Trading and Investing Glossary: 100 Terms in Plain English
All the key trading, investing, and crypto terms explained in plain English, with examples. Pick a word to open its explanation.
- ATR — The ATR indicator in plain English: what Average True Range shows, how to set a stop-loss with ATR, and…
- DCA — DCA in plain English: how dollar-cost averaging works, an example with monthly purchases, pros and cons…
- DeFi — DeFi in plain English: what decentralized finance is, how swaps, loans, and pools work without a bank, and…
- EBITDA — EBITDA in plain English: earnings before interest, taxes, depreciation, and amortization, how to calculate it, why…
- EPS — EPS in plain English: the earnings-per-share formula, a worked example, how diluted EPS differs, how it relates…
- FOMO in Trading — FOMO in plain English: what fear of missing out looks like in the market, why it makes people buy at the top, how…
- HODL — What HODL means in plain English: where the meme about holding crypto long term came from, how the strategy works…
- NFT — NFTs in plain English: what a non-fungible token is, what exactly you are buying, why the NFT market is so…
- OCO Order — OCO orders in plain English: how the “one cancels the other” pair works, how to set a stop-loss and take-profit…
- P/E — The P/E ratio in plain English: the formula, an example, what a high or low P/E means, why comparing…
- ROE — ROE in plain English: the return-on-equity formula, a worked example, what value is considered…
- Rug Pull — Rug pulls in plain English: how crypto project teams run off with investors’ money, what types exist,…
- Seed Phrase — Seed phrases in plain English: what one is, why it gives full access to your wallet, where to store it, where not to, and…
- VWAP — VWAP in plain English: what volume-weighted average price is, how it differs from a moving average,…
- Airdrop — Airdrops in plain English: what a free token giveaway is, why projects run them, and how to spot…
- Iceberg Order — Iceberg orders in plain English: why large players split an order into visible and hidden parts, how it…
- Altcoins — Altcoins in plain English: what counts as an altcoin, what types exist, why they are more volatile than Bitcoin, and…
- Stock Buyback — Buybacks in plain English: why a company repurchases its own shares, how a buyback affects a shareholder’s stake, and…
- Benchmark — Benchmarks in plain English: what this portfolio reference point is, which indexes are used most often, how…
- Beta Coefficient — Beta in plain English: how it shows a stock’s link to the market, what a beta of 1, 0.5, and 2 means, where to…
- Bid and Ask — Bid and ask in plain English: what buy and sell prices on an exchange are, why there is a spread between them, at which…
- Stock Market Index — Stock market indexes in plain English: how they are built, which indexes are best known, how an index is calculated by…
- Exchange Order — Exchange orders in plain English: what a buy or sell order is, how a market order differs from…
- Blockchain — Blockchain in plain English: how a chain of blocks works, why records can’t be faked, who confirms…
- Sideways Market (Range) — A sideways or flat market in plain English: how to spot a sideways trend on a chart, why trend traders lose money in it…
- Brokerage Account — Brokerage accounts in plain English: why you need a broker, how to open an account, what you can buy with it, what types…
- Bull and Bear Market — Bull and bear markets in plain English: who the bulls and bears are, how to tell a rise from a decline…
- Bull Flag — The bull flag in plain English: what this trend continuation pattern is made of, where to enter, where to place a stop-loss, and…
- Win Rate — Win rate in plain English: how the share of winning trades is calculated, why a high win rate doesn’t mean profit, and…
- Volatility — Volatility in plain English: what it is, why crypto is more volatile than stocks, how volatility affects…
- Gas Fees in Crypto — Gas and network fees in plain English: what you pay for when sending crypto, why Ethereum calls it…
- Head and Shoulders — The head and shoulders pattern in plain English: what it looks like, what the neckline is, how to calculate the target, and where…
- Blue Chips — Blue chips in plain English: which stocks get this name, where the term comes from, how they differ from second-tier…
