Trading words, in plain English.

The size-weighted average of every price you bought or sold at. Adding to a losing trade pulls the average towards the price, but it also makes the position bigger, so the loss at the stop grows.

Moving the stop to the entry price once a trade has moved in your favour, so it can no longer lose apart from fees and slippage. A trade closed there is scored as flat, about 0R.

Price closing beyond a level that has held before, such as the top of a range. Many breakouts fail, which is why the stop goes where the breakout would be proven wrong.

Growing an account by risking a fixed percent of the current balance, so positions grow after wins and shrink after losses. Small steady returns compound into large ones; so do small steady losses.

Several separate reasons pointing at the same level or direction, for example support, a moving average and a round number all at one price.

A margin mode where every open position draws on the whole account balance. A losing position can use money meant for the others, and the whole balance can be liquidated.

Buying a fixed dollar amount at regular intervals whatever the price. It is a way to build a long-term holding, not the same as adding to a losing trade, which adds risk to an idea that is going wrong.

The fall from an account's highest balance to a later low, in percent. Losses need bigger gains to recover: a 50% drawdown needs a 100% gain to get back.

A price range, rather than one price, where a trade can be entered. The stop and the R are measured from where the trade actually fills.

The average result per trade over many trades, in R: win rate times the average win, minus the loss rate times the average loss. A positive expectancy is the only thing that makes a strategy pay over time.

When an order is executed. A limit order fills only at its price or better; a market order fills at whatever is available.

On perpetual futures, a payment between longs and shorts every few hours that keeps the perp's price close to the spot price. When it is positive, longs pay shorts; when it is negative, shorts pay longs.

The shape of an uptrend: each swing high and each swing low is above the one before. Lower highs and lower lows describe a downtrend.

The price that proves a trade idea wrong. It is decided before entry, and the stop goes there.

A margin mode where each position has its own margin. If that position is liquidated you lose its margin, not the rest of the account.

A formula for the bet size that grows an account fastest for a given edge. Real edges are uncertain and the swings at full Kelly are brutal, so traders who use it take a fraction of it.

Holding a position bigger than the margin put up: $10,000 of BTC on $1,000 of margin is 10x. When the position is sized from the stop, leverage changes the margin and the liquidation price, not the amount at risk.

An order to buy or sell at a set price or better. It may never fill if price does not reach it. A limit order resting on the book usually pays the lower maker fee.

When an exchange force-closes a leveraged position because its margin can no longer cover the loss. If the liquidation price sits inside your stop, the stop will never be reached.

How much can be bought or sold near the current price without moving it. Thin liquidity means more slippage on market orders and stops.

A position that profits when the price rises.

Exchanges charge less to orders that rest on the order book and add liquidity (maker) than to orders that fill at once against it (taker). Fees are charged on the whole position, so leverage multiplies them against your margin.

The money set aside to hold a leveraged position. Margin is not the same as risk: with a stop, the risk is the distance to the stop times the size.

The reference price an exchange uses for unrealised profit and liquidations, usually built from several spot prices so that a single wick on one venue cannot liquidate traders.

An order that fills immediately at the best prices available. It is fast, but in a thin or fast market the fill can be worse than the last price shown.

Short for not financial advice: the content is education or opinion, not a recommendation for your money.

The number of futures contracts open at a moment. Rising open interest means new positions are being opened; falling open interest means positions are being closed.

Closing part of a position at a target and leaving the rest to run. Its result counts in proportion: half off at +2R adds +1R to the trade.

Futures contracts with no expiry date that track the spot price through the funding rate. Most leveraged crypto trading happens on perps.

How many coins, shares, contracts or lots to trade. It comes from the account, the percent risked and the distance to the stop: size = (account x risk %) / (entry - stop).

Gross profit divided by gross loss over a set of trades. Above 1 the trades made money; below 1 they lost it.

One unit of risk: the distance from entry to the initial stop. A trade's result in R is its move divided by that distance, so +2R made twice what was risked and a full stop is -1R.

The distance to the target divided by the distance to the stop. A 2:1 setup aims to make 2R for every 1R risked, and needs to win more than a third of the time to break even before fees.

A period when price moves sideways between a ceiling (resistance) and a floor (support).

Price moving back above a level it had lost, and holding there. It often means a breakdown has failed.

The chance that a run of losses takes the account below a point you cannot come back from. It climbs fast as the percent risked per trade climbs.

The percent of the account lost if the stop is hit. It is commonly kept between 0.5% and 2%, because losing streaks are longer than they feel.

A position that profits when the price falls. On perps or margin you sell first and buy back later.

The gap between the price you expected and the price you got. It is common on market orders, on stops in fast markets and in thin coins.

Buying or selling the asset itself, with no leverage and no expiry. A spot position cannot be liquidated.

An order that closes a losing trade at the invalidation level, and the thing that defines 1R. Many stops become market orders when triggered, so in a fast market they can fill past the level.

Price areas where buying (support) or selling (resistance) has stopped moves before. A level that breaks often switches role.

A price where some or all of a position is closed for a gain. Targets are usually set as multiples of the stop distance: 1R, 2R, 3R.

The reason for a trade: what should happen, and the price that would prove it wrong. A thesis without an invalidation level cannot be sized.

A complete log of every trade with its entry, stop and result, losses included. A record that only shows winners is marketing, not a record.

A stop that follows price at a set distance as the trade moves in your favour, locking in more of the move. It only ever moves in the trade's favour.

The thin line above or below a candle's body, showing how far price traded before coming back. A long wick shows rejection of that price.

The share of trades that made money. On its own it says little: a 30% win rate can pay well if the winners are much bigger than the losers.