Trading Glossary

The average number of shares traded per day over a specified period. Higher average daily volume indicates more institutional interest and better liquidity. MorningEdge requires a minimum of 200,000 shares average daily volume to ensure positions can be entered and exited without significant price impact.

A specific news event or development that causes a stock to move significantly. Strong catalysts include earnings beats, FDA approvals, M&A announcements, and major contract wins. Stocks gapping up without a catalyst ("suspicious" gaps) tend to fade back toward their previous close — volume without a catalyst usually means mean reversion, not price discovery.

A trading strategy where positions are opened and closed within the same trading day — no overnight holds. Day traders aim to profit from short-term price movements driven by momentum, news catalysts, and volume. MorningEdge focuses on morning momentum plays: buy at the 9:30 AM open, sell before the 4:00 PM close.

The number of shares of a company that are available for public trading. Low-float stocks (under 10 million shares) tend to be more volatile because there are fewer shares to absorb buying pressure. When a low-float stock gets a catalyst and high volume, the price can move dramatically in either direction.

A momentum day trading strategy that targets stocks gapping up in pre-market with unusual volume and a confirmed news catalyst. The trader enters a position shortly after the market opens (9:30 AM ET) and rides the momentum, typically exiting the same day. MorningEdge uses a 5-stage scanner to identify the best gap-and-go candidates each morning.

When a stock opens significantly higher than its previous closing price, creating a visible "gap" on a price chart. Gap-ups are caused by overnight news, earnings reports, or sector catalysts. A gap-up with high volume and a confirmed catalyst often signals continued upward momentum — this is the foundation of the gap-and-go strategy.

An order to buy or sell a stock at a specific price or better. Unlike market orders, limit orders guarantee price but not execution — if the stock never reaches your limit price, the order won't fill. MorningEdge uses limit orders for end-of-day exits to minimize closing slippage.

An order to buy or sell a stock immediately at the best available current price. Market orders guarantee execution but not price — in fast-moving stocks, you may get filled at a slightly different price than expected (called slippage). MorningEdge uses market orders at 9:30:01 AM ET for fast, reliable fills.

The tendency of a stock that is moving strongly in one direction to continue moving in that direction. Momentum traders look for stocks with increasing volume and price acceleration, especially after a catalyst event. Momentum typically peaks in the first 30-90 minutes of the trading day and often fades in the afternoon as day traders take profits.

The financial result of a trade, calculated as the difference between the sell price and the buy price, multiplied by the number of shares. A positive P/L means the trade was profitable (a "winner"), while a negative P/L means money was lost (a "loser"). MorningEdge tracks and publishes P/L for every single pick — full transparency.

Simulated trading using virtual money instead of real capital. Paper trading allows traders to test strategies, build confidence, and validate systems before risking real money. MorningEdge is currently in a 30-day paper trading validation phase using Alpaca's paper trading platform with a $100,000 simulated account.

The process of determining how many shares to buy based on your account size and risk tolerance. MorningEdge uses equal-weight allocation: $50,000 divided across 5 positions = $10,000 per trade, with a maximum risk of 0.5% of total account value ($250) per position. This limits total portfolio risk to approximately 2%.

The trading session before the regular market opens, typically from 4:00 AM to 9:30 AM ET. Pre-market trading has lower volume and wider spreads than regular hours, but it is where gap-ups first appear. MorningEdge scans pre-market data at 9:15 AM ET — close enough to the bell for accurate readings but early enough to prepare.

A ratio comparing current trading volume to the average volume over a lookback period (typically 15 days). An RVOL of 2.0 means the stock is trading at twice its normal volume. Higher RVOL signals unusual trader interest and stronger momentum. Pre-market RVOL uses a /13 normalization factor because pre-market sessions are roughly 1/13th the length of the regular trading day.

The difference between the expected price of a trade and the actual execution price. Slippage typically occurs during periods of high volatility or low liquidity. Stocks with wide spreads or low volume are more prone to slippage. MorningEdge minimizes slippage by filtering for stocks with spreads under 0.8% and using a two-phase limit-then-market exit strategy.

The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask) for a stock. A tight spread (< 0.8%) indicates good liquidity and means you can enter and exit positions with minimal slippage. Wide spreads are a red flag — they make it expensive to trade and can eat into profits.

A predetermined price level at which a trader will exit a losing position to limit losses. For example, a 2.5% trailing stop-loss means if the stock drops 2.5% from its highest point after entry, the position is automatically sold. Stop-losses are essential risk management — they prevent a small loss from becoming a catastrophic one.

A risk management technique that limits exposure to correlated assets. If five crypto-related stocks are all gapping up because Bitcoin surged, buying all five creates concentrated risk — they will all drop together if Bitcoin reverses. MorningEdge enforces a one-ticker-per-theme rule: only the strongest name from each sector or theme group makes the final top 5.

The abbreviated symbol used to identify a publicly traded stock on an exchange. For example, AAPL is the ticker for Apple Inc. and NFLX is Netflix. Traders use tickers as shorthand when discussing positions, scanning markets, and placing orders.

The average price of a stock weighted by the volume traded at each price level throughout the day. VWAP acts as a key support/resistance level for day traders — stocks trading above VWAP are considered bullish, below VWAP is bearish. Many institutional algorithms use VWAP as a benchmark for order execution.