Day Trading Flashcards

All 38 terms in this deck

The full list, for reference and search.

After-Hours Trading

After-hours trading is the 4:00 p.m. to 8:00 p.m. ET electronic session that follows the regular close.

Breakdown

A breakdown is the bearish mirror of a breakout: price falls through a support level that held on multiple prior tests, and the selling continues instead of bouncing.

Breakout

A breakout is a push through a price level that has repeatedly capped a stock, usually a prior high or well-tested resistance, on volume heavier than the sessions that built the level.

Catalyst

A catalyst is the specific news event that gives a stock a reason to move: an earnings report, an FDA decision, a contract award, a merger headline, an offering, an activist filing.

Chasing

Entering 3-5% or more above the price where a setup actually triggered is chasing: buying the move after it happened instead of when it signaled.

Choppy Market

A choppy market is tape with no follow-through: breakouts fail, breakdowns fail, and moves reverse before reaching any reasonable target in either direction.

Circuit Breaker

Market-wide circuit breakers halt all US equity trading when the S&P 500 falls 7% (Level 1), 13% (Level 2), or 20% (Level 3) from the prior day's close.

Consolidation

Consolidation is a compression phase after a directional move: price narrows into a tightening range as the market digests the move, volume contracts, and neither side presses.

Dip Buy

A dip buy is a long entry into a pullback within a stock that is trending up, rather than a chase of the highs.

Fade

To fade a move is to trade against it: shorting a vertical spike or buying a panic flush on the bet that the move is overextended and will snap back toward a mean, often VWAP.

Fakeout

A fakeout is a break of a key level that fails almost immediately, trapping the traders who entered on the move and stopping out the ones positioned against it.

Float Rotation

Float rotation is when a stock's cumulative volume for the day exceeds its float — on paper, every freely tradable share has changed hands at least once.

Gamma Squeeze

A gamma squeeze is a rally driven by options dealers hedging the calls they sold.

Gap and Go

Gap and go is a momentum setup where a stock gaps up on a catalyst and continues higher after the open instead of fading.

Gap Down

A gap down is an open below the prior session's close, with no trades printed in between.

Gap Up

A gap up is an open above the prior session's close, leaving a stretch of prices where no shares traded.

Gapper

A gapper is any stock set to open sharply away from its prior close — the trader's shorthand for the names a premarket scanner surfaces each morning.

Green-to-Red Move

A green-to-red move is an intraday cross from positive to negative against the prior close — a stock that was up on the day loses the entire gain and goes red.

High of Day

High of day (HOD) is the highest price a stock has printed in the current regular session.

Level 2

Level 2 is the live order book display: every visible bid and offer at each price level, tagged with the market maker or ECN posting it and the size shown.

Low Float

A low float stock has a small supply of freely tradable shares — commonly defined as under 10-20 million, with the most explosive movers under 5 million.

Low of Day

Low of day (LOD) is the lowest price printed in the current regular session, and the intraday support level the most eyes are on.

Momentum Trading

Momentum trading buys strength and sells weakness — the bet that a stock already moving on volume will keep moving in the same direction, the direct opposite of mean-reversion strategies that fade extremes.

Opening Range Breakout

An opening range breakout (ORB) trade enters when price clears the high or low of the session's first minutes — traders commonly define the range with the first 5, 15, or 30 minutes of trading.

Pattern Day Trader (PDT) Rule

The pattern day trader rule flags any margin account that places 4 or more day trades within 5 business days, when those day trades exceed 6% of the account's total trades in that window.

Penny Stock

A penny stock is a low-priced stock, generally trading under $5 a share, often (though not always) a small or micro-cap company with thin trading volume and limited public information.

Premarket

Premarket is the 4:00 a.m. to 9:30 a.m. ET session where US stocks trade electronically before the official open.

Red-to-Green Move

A red-to-green move is an intraday cross from negative to positive against the prior session's close.

Relative Volume (RVOL)

Relative volume (RVOL) is current volume divided by the stock's average volume for the same point in the session; a reading of 3.0 means the stock has already traded three times its normal share count for that time of day.

Scalping

Scalping targets many small gains — a few cents to a fraction of a percent per trade — with hold times measured in seconds to minutes.

Shakeout

Unlike a breakdown, which starts a new leg lower, a shakeout is a brief dip below support that reverses right back into the range once the stops beneath it are triggered.

Short Squeeze

A short squeeze is a rally amplified by forced buying from short sellers.

Tape Reading

Tape reading is inferring buyer and seller behavior from raw prints and quotes instead of chart patterns.

Time and Sales

Time and sales is the running record of executed trades — each print showing price, share size, timestamp, and venue.

Trading Halt

A trading halt is a temporary pause in trading of a single stock, imposed either for pending news or for excessive volatility.

Unusual Volume

Where relative volume puts a number on a volume spike, unusual volume is the broader flag: turnover far outside a stock's norm, often appearing before the reason for it is public.

VWAP

VWAP — volume-weighted average price — is the session's average trade price with every print weighted by its share size: cumulative (price x volume) divided by cumulative volume, reset each day at the open.

Washout

A washout is a fast, high-volume flush to the downside that runs stops, exhausts sellers, and often marks at least a short-term low.