Trading Glossary

18 CONCEPTS

Every concept explained in plain English, with why it matters and a worked NQ example. No jargon walls. Deeper dives live in the free Academy.

Fair Value Gap (FVG)

A three-candle imbalance where price moved so fast it left a gap between the first candle's high and the third candle's low.

A quick push through an obvious high or low that triggers resting stops, immediately followed by a reversal back through the level.

An impulsive, high-energy move: a candle or series of candles far larger than recent ranges, often read as a sign of institutional participation.

The last opposite-direction candle before a strong displacement move, read as a zone where institutions built positions.

The pool of buy stops resting above obvious highs, which liquidity-based traders treat as a draw on price.

The pool of sell stops resting below obvious lows, the mirror image of buy-side liquidity.

The 62% to 79% retracement zone of an impulsive leg, where a trader enters the pullback instead of chasing the move.

The moment price breaks its pattern of higher-lows or lower-highs, signaling a possible trend change.

Two or more swing points at nearly the same price, read as a concentrated liquidity pool and a common draw for price.

Where price sits within a range: above the midpoint is premium (favoring sells), below is discount (favoring buys).

A deliberate push into a stop-loss cluster to trigger forced orders before the real move begins.

What one full point of movement is worth per contract: $20 on NQ, $2 on MNQ.

Profit or loss measured in units of your initial risk, so every trade is scored on the same scale.

Moving your stop loss to your entry price once a trade has moved in your favor, so the worst case becomes roughly a scratch.

The prop-firm loss limit that follows your equity peak instead of staying fixed at your starting balance.

Volume-Weighted Average Price: the session's average price weighted by volume, and an institutional benchmark.

The three times of day when futures liquidity and volatility change character, and why the clock belongs in your journal.

A set window of the trading day, such as 9:30 to 11:00am ET, that a trader limits their entries to.