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Every term explained in plain English. No jargon, no confusion—just clear definitions you can actually use.
A phase where smart money or institutional investors are quietly building positions, often characterized by sideways price action with increasing volume. Precedes markup phases in market cycles.
Trading that occurs after the regular market close (4:00 PM - 8:00 PM ET for US markets). Like pre-market, after-hours trading has lower liquidity and wider spreads. Earnings announcements released after market close can cause significant after-hours moves.
The highest price an asset has ever reached. When something hits ATH, it means there's no historical resistance above—uncharted territory.
Over-analyzing to the point of inaction. The trader sees so many variables and scenarios that they become unable to make a decision and miss opportunities.
A cognitive bias where people fixate on a reference point (anchor) when making decisions. Traders often anchor to entry prices, leading to irrational holding of losers or premature selling of winners.
Adding to a losing position to lower your average cost per share. While this can work if the stock recovers, it's dangerous because you're increasing exposure to a trade that's already going against you. Many traders consider averaging down a bad habit that amplifies losses.
A measure of how much an asset typically moves in a day. Higher ATR = more volatile. Useful for setting stop losses that give the trade room to breathe.
A trader stuck holding a losing position, often after refusing to cut losses. The \"bag\" refers to the worthless (or heavily depreciated) shares they're left holding.
Expecting prices to go down. A bearish trader thinks the market or asset will fall. Opposite of bullish.
The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). Wider spreads indicate lower liquidity and higher trading costs.
When price moves above resistance or below support with conviction. Real breakouts come with volume; fake ones (fakeouts) don't.
Expecting prices to go up. A bullish trader thinks the market or asset will rise. Opposite of bearish.
An event that causes a significant price move. Catalysts include earnings reports, FDA decisions, product launches, management changes, or acquisition announcements. Momentum traders often position ahead of expected catalysts or trade the reaction to unexpected ones.
A market condition characterized by rapid, unpredictable price swings without clear direction. Trend-following strategies often struggle in choppy conditions as moves reverse quickly.
The tendency to seek out and favor information that confirms existing beliefs while ignoring contradictory evidence. A major psychological pitfall in trading.
A period where price moves sideways in a range, neither trending up nor down. Often precedes a breakout. Think of it as the market catching its breath.
A temporary price decline of 10-20% from recent highs. Not a crash—more like a healthy pullback that shakes out weak hands before resuming the trend.
A bullish continuation pattern resembling a teacup. The cup forms as price rounds from high to low and back to high. The handle is a small pullback before breakout. Often precedes significant moves.
A trading style where positions are opened and closed within the same trading day—no overnight holds. Day traders aim to profit from intraday price movements and must manage the Pattern Day Trader rule ($25,000 minimum account) in the US. Requires full-time attention during market hours.
A brief price recovery during a downtrend that fools people into thinking the bottom is in. Named because even a dead cat bounces if dropped from high enough. Brutal, but accurate.
Financial services built on blockchain technology that operate without traditional intermediaries like banks. Includes lending, borrowing, trading, and yield farming protocols.
Slang for holding a position through extreme volatility without selling. Can be disciplined conviction or stubborn bagholding depending on context and outcome.
The strategy of purchasing assets after a price decline, expecting a bounce or continuation of an uptrend. \"Buy the dip\" is a common mantra in bull markets.
The opposite of accumulation—a phase where large holders are selling their positions to retail buyers. Often occurs at market tops with high volume but limited price appreciation.
When price moves one direction but an indicator moves the opposite way. Often signals a trend reversal is coming. Example: price makes new highs but RSI makes lower highs.
The 1-5% price appreciation phase at the beginning of a larger move, before mainstream attention drives the bulk of gains. Getting in during this zone offers better risk-reward than chasing extended moves.
The price at which you open a position. Good entries give you a favorable risk-reward ratio—close to support with a clear stop loss level.
The number of shares available for public trading—total shares outstanding minus restricted shares (held by insiders, institutions under lock-up, etc.). Low-float stocks can move dramatically on relatively small volume, making them popular for momentum traders but also more volatile and risky.
Fear Of Missing Out. The emotional urge to buy something because it's already up and you don't want to miss the move. Usually leads to buying tops.
