Trading Glossary: Key Terms & Definitions
Master the language of the markets. Our comprehensive guide covers essential stock market terms, trading jargon, and key concepts for every trader.
Common Trading Terms
Day Trading
The practice of buying and selling financial instruments within the same trading day, such that all positions are closed before the market closes for the trading day.
Swing Trading
A speculative trading strategy in financial markets where a tradable asset is held for one or more days in an effort to profit from price changes or "swings".
Long Position
Buying a security with the expectation that the asset will rise in value.
Short Position
Selling a borrowed security with the expectation that the asset will fall in value, allowing the trader to buy it back at a lower price.
Bull Market
A market condition where financial markets are rising or are expected to rise. "Bullish" refers to an optimistic outlook.
Bear Market
A market condition where securities prices fall 20% or more from recent highs due to widespread pessimism and negative investor sentiment.
Risk & Money Management
PnL (Profit and Loss)
The net value of profit or loss in a trading account or specific trade. It measures the financial performance of a trader over a period.
R-Multiple
A measure of risk/reward where "R" represents the initial risk amount. A 2R gain means the profit was two times the initial risk taken on the trade.
Risk/Reward Ratio
A ratio used to compare the expected returns of an investment with the amount of risk undertaken to capture these returns.
Stop Loss
An order placed with a broker to buy or sell a specific stock once the stock reaches a certain price. It is designed to limit an investor's loss on a position.
Drawdown
Referencing the decline in an investment or trading account from the peak to the trough of a specific period, usually quoted as a percentage.
Market Mechanics
Liquidity
The efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.
Volatility
A statistical measure of the dispersion of returns for a given security or market index. In simpler terms, it represents how much the price swings around the mean.
Slippage
The difference between the expected price of a trade and the price at which the trade is compounded or executed. Slippage often occurs during periods of higher volatility.
Spread
The difference between the bid (sell) and ask (buy) price of a security or asset.
App Specifics
Sync Merge
The process of reconciling your local data with the server. If an entry shares the same Hidden ID, the uploaded version (backup) acts as the "master" and updates the server. Entries with unique IDs are preserved, meaning the server keeps items that are missing from your upload.
Online account
The state where your user profile is authenticated and connected to the online database. With an online account, your data is securely backed up to the server, allowing you to access it from multiple devices.
Daily Journal Model
TradingStreak enforces a "One Journal Per Day" model. While you can log multiple individual trades (PnL entries) within a single day, they are all aggregated into a single Journal Entry for that date. This ensures your daily notes, emotions, and key takeaways remain organized in one place.
Self-Observation
An optional journal section for noticing the main internal pattern in a journal entry or trading session, not necessarily one specific trade or mistake. Use it in three passes: name the emotion and intent clarity, capture the thought/self-talk/impulse chain, then mark when you noticed it and write one cue for the next similar session.
Example Entry
One possible session pattern- Scope
- Main pattern for this journal entry/session
- Emotion
- Frustrated
- Intent clarity
- 2/5, fuzzy
- Thought
- I need to make back the loss.
- Self-talk
- One more trade will fix it.
- Impulse/action
- Wanted to increase size immediately.
- Noticed at
- Self-talk
- Mistake type
- Revenge trade
- Trigger
- First loss or stop hit
- Cue next time
- Pause after first loss.
Trading Costs and Taxes
Expenses incurred when executing trades, including broker commissions, platform fees, exchange fees, and slippage. TradingStreak allows you to log costs alongside each trade to calculate your true net profit. The Costs & Taxes page also includes separate tax estimate settings for your capital gains tax rate, tax-free allowances, and withholding status.
Deductible Costs
Costs that can be offset against your trading profits for tax purposes (German: "verrechenbar"). Examples include platform fees, market data subscriptions, and professional software. Non-deductible costs cannot be offset and must be paid from after-tax profits. Deductibility depends on your tax jurisdiction and whether you trade as a private individual or professional trader. Always consult a tax professional.
Taxes
TradingStreak includes tax estimation tools under Costs & Taxes. You can configure your capital gains tax rate, set a tax-free allowance (e.g., CGT allowance in UK, Freibetrag in DE), and enable "Tax Withheld at Source" if your broker automatically deducts taxes from your profits. These estimates are informational and do not reduce TradingStreak net PnL or platform billing.
Trader's Win Streak
A leaderboard metric that counts the longest run of logged journal days with positive net PnL. It only considers days where a journal entry exists, so skipped calendar dates do not break the streak.
Calendar Win Streak
A stricter leaderboard streak that counts consecutive calendar dates with positive net PnL. Missing days, flat days, and losing days reset the streak.
Consistency Score
A TradingStreak leaderboard score that combines win rate, profit factor, and active trading days. Profit factor is capped in the formula so one outlier does not dominate the score.
Macro & Economics
Macro Radar
An AI-driven daily overview of the broader market regime. It analyzes leading indicators like the VIX to summarize the current risk appetite of the market, helping you align your trade sizing and strategy with the prevailing weather.
Market Regime
The current environment of the financial markets, typically categorized as Risk-On (bullish, aggressive), Neutral (cautious, selective), or Risk-Off (bearish, defensive). Regimes dictate whether to increase exposure or tighten risk management.
Macro Score / Regime Score
A compact numeric view of the market's risk appetite. It turns several macro indicators into one trading-weather score.
Score Map
Favorable trend-following conditions with normal sizing.
Choppy action where tighter stops and reduced size help.
Defensive conditions focused on capital preservation.
Formula & Data
The score combines four macroeconomic variables into a unified regime reading. Daily data is fetched for each component.
- VIXBelow 16 scores +1. Above 22 scores -1.
- Yield Curve (10Y-2Y)Substantially positive (> 1.0%) scores +1. Inverted (< 0%) heavily penalizes -2.
- Credit Spreads (High Yield)Tight spreads (< 3.0%) score +1. Wide spreads (> 4.5%) score -1.
- Fed Funds RateUsed qualitatively: high or rising rates suppress liquidity; low or falling rates boost it.
VIX (Volatility Index)
The CBOE Volatility Index, often called the market's 'fear gauge'. It measures the stock market's expectation of volatility based on S&P 500 index options. Low VIX (< 15) indicates calm, 15-20 is moderate, 20-25 is elevated, and high VIX (> 25) indicates fear and market stress.
Yield Curve (10Y-2Y)
The difference in yield between the 10-year and 2-year US Treasury bonds. A positive steep curve usually indicates healthy economic growth (Risk-On). An inverted curve (short-term rates higher than long-term) is historically a strong indicator of looming recession and market stress (Risk-Off).
Credit Spreads
The difference in yield between corporate bonds and risk-free government bonds. High Yield (Junk Bond) spreads are particularly insightful; tight spreads (< 3.0%) mean investors are confident and funding is easy (Risk-On), while widening spreads (> 4.5%) mean fear of defaults and drying liquidity (Risk-Off).
Fed Funds Rate
The target interest rate set by the US Federal Reserve. High or rising rates tighten financial conditions and drain liquidity (headwind for stocks). Low or falling rates ease conditions and flood markets with liquidity (tailwind for stocks).