VWAP) VWAP calculated from a specific starting point in time (anchored to a significant event or price level) rather than the session open.
Volume Analysis
CVD (Cumulative Volume Delta) The running total of volume delta, showing the cumulative difference between buying and selling volume over time.
Volume Delta (VD) The difference between buying volume and selling volume within a given period, indicating net buying or selling pressure.
Volume Profile (VP) A charting tool displaying traded volume across different price levels for a specified time period, revealing areas of high and low trading activity.
Volume Spread Analysis (VSA) A methodology analyzing the relationship between price, volume, and spread (range) to understand supply and demand dynamics.
Volume Price Analysis (VPA) Analysis examining the relationship between volume and price movement to assess the strength or weakness of price trends.
Value Area (VA) In volume profile analysis, the price range containing a specified percentage (typically 70%) of the session's total volume.
Value Area High (VAH) The upper boundary of the value area in volume profile analysis.
Value Area Low (VAL) The lower boundary of the value area in volume profile analysis.
POC (Point of Control) The price level with the highest traded volume within a specified period in volume profile analysis.
Position Management Terms
Entry & Exit Terminology
BE (Break-Even) The price point at which a trade neither makes nor loses money (excluding commissions and fees).
Entry The price point or level at which a position is initiated.
Exit The price point or level at which a position is closed.
Scalp A trading style focusing on small, quick profits from minor price movements, typically holding positions for very short durations (seconds to minutes).
TP (Take Profit) A predetermined price level at which a profitable position will be closed to secure gains.
SL (Stop Loss) A predetermined price level at which a losing position will be closed to limit further losses.
Risk Management Terms
DD (Drawdown) The peak-to-trough decline in account equity, typically expressed as a percentage of the peak value.
Leverage The use of borrowed capital or financial instruments to increase potential return on investment, while also increasing risk.
Position Sizing The process of determining the appropriate quantity or dollar amount to risk on each trade based on account size, risk tolerance, and trade setup.
R:R (Risk-to-Reward Ratio) The ratio comparing the potential loss (risk) to potential gain (reward) in a trade. For example, 1:3 means risking $1 to potentially gain $3.
Risk Management The systematic process of identifying, assessing, and controlling threats to capital, including position sizing, stop-loss placement, and portfolio diversification.
Market Sessions & Time Zones
Time Zone Abbreviations
EST (Eastern Standard Time) UTC-5; US Eastern Time during winter months.
EDT (Eastern Daylight Time) UTC-4; US Eastern Time during daylight saving time.
ET (Eastern Time) General reference to US Eastern Time (New York time), without specifying standard or daylight time.
BST (British Summer Time) UTC+1; UK time during daylight saving time.
GMT (Greenwich Mean Time) UTC+0; UK time during winter months; often used interchangeably with UTC.
JST (Japanese Standard Time) UTC+9; Japan does not observe daylight saving time.
UTC (Coordinated Universal Time) The primary time standard by which the world regulates clocks and time; not affected by daylight saving time changes.
Session References
Asian Session Trading period when Asian markets (Tokyo, Hong Kong, Singapore, Sydney) are most active, typically 6:00 PM - 4:00 AM ET.
European Session (London Session) Trading period when European markets are most active, typically 3:00 AM - 12:00 PM ET.
LO (London Open) Market open for London trading session, typically 3:00 AM ET.
LC (London Close) Market close for London trading session, typically 12:00 PM ET.
NYO (New York Open) Market open for New York trading session, typically 9:30 AM ET for equities.
CME Chicago Mercantile Exchange; also used to reference bond market open at 8:20 AM ET.
Previous Period References
PD (Previous Day) The most recently completed trading day.
PDH (Previous Day High) The highest price reached during the previous trading day.
PDL (Previous Day Low) The lowest price reached during the previous trading day.
PWH (Previous Week High) The highest price reached during the previous trading week.
PWL (Previous Week Low) The lowest price reached during the previous trading week.
HOD (High of the Day) The highest price reached during the current trading day.