Fear, Uncertainty, and Doubt. Negative news or sentiment (real or manufactured) that causes panic selling. Often spread intentionally to shake out weak hands.
When price opens significantly higher or lower than the previous close, leaving empty space on the chart. Gaps often get "filled" as price returns to that level.
A momentum strategy focused on stocks that gap up at the open and continue moving higher. Traders enter early in the session expecting continuation of the gap direction.
A bullish chart pattern where a stock gains 100%+ in 4-8 weeks, then consolidates sideways for 3-5 weeks with minimal pullback (<20-25%). One of the strongest continuation patterns.
Internet slang for "hold"—originated from a typo. Means holding an asset long-term regardless of price swings. Popular in crypto culture.
A ranked list of trading opportunities ordered by signal strength or potential. Unlike traditional screeners that return unordered matches, leaderboards prioritize and rank results.
An order to buy or sell at a specific price or better. Buy limits execute at the limit price or lower; sell limits execute at the limit price or higher. Guarantees price but not execution—your order may never fill if the price doesn't reach your limit.
How easily you can buy or sell without significantly moving the price. High liquidity = tight spreads, easy entries/exits. Low liquidity = slippage and getting stuck.
The psychological principle that losses feel roughly twice as painful as equivalent gains feel good. This causes traders to hold losers too long and cut winners too short.
Market capitalization—the total value of a company's outstanding shares (share price × shares outstanding). Large-cap ($10B+) stocks are generally more stable; small-cap ($300M-$2B) and micro-cap (under $300M) stocks are more volatile and potentially faster-moving.
An order to buy or sell immediately at the best available current price. Market orders guarantee execution but not price—in fast-moving markets, you may get filled at a worse price than expected (slippage). Use with caution in low-liquidity stocks.
A theory that asset prices tend to return to their average over time. Mean reversion traders buy oversold assets expecting a bounce and sell overbought assets expecting a pullback.
An early indicator that an asset is gaining attention and price strength before it becomes widely discussed.
The average price over a period (e.g., 50-day or 200-day). Acts as dynamic support/resistance. When price crosses above, often bullish; below, often bearish.
A trading signal derived from combining multiple data types—technical indicators, volume patterns, social sentiment, etc. More robust than single-factor signals because multiple confirmations reduce false positives.
The high and low established in the first 15-30 minutes of trading. Many traders use opening range breakouts as entry signals, assuming the first range sets the tone for the day.
When an asset has risen too fast and may be due for a pullback. Often measured by RSI above 70. Doesn't mean sell immediately—strong trends stay overbought for weeks.
When an asset has fallen too fast and may be due for a bounce. Often measured by RSI below 30. Can signal a buying opportunity, but falling knives can keep falling.
Someone who sells at the first sign of trouble. Opposite of diamond hands. Often used mockingly in trading communities.
Simulated trading with fake money to practice strategies without risking real capital. Essential for beginners to learn execution, develop systems, and build confidence. However, paper trading doesn't replicate the emotional pressure of real money at risk.
A FINRA designation for traders who execute 4 or more day trades within 5 business days in a margin account. PDT accounts require a minimum equity of $25,000. This rule was designed to protect inexperienced traders from excessive risk but creates a barrier to entry for day trading.
The process of determining how much capital to allocate to a single trade based on risk tolerance and conviction.
A longer-term trading approach where positions are held for weeks to months based on major trends or fundamentals. Less active than swing trading, more active than investing.
Trading that occurs before the regular market session (4:00 AM - 9:30 AM ET for US markets). Pre-market trading has lower volume and wider spreads but can establish directional bias for the regular session. Important earnings announcements often drop pre-market.
A temporary price decline during an uptrend. Smart traders wait for pullbacks to enter—buying dips rather than chasing highs.
The tendency to weight recent events more heavily than earlier ones when making decisions. In trading, this manifests as assuming recent trends will continue indefinitely.
A comparison of an asset's performance to a benchmark (usually an index). Assets with high relative strength are outperforming the market; those with low relative strength are lagging.
A momentum indicator measuring speed and magnitude of price changes on a 0-100 scale. Above 70 is overbought, below 30 is oversold. One of the most popular indicators.
