139+ Trading Terms Explained

A break-even stop is moving your stop-loss order to your exact entry price once a trade has moved sufficiently in your favor — it turns a ri

A drawdown is the peak-to-trough decline in account equity — it measures how far you've fallen from your high-water mark, either from a sing

Maximum daily loss (max daily loss) is a self-imposed rule — or a broker/prop firm imposed rule — that automatically stops your trading for

The former Pattern Day Trader rule — an SEC/FINRA regulation that required retail traders to maintain at least $25,000 in a margin account t

Position size is the number of shares, contracts, or dollar value you deploy in a single trade — determined by the relationship between your

A profit target is a predetermined exit price where you plan to close a winning trade and lock in gains — defined before you enter the posit

Risk per trade is the maximum dollar amount you're willing to lose on a single position if your stop is hit — typically expressed as a perce

The risk-reward ratio compares the potential profit of a trade to the maximum loss if the stop is hit — a 3:1 risk-reward means you stand to

A trading plan is a written document that defines your strategy, the specific setups you trade, entry and exit rules, risk management parame