LOD (Low of the Day) The lowest price reached during the current trading day.
HOW (High of the Week) The highest price reached during the current trading week.
LOW (Low of the Week) The lowest price reached during the current trading week.
Currency Pair Abbreviations
AU / Aussie AUD/USD (Australian Dollar / US Dollar)
Cable GBP/USD (British Pound / US Dollar) - name derived from transatlantic cable used for rate transmission in 1800s
Caddie USD/CAD (US Dollar / Canadian Dollar)
EG EUR/GBP (Euro / British Pound)
EJ EUR/JPY (Euro / Japanese Yen)
EU / Fiber EUR/USD (Euro / US Dollar)
GJ GBP/JPY (British Pound / Japanese Yen) - also called "Guppy"
GU GBP/USD (British Pound / US Dollar)
Kiwi NZD/USD (New Zealand Dollar / US Dollar)
Swissy USD/CHF (US Dollar / Swiss Franc)
UJ USD/JPY (US Dollar / Japanese Yen)
Central Banks & Financial Institutions
BdeM Bank of Mexico (Banco de México)
BOC Bank of Canada
BOE Bank of England
BOJ Bank of Japan
ECB European Central Bank
Fed / FRS Federal Reserve System - the central bank of the United States
HKMA Hong Kong Monetary Authority
MAS Monetary Authority of Singapore
NY Fed Federal Reserve Bank of New York
PBOC People's Bank of China
RBA Reserve Bank of Australia
RBNZ Reserve Bank of New Zealand
SNB Swiss National Bank
Regulatory Bodies & Financial Terms
BFI Banks & Financial Institutions
CFTC Commodity Futures Trading Commission - US regulatory agency overseeing futures and options markets
COT (Commitment of Traders) A weekly report published by the CFTC showing aggregate positions of different trader categories in futures markets
CRB Commodity Research Bureau - produces commodity price indices
NFP (Non-Farm Payroll) Monthly US employment report, one of the most significant economic indicators for financial markets
Wall Street The financial district in Lower Manhattan, New York; often used to refer to US financial markets generally
Bunds German government debt instruments
Gilts British government debt instruments (UK government bonds)
Treasuries US government debt instruments (bonds, notes, bills)
Price Calculation Methods
HL2 (High + Low) / 2 - midpoint of the high and low
HLC3 (High + Low + Close) / 3 - average of high, low, and close
OHLC Open, High, Low, Close - the four primary price points for a given period
OHLC4 (Open + High + Low + Close) / 4 - average of all four price points
OP (Opening Price) The first traded price of a given period
Market Structure Terms
Standard Price Action Terms
HH (Higher High) A swing high that exceeds the previous swing high, characteristic of an uptrend.
HL (Higher Low) A swing low that is higher than the previous swing low, characteristic of an uptrend.
LH (Lower High) A swing high that fails to exceed the previous swing high, characteristic of a downtrend.
LL (Lower Low) A swing low that breaks below the previous swing low, characteristic of a downtrend.
EQH (Equal Highs) Two or more swing highs occurring at approximately the same price level.
EQL (Equal Lows) Two or more swing lows occurring at approximately the same price level.
LTH (Long-Term High) A significant high on higher timeframes representing a major resistance level.
LTL (Long-Term Low) A significant low on higher timeframes representing a major support level.
STH (Short-Term High) A relative high on lower timeframes or within a shorter time period.
STL (Short-Term Low) A relative low on lower timeframes or within a shorter time period.
MS (Market Structure) The arrangement of swing highs and lows that defines trend direction and key levels.
BOS (Break of Structure) When price breaks through a significant swing high (in uptrend) or swing low (in downtrend), confirming trend continuation.
CHoCH (Change of Character) When price breaks counter-trend structure, potentially signaling a trend reversal or significant pullback.
Methodology-Specific Terms (ICT/SMC)
The following terms are specific to Inner Circle Trader (ICT) and Smart Money Concepts (SMC) methodologies. These are retail trading frameworks and interpretations, not universally recognized industry standards. See our trading myths guide in our academy for critical analysis of these concepts.
