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Reference

Trading glossary

80 core terms every trader should understand, each defined plainly, answer-first, with a named source.

01

Risk and position sizing

Capital preservation Drawdown Drawdown recovery Fixed-fractional position sizing Maximum drawdown Notional versus risk Portfolio heat Position size formula Position sizing Risk management Risk of ruin Risk per trade Stop-loss The 1% rule

02

Volatility and statistics

Annualized volatility Average True Range (ATR)Correlation Normal distribution Sharpe ratio Standard deviation True range Variance Volatility

03

Expectancy and edge

Averaging down Edge Expectancy Expected value Fractional Kelly Kelly Criterion Martingale R-multiple Risk/reward ratio Win rate

04

Leverage, margin and liquidation

Cross margin Initial margin Isolated margin Leverage Liquidation Liquidation price Maintenance margin Maintenance margin rate (MMR)Margin Margin call Notional value

06

Market mechanics and orders

Basis point Bid-ask spread Bitcoin (BTC)Clearing house Gold Hedge Limit order Liquidity Long position Market order Open interest Short selling Slippage Stock index Stop order Trailing stop