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Trading glossary

Structure words

57 words, each explained first as you would tell a ten-year-old.

1. above-average volumeMore trading than usual in a candle, compared with the average of recent candles. It shows many people joined the move.
2. bounceWhen price drops to a level and then jumps back up, like a ball hitting the floor.
3. break of structureWhen price breaks the pattern of steps it was making, like a climb falling below its last dip, a sign the climb may be ending.
4. breakaway gapA jump in price that leaves an empty space on the chart as price leaves a sideways zone, often with lots of trading.
5. breakdownWhen price falls through a floor it had been staying above.
6. breakoutWhen price pushes out of a box it was stuck in, going above a ceiling or below a floor.
7. broken levelA floor or ceiling that price has already pushed through. Price often comes back to test it from the other side.
8. channelTwo lines side by side that price bounces between as it moves up, down or sideways.
9. choppy marketA market that jumps back and forth sideways without going anywhere, so many signals turn out wrong.
10. common gapA small jump in price inside a sideways stretch that often gets filled back in soon.
11. daily chartA chart where each candle shows one whole day of trading.
12. downtrendWhen price keeps making lower tops and lower bottoms, like walking down a staircase.
13. exhaustion gapA last big jump near the end of a long move, when the move is running out of energy and often turns back.
14. false breakoutWhen price pops out of a box but quickly falls back inside, fooling people who jumped in.
15. follow-throughWhen price keeps moving the same way after a signal, showing the move is real.
16. gapAn empty space on a chart where price jumped from one candle to the next without trading in between.
17. gap downWhen price opens and stays below the last candle's lowest price, leaving an empty space on the chart.
18. gap fillWhen price comes back and trades through the empty space it left on the chart.
19. gap upWhen price opens and stays above the last candle's highest price, leaving an empty space on the chart.
20. higher highA top that is higher than the last top, one of the steps that shows prices are climbing.
21. higher lowA dip that stops higher than the last dip, one of the steps that shows prices are climbing.
22. hourly chartA chart where each candle shows one hour of trading.
23. intradayHappening within a single trading day.
24. key levelAn important price where buyers or sellers stepped in before, so price may react there again.
25. lower highA top that is lower than the last top, one of the steps that shows prices are falling.
26. lower lowA dip that goes deeper than the last dip, one of the steps that shows prices are falling.
27. market structureThe pattern of tops and bottoms on a chart that shows whether price is climbing, falling or moving sideways.
28. noiseSmall, random wiggles in price that do not mean much, like static on a radio.
29. participationHow many people joined a price move. More people trading makes a move more believable.
30. pullbackA short move against the main direction, like a small dip during a climb, before the climb often carries on.
31. range highThe top of a sideways stretch, where price kept turning down.
32. range lowThe bottom of a sideways stretch, where price kept turning up.
33. resistanceA price ceiling where sellers keep stepping in, so price often stops rising and turns back down.
34. retestWhen price comes back to a level it just broke through, to check if the old ceiling now works as a floor.
35. reversalWhen price stops going one way and starts going the other way for a while.
36. role reversalWhen an old ceiling, once broken, becomes a floor, or an old floor becomes a ceiling.
37. round numberAn easy, even price like 100 or 20,000, where lots of people like to buy or sell.
38. runaway gapA jump in price in the middle of a strong move, a sign the move still has plenty of energy.
39. sideways marketWhen price moves back and forth between a floor and a ceiling without going clearly up or down.
40. slopeHow steep a line on the chart is, going up, down or flat.
41. supportA price floor where buyers keep stepping in, so price often stops falling and bounces up.
42. swingOne move of price from a low point up to a high point, or back down again.
43. swing highA peak on the chart where price turned down, higher than the candles on both sides of it.
44. swing lowA dip on the chart where price turned up, lower than the candles on both sides of it.
45. swing pointA turning point on the chart, either a peak or a dip, where price changed direction.
46. tick volumeA rough count of how many times the price changed, used instead of real trading amounts in currency charts.
47. timeframeHow much time each candle on a chart shows, like one hour, one day or one week.
48. touchWhen price reaches a line or level on the chart, even for a moment.
49. trapA move that tricks traders into jumping in, then turns hard against them.
50. trendThe main direction price is moving over time: up, down or sideways.
51. trendlineA straight line drawn along the dips of a climb, or the peaks of a fall, to show the direction and speed of the move.
52. uptrendWhen price keeps making higher tops and higher bottoms, like walking up a staircase.
53. volumeHow much of something was bought and sold during a candle's time. More volume means more people joined in.
54. volume barA small bar under each candle showing how much trading happened then.
55. volume spikeA sudden jump in trading, shown by a bar much taller than the ones before it.
56. weekly chartA chart where each candle shows one whole week of trading.
57. zoneA band of prices, not one exact price, where buyers or sellers tend to act.