ICT/SMC Acronyms & Concepts
ICT Inner Circle Trader - trading methodology developed by Michael J. Huddleston
SMC Smart Money Concepts - retail trading framework based on the premise of following "institutional" footprints
IPDA Interbank Price Delivery Algorithm - ICT concept suggesting predetermined price delivery mechanisms
PD Array (Price Delivery Array) ICT term for various price action structures: highs/lows, order blocks, breaker blocks, mitigation blocks, fair value gaps, volume imbalances
OB (Order Block) ICT/SMC term for the last opposing candle before a strong directional move, interpreted as institutional order placement zone
FVG (Fair Value Gap) ICT/SMC term for a three-candle pattern with a gap between the first and third candle's wicks, interpreted as inefficient price delivery
BB (Breaker Block) ICT/SMC term for an order block that failed and reversed, now expected to act as the opposite type of zone
MB (Mitigation Block) ICT/SMC term for a specific type of order block in ICT methodology
IMB (Imbalance) / INF (Inefficiency) ICT/SMC terms for areas where price moved quickly with gaps, expected to be "filled"
BPR (Balanced Price Range) ICT term for the overlap between bullish and bearish FVGs, interpreted as rebalanced inefficiency
CE (Consequent Encroachment) ICT term for the 50% level of a fair value gap
IDM (Inducement) ICT/SMC concept of price movements designed to trap retail traders before reversing
BSL (Buy Side Liquidity) ICT/SMC term for stop-losses above highs, interpreted as institutional targets
SSL (Sell Side Liquidity) ICT/SMC term for stop-losses below lows, interpreted as institutional targets
ERL (External Range Liquidity) ICT/SMC term for liquidity outside current price ranges
IRL (Internal Range Liquidity) ICT/SMC term for liquidity within current price ranges
LP / LQ / LQD (Liquidity Pool) ICT/SMC term for areas where stop-loss orders are assumed to cluster
OTE (Optimal Trade Entry) ICT term for 61.8-78.6% Fibonacci retracement zone, considered optimal entry
KZ (Kill Zone) ICT term for specific time windows during trading day considered most important
A-KZ (Asian Kill Zone) ICT-specific time window during Asian trading session
PO3 (Power of Three) ICT concept describing accumulation, manipulation, and distribution phases
AMD Accumulation, Manipulation, Distribution - ICT/SMC market cycle interpretation
MMBM (Market Maker Buy Model) ICT/SMC template for bullish setups
MMSM (Market Maker Sell Model) ICT/SMC template for bearish setups
SMT (Smart Money Technique/Trap) ICT/SMC concept of divergence between correlated pairs, or market moves designed to trap traders
WDYS (What Do You See) ICT teaching method encouraging pattern recognition practice
Additional ICT/SMC Terms
iBOS / mBOS (Internal/Minor Break of Structure) ICT/SMC term for break of structure on lower timeframes
iCHoCH / mCHoCH (Internal/Minor Change of Character) ICT/SMC term for change of character on lower timeframes
BISI (Buy Side Imbalance Sell Side Inefficiency) ICT/SMC term combining imbalance and inefficiency concepts
SIBI (Sell Side Imbalance Buy Side Inefficiency) ICT/SMC term for opposite imbalance/inefficiency relationship
SH (Stop Hunt) ICT/SMC interpretation of price movements designed to trigger stops (note: also means Swing High in standard terminology)
FBOS (Fake Break of Structure) ICT/SMC term for a break of structure that quickly reverses, interpreted as manipulation
BMS (Break in Market Structure) ICT/SMC variant term for break of structure
SMS (Shift in Market Structure) ICT/SMC term for significant market structure changes
RBD / RBR / DBD / DBR ICT/SMC pattern terminology: Rally-Base-Drop, Rally-Base-Rally, Drop-Base-Drop, Drop-Base-Rally
PB (Propulsion Block) ICT/SMC term for an order block within another order block
RJ (Rejection Block) ICT/SMC term for a block showing strong rejection
IFC (Institutional Funding Candle) ICT/SMC term for large candles interpreted as institutional positioning
IOF (Institutional Order Flow) ICT/SMC term for interpreted institutional activity
IOFED (Institutional Order Flow Entry Drill) ICT/SMC practice method for entry techniques
