Reference Glossary

Trading Glossary: Common Terms & Definitions

The Trader's Glossary

Familiarize yourself with the core terminology used in financial markets. Understanding these terms is essential for following analyses and guides:

The net financial result of a trade or trading account, showing total gains or losses after fees.

The peak-to-trough decline in a trading account's equity, representing the maximum cumulative loss experienced.

The percentage of winning trades relative to the total number of trades executed.

The ratio of gross profits to gross losses. A profit factor above 1.0 indicates a profitable trading strategy.

The calculation of how many shares, contracts, or lots to trade based on risk parameters and account size.