- Price Gap on a Chart — Chart gaps in plain English: why price opens with a gap, what types of gaps exist, is it true that a gap…
- Double Top — Double tops and double bottoms in plain English: what the pattern looks like, when it is confirmed, how to calculate…
- Delisting — Delisting in plain English: why an exchange removes an asset from trading, what happens to coins and stocks after…
- Trading Deposit — A trading deposit in plain English: what it is, how it differs from a bank deposit, how much to risk…
- Divergence — Divergence in plain English: when price and the RSI or MACD indicator disagree, bullish and bearish divergence,…
- Dividend Yield — Dividend yield in plain English: the formula, a worked example, why a high percentage can be a trap, and…
- Dividend Gap — Dividend gaps in plain English: why a stock’s price drops by roughly the payout after the record date, when…
- Bitcoin Dominance — Bitcoin dominance in plain English: how BTC’s share of total crypto market cap is calculated, where to check the index…
- IIS (Russian Investment Account) — IIS in plain English: what a Russian individual investment account is, what tax benefits it offers, how it differs from…
- MACD Indicator — The MACD indicator in plain English: what it is made of, what the MACD line, signal line, and histogram mean, how…
- RSI Indicator — The RSI indicator in plain English: how it is calculated, what the 70 and 30 zones mean, why overbought is not a signal to…
- Inflation — Inflation in plain English: why money buys less over time, how it is measured, what real…
- Market Capitalization — Market cap in plain English: how the value of a company or a coin is calculated, how large caps differ from small ones, and…
- Crypto Whale — Who crypto whales are: holders of large amounts of coins, how their trades move prices, how people track their…
- Contango and Backwardation — Contango and backwardation in plain English: why a futures contract trades above or below spot, what drives it, an example…
- Cross Margin and Isolated Margin — Cross and isolated margin in plain English: how each mode affects liquidation, what you risk when…
- Bond Coupon — Bond coupons in plain English: what a coupon and accrued interest are, how coupon income is calculated, what types of coupons exist, and…
- Position Liquidation — Liquidation on a crypto exchange in plain English: why the exchange closes a leveraged trade, what the liquidation price…
- Liquidity Pool — Liquidity pools in plain English: how a liquidity pool works on a DEX, who liquidity providers are, where…
- Liquidity — Liquidity in plain English: what it is, how to tell if an asset is liquid, why illiquid coins are dangerous, and…
- Exchange Listing — Crypto listings in plain English: what it means when a coin is added to an exchange, why in the first hours the price…
- False Breakout — False breakouts in plain English: why price breaks a level and then comes back, how to recognize a false breakout,…
- Long Position — Going long in plain English: what it means to open a long position, how a long differs from a short, how a long works on…
- Lot in Stocks and Forex — What a lot is in trading: the minimum block of shares on an exchange, standard, mini, and micro lots in forex, how lot…
- Crypto Mining — Crypto mining in plain English: how miners confirm Bitcoin blocks, what Proof of Work is, how…
- Margin — Margin in trading in plain English: what collateral for leveraged trading is, how initial margin differs from…
- Margin Call — Margin calls in plain English: what one is, why a broker or exchange asks you to top up your account, how it…
- Market Maker — Market makers in plain English: who keeps buy and sell orders in the book, how they earn on the spread, why…
- Memecoin — Memecoins in plain English: what meme coins like Dogecoin and PEPE are, why their price rests only on…
- Trading Volume — Trading volume in plain English: what volume on a chart shows, how it confirms a trend or a level breakout,…
- Option — What an option is in plain English: the right to buy or sell an asset at a price agreed in advance, how a call…
- Pullback and Market Correction — Pullbacks and corrections in plain English: how a correction differs from a trend reversal, how deep a pullback can be…
- Open Interest — Open Interest in plain English: what the number of open contracts on futures and…
