Trading glossary

Chart basics

Candle

One bar on the chart for one stretch of time. Its body runs from the open price to the close; the thin lines above and below (the wicks) show the highest and lowest prices in that time. Green or hollow means it closed higher than it opened, red means lower.

Timeframe

How much time each candle covers: 1 minute, 15 minutes, 4 hours, 1 day and so on. The same market can look calm on one timeframe and busy on another.

Volume

How much traded during a candle. A move on high volume carries more weight than the same move on little volume.

Moving average (MA)

The average closing price over the last N candles, drawn as a line. Price above a rising average is often read as an uptrend.

RSI

The Relative Strength Index, from 0 to 100, measures how strongly price has been rising or falling lately. Above 70 is often called overbought, below 30 oversold.

MACD

Moving Average Convergence Divergence: the gap between a fast and a slow moving average, used to spot momentum turning.

Trendline

A straight line through a run of highs or lows that shows the direction and slope of a move.

Levels

Support

A price area where buyers have stepped in before, so falls have tended to stop there. Auto Analyze shows how many times price touched it.

Resistance

A price area where sellers have stepped in before, so rises have tended to stall there.

Touches

How many separate times price came to a level and turned. More touches usually means traders are watching that level.

Retest

Price coming back to a level it just broke. Retest held means the old level now works the other way, for example old resistance acting as support.

Confluence

Several separate signals pointing at the same price, such as a support level, a moving average and a round number together.

Market structure

Higher high and higher low

Each peak above the last and each dip above the last: the shape of an uptrend.

Lower high and lower low

Each peak below the last and each dip below the last: the shape of a downtrend.

Break of structure (BOS)

Price breaking past the last swing high in an uptrend, or the last swing low in a downtrend, which suggests the trend is carrying on.

Change of character (CHoCH)

The first break against the trend, for example a downtrend making a higher high. It is an early sign the trend may be turning.

Fair value gap (FVG)

A gap left by a fast move, where one candle’s range does not overlap the candle two before it. Price often comes back to fill part of it.

Liquidity sweep

A quick push past an obvious high or low that triggers the orders resting there, then a turn back.

Bear trap and bull trap

A break below support that reverses straight back up (a bear trap), or a break above resistance that reverses straight back down (a bull trap).

Divergence

Price and an indicator such as RSI moving in different directions, for example price making a lower low while RSI makes a higher low. It can warn that a move is losing strength.

Prediction markets

Up or down round

A short market, often 5 or 15 minutes, on whether a coin ends the window higher or lower than it started. See how up or down rounds work.

Price to beat

The starting price of a round. If the coin finishes at or above it, Up wins.

Odds

The price of an Up or Down share, from 1 to 99 cents. A winning share pays $1, so a 70 cent price means the market puts the chance near 70%.

Order book

The list of open offers to buy and sell at each price. It shows where the money is waiting.

Paper trading

Practising with virtual money on live prices. Nothing real is won or lost.