BLT (Bank Level Trading) ICT/SMC term suggesting trading like banks (see myths guide for reality)
MMP (Market-Maker Profile) ICT/SMC framework for understanding market maker activity
AD (Accumulation and/or Distribution) ICT/SMC terms for phases of institutional positioning
S&D / SnD (Supply & Demand) Trading methodology focusing on supply and demand zones
RE (Risk Entry) ICT/SMC term for higher-risk entry point
DCE (Double Confirmation Entry) ICT/SMC term requiring multiple confirmations
OSOK (One Shot One Kill) ICT/SMC phrase emphasizing high-probability setups with single entries
LVG (Liquidity Void Gap) ICT/SMC term for price gaps representing liquidity voids
MTH (Mean Threshold) ICT/SMC term for 50% level of an order block
FLOR (First Level of Respect) ICT/SMC term for initial reaction to a key level
LOR (Level of Respect) ICT/SMC term for price levels showing historical reactions
KSR (Key Support and Resistance) Standard term for major support and resistance levels
General Trading Abbreviations
AOI / POI / ZOI Area of Interest / Point of Interest / Zone of Interest - price zones marked for potential trade setups
CT (Counter Trend) Trading against the prevailing trend
HTF (Higher Timeframe) A larger timeframe relative to the one being analyzed (e.g., daily when analyzing 4-hour)
LTF (Lower Timeframe) A smaller timeframe relative to the one being analyzed (e.g., 15-minute when analyzing 1-hour)
MTF (Multi Timeframe) Analysis incorporating multiple different timeframes
PA (Price Action) The movement of price over time, typically analyzed through candlestick patterns and price structure
TA (Technical Analysis) Analysis of price charts, patterns, indicators, and volume to forecast future price movements
TF (Timeframe) The duration represented by each candle or bar on a chart (e.g., 1-minute, 5-minute, 1-hour, daily)
Fib Fibonacci tool or Fibonacci level - price retracement or extension levels based on Fibonacci ratios
RN (Round Numbers) Price levels ending in 00, 50, or other psychologically significant numbers where orders tend to cluster
OF (Order Flow) The process of buy and sell orders being executed, revealing supply and demand dynamics
MF (Market Flow) The overall direction and character of market movement
EQ (Equilibrium) A balanced price level, often the midpoint of a range, where supply and demand are temporarily balanced
IPA (Inefficient Price Action) Price movement characterized by gaps, large candles, or low volume, suggesting potential revisiting
ADR (Average Daily Range) The average difference between daily high and low over a specified period, used for volatility assessment
RTO (Return to Origin) Price returning to the starting point of a significant move or to an order block
DR (Defining Range) A price range that establishes key levels for future price action
ODR (Overnight Defining Range) Range established during overnight trading session
RDR (Regular Defining Range) Range established during regular trading hours
CBDR (Central Bank Dealer Range) ICT/SMC term for specific time window range around London open
EPA (Estimated Price at Arrival) Projected price level at a future point in time
ETA (Estimated Time of Arrival) Projected time to reach a specific price level
SOS (Sign of Strength) Price action indicating buying pressure and potential upward continuation
SOW (Sign of Weakness) Price action indicating selling pressure and potential downward continuation
S2D (Supply to Demand) Transition from a supply zone to a demand zone
D2S (Demand to Supply) Transition from a demand zone to a supply zone
PSLO (Protective Stop-Loss Order) Stop-loss order placed to protect capital or lock in profits
TS (Turtle Soup) A trading pattern based on failed breakout attempts
MMA (Major Market Analysis) Comprehensive analysis of major market trends and factors
HRLR (High Resistance Liquidity Run) ICT/SMC term for liquidity sweep in high-resistance area
LRLR (Low Resistance Liquidity Run) ICT/SMC term for liquidity sweep in low-resistance area
AlgoStorm™ Proprietary Terms
The following terms are specific to AlgoStorm™ indicators and tools, representing proprietary analysis methods.