- Pending Order — Pending orders in plain English: what types exist, how a limit order differs from a stop entry order, and how…
- Pump and Dump — Pump and dump in plain English: how organizers inflate an asset’s price and dump it on the crowd, warning signs…
- Pip (Point) in Forex — What a pip is in trading: how to count pips on currency pairs, why yen pairs use a different step, how much…
- Bollinger Bands — Bollinger Bands in plain English: what the indicator is made of, what narrowing and widening bands mean, how…
- Level Breakout — Breakouts in plain English: what it means when price breaks support or resistance, how to tell that price…
- Slippage — Slippage in plain English: why a trade fills at a different price than the one you saw, when it is stronger…
- Portfolio Rebalancing — Portfolio rebalancing in plain English: why bring asset weights back to plan, how often to do it, an example…
- Recession — Recession in plain English: what counts as an economic downturn, what signs reveal it, how a recession affects…
- Swing Trading — Swing trading in plain English: what this trading style is, how long trades are held, which timeframes…
- Scalping — Scalping in plain English: what this trading style is, which timeframes scalpers use, why…
- Moving Average — Moving averages in plain English: how an MA is calculated, how SMA differs from EMA, which periods are popular, and…
- Smart Contract — Smart contracts in plain English: how a program on the blockchain executes the terms of a deal on its own, where it is used,…
- Risk/Reward Ratio — Risk/reward ratio in plain English: how to calculate a trade’s risk/reward from the stop-loss and take-profit,…
- Stock Split — Stock splits in plain English: why a company splits its shares, what happens to the price and your stake, what a…
- Spot — What spot means in plain English: buying an asset right away and in full, how spot trading on a crypto exchange…
- Spread — Spread in plain English: what it is, why buy and sell prices differ, how the spread affects…
- Fed Interest Rate — The Fed rate in plain English: who sets it and how, and why raising or cutting the rate affects…
- Order Book — The order book in plain English: what an exchange order book is, how buy and sell orders are arranged, what…
- Stablecoin — Stablecoins in plain English: how coins hold their dollar peg, how USDT, USDC, and DAI differ, why…
- Crypto Staking — Staking in plain English: how locking coins for rewards works, where people stake, what its risks are…
- Stop Out — Stop outs in plain English: when a broker force-closes your trades, how it differs from…
- Stop-Limit Order — Stop-limit orders in plain English: how the stop price and limit price work, an exchange example, how it differs…
- Option Strike Price — What a strike is in plain English: an option’s exercise price, what it means for an option to be “in the money,” “at the money,” and…
- Timeframe — Timeframes in plain English: what one is on a chart, which timeframes exist, how a higher timeframe helps…
- Tokenomics — Tokenomics in plain English: what supply, issuance, unlocks, and token distribution are, what to look at…
- Fibonacci Levels — Fibonacci levels in plain English: what 38.2%, 50%, and 61.8% mean, how to draw the grid on a chart, how to look for…
- Funding Rate — Funding on a crypto exchange in plain English: what the funding rate on perpetual futures is, who pays whom…
- Futures — What a futures contract is in plain English: an agreement to buy an asset in the future, margin collateral, dated and…
- Bitcoin Halving — Bitcoin halving in plain English: why the miner reward is cut in half, how often it happens, and why…
- Hedge (Hedging) — Hedging in plain English: what a hedge is in the market, how it protects a portfolio from a drop, what…
- Cold Wallet — Cold wallets in plain English: how one differs from a hot wallet and from an exchange, what types exist, who needs one, and what…
- Short Squeeze — Short squeezes in plain English: why short sellers are forced to buy back an asset, how this drives the price up,…
- Expiration — Expiration in plain English: what happens to a futures contract and an option on the expiration date, how physically settled…
- Japanese Candlesticks — Japanese candlesticks in plain English: what a candle is made of, what the body and wicks show, how a green candle…
How to Use This Glossary
Came across an unfamiliar word in a signal