A volatility measure — the average daily price range over 14 days. Used to set stop distances.
The mean number of shares traded per day over a lookback period. Higher = more liquid.
Buying on margin means using money borrowed from your broker to purchase more shares than your cash balance alone would allow. While margin can amplify gains, it equally amplifies losses — and if your account falls below the broker's minimum, you face a margin call, forcing you to deposit cash immediately or have positions liquidated at the worst possible moment.
The news event driving a stock's move — earnings, FDA approval, contract win, etc. Gaps without catalysts tend to fade.
A trailing stop that hangs from the highest high, using ATR to set distance. Prevents cutting winners short.
Buying and selling stocks within the same trading day, closing all positions before 4:00 PM ET.
Peak-to-trough decline in portfolio value. Max drawdown measures worst-case scenario.
The number of shares available for public trading. Low float stocks move faster on volume.
A day trading strategy that buys stocks gapping up on high volume, riding momentum through the trading day.
When a stock opens higher than its previous close. A 5% gap-up means it opens 5% above yesterday's closing price.
An order to buy/sell only at a specific price or better. Used to control entry/exit prices.
An order to buy/sell immediately at the current best available price.
The tendency of a stock moving in one direction to continue moving that way. Measured by rate of change.
The price range established in the first 5-15 minutes of trading. Breakouts above/below signal direction.
The dollar or percentage gain/loss on a trade or portfolio.
Simulated trading with fake money to test strategies before risking real capital.
How much capital to allocate per trade. We use equal $10,000 positions across 5 picks.
Trading that occurs before the regular 9:30 AM ET market open. Used to gauge overnight demand.
Gross profits divided by gross losses. Above 1.5 means winners significantly outpace losers.
A traffic light system (GREEN/YELLOW/RED) that gates trading activity based on broad market signals.
Risk arbitrage, also called merger arbitrage, is a trading strategy that attempts to profit from the price gap between a company's current stock price and the price offered in a pending acquisition or merger. The "risk" refers to the possibility the deal falls apart, which can cause the stock to drop sharply.
Today's volume compared to the 15-day average. RVOL > 1.0 means heavier than usual trading — a sign of institutional interest.
Risk-adjusted return metric. Above 2.0 is excellent, above 4.0 is elite for a retail algo.
The difference between expected and actual fill price. A key cost in any trading system — wider spreads and volatile conditions increase slippage.
The difference between the best bid and ask prices. Tighter spreads mean lower trading costs.
A pre-set price that triggers an automatic sell to limit losses. Our system uses ATR-based stops.
Limiting to 1 pick per correlated group (e.g., max 1 crypto stock) to avoid concentrated risk.
A stock's short symbol (e.g., AAPL for Apple). Used to identify securities on exchanges.
The average price weighted by volume throughout the day. Institutional benchmark — above VWAP is bullish.