Current volume compared to the average volume for the same time of day. RVOL of 2.0 means trading at twice normal volume. High relative volume often precedes or accompanies significant price moves and indicates unusual interest in the stock.
Impulsive trading after a loss, attempting to quickly recover the money. Often leads to larger losses due to emotional, non-systematic decision-making.
A 0-100 numerical score indicating how "ready" an asset is for potential momentum, combining technical patterns with social sentiment.
Market conditions where investors favor safe-haven assets like bonds, gold, and defensive stocks. Characterized by fear, falling prices in risky assets, and flights to safety.
Market conditions where investors favor riskier assets like stocks, especially growth stocks and crypto. Characterized by optimism, rising prices, and flows out of safe havens.
The relationship between potential loss (risk) and potential gain (reward) on a trade, expressed as a ratio.
A type of crypto scam where developers abandon a project and run away with investor funds, often after artificially inflating the token price.
Building a position gradually over multiple entries rather than committing full size at once. Reduces timing risk and allows for better average pricing.
Exiting a position gradually over multiple sales rather than selling all at once. Locks in some profits while maintaining upside exposure.
Ultra-short-term trading—holding positions for seconds to minutes, capturing tiny price movements repeatedly. Requires fast execution and low fees.
The movement of investment capital from one industry sector to another as economic conditions or market sentiment changes. Traders following sector rotation overweight leading sectors.
The process of measuring collective market mood through social media, news, and trading behavior.
The total number of shares currently sold short (borrowed and sold, betting on a price decline). High short interest can lead to short squeezes if the price rises, forcing short sellers to buy back shares and accelerating upward momentum.
A rapid price increase caused by short sellers being forced to buy back shares to cover their positions. As price rises, losses for shorts increase, triggering stop-outs and margin calls that create forced buying, which pushes price even higher. GameStop in January 2021 was a famous example.
A trading tool that combines multiple data sources and signal types into a unified view. Instead of checking technical charts, news, and social media separately, aggregators present a holistic picture.
The rate of change in a signal's strength over time. A signal gaining velocity is accelerating—showing stronger conviction. Used to distinguish emerging opportunities from stale signals.
The difference between your expected price and actual execution price. Happens in fast markets or low liquidity. Can eat into profits significantly.
The measured volume and velocity of social media mentions for a given asset across platforms like X (Twitter) and Reddit.
The rate of change in social media mentions and sentiment for a particular asset. Velocity measures acceleration—not just how much people are talking, but how quickly the conversation is growing.
A predetermined price at which you exit a losing position to limit potential losses.
Price levels where buying pressure (support) or selling pressure (resistance) historically causes prices to pause, reverse, or accelerate.
Holding positions for days to weeks, capturing "swings" in price. Less stressful than day trading, doesn't require watching screens all day.
A predetermined price at which you close a winning position. Having a take profit level prevents greed from turning winners into losers.
Recurring price and volume formations that historically precede predictable market movements.
Banana Farmer's ranked leaderboard showing assets with the highest Ripeness Scores. The top signals page displays the strongest momentum opportunities across 10,000+ tracked assets, updated continuously.
A record of all trades including entry/exit prices, reasons for the trade, and outcome. Reviewing your journal reveals patterns in your trading—what works, what doesn't, and where emotions override logic. Considered essential for improvement by most successful traders.
The general direction of price movement. "The trend is your friend"—trading with the trend is generally easier than fighting it.
A trading strategy that attempts to capture gains by riding sustained market trends. Trend followers enter in the direction of the trend and exit when it reverses. The saying \"the trend is your friend\" embodies this approach.
How much and how fast price moves. High volatility = big swings, more risk and opportunity. Low volatility = calm markets, smaller moves.
Examining trading volume (number of shares/coins traded) to confirm price movements and identify potential reversals.
Volume Weighted Average Price—the average price a stock has traded at throughout the day, weighted by volume. Institutional traders use VWAP as a benchmark for execution quality.
A trader or entity with enough capital to significantly move the market. Whale watching—tracking large transactions—can provide edge in crypto markets.
When price quickly reverses after triggering your stop loss, then continues in your original direction. Painful. Common in choppy, range-bound markets.
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