AMC (AlgoStorm™ Advanced Market Compass) Proprietary market direction and trend analysis tool
AMO (AlgoStorm™ Advanced Momentum Oscillator) Proprietary momentum measurement indicator
EMC (AlgoStorm™ Essential Market Compass) Simplified version of market direction tool
VDB (AlgoStorm™ Volume Delta Bars) Proprietary volume delta visualization similar to periodic volume delta
VDC (AlgoStorm™ Volume Delta Candles) Proprietary candlestick representation incorporating volume delta
VDT (AlgoStorm™ Volume Delta Thrust) Proprietary indicator measuring volume delta momentum
PVD (Periodic Volume Delta) Volume delta calculation over specified time periods
VOF (VWAP-Based Order Flow Framework) AlgoStorm™ framework combining VWAP with order flow analysis
VAB (Value Area Breakout Framework) AlgoStorm™ methodology for trading value area breakouts
STPO (Session Time Price Opportunity) AlgoStorm™ term for time-based price opportunities within trading sessions
HSI (Horizontal Stacked Imbalances) AlgoStorm™ term for multiple imbalances at similar price levels
VSI (Vertical Stacked Imbalances) AlgoStorm™ term for consecutive imbalances across different price levels
Additional Terms
EOF (Expectational Order Flow) Order flow based on market expectations rather than actual executed orders
Hedgies Informal term for hedge funds
OI (Open Interest) The total number of outstanding futures or options contracts that have not been settled
Managed Futures An asset class where professional commodity trading advisors (CTAs) manage client assets using global futures markets
Liquid A market characteristic where large transactions can occur without significantly affecting price, due to high trading volume and numerous participants
Scalability The ability of a trading strategy to maintain performance as position size increases
Back Month (Far Month) Futures contract months beyond the front month, with later expiration dates
Nearby Month The futures contract month closest to expiration with active trading
Deferred Month Contract months further in the future, as distinguished from the nearby month
Delivery Points Exchange-designated locations and facilities where physical commodity delivery can occur
Forex Futures (FX Futures) Exchange-traded standardized currency futures contracts
Forward (Cash) Contract Privately negotiated agreement for future delivery, unlike standardized futures contracts
Liquidation Closing out an existing position through an offsetting transaction
Spreading Simultaneously buying and selling related futures contracts to profit from changing price relationships
Additional Resources
For additional trading terminology, consult these comprehensive resources:
- Investopedia Dictionary - Comprehensive financial terms
- CME Group Glossary - Exchange-standard terminology
- BabyPips Forex Dictionary - Forex-specific terms
- BabyPips Crypto Dictionary - Cryptocurrency terms
- CFTC Glossary - Regulatory terminology
Using This Glossary
For New Traders: Focus first on the "Standard Market & Trading Terms" section to build a foundation in industry-standard terminology. This knowledge is essential regardless of which trading approach you eventually adopt.
For Experienced Traders: Use this glossary as a reference for methodology-specific terms and to understand the language used in various trading communities.
Critical Thinking: Remember that methodology-specific terms (particularly those from ICT/SMC) represent interpretations of market behavior rather than universally accepted market mechanics. Check the trading myths guide in the appendices of this academy for evidence-based analysis of common trading concepts.
Context Matters: Some abbreviations have different meanings depending on context (e.g., "SH" can mean Stop Hunt or Swing High, "OB" can mean Order Block or Overbought). Always consider the context in which terms are used.
When learning trading terminology, prioritize understanding industry-standard terms used by professional traders, exchanges, and regulatory bodies. These form the foundation of market literacy and enable effective communication across the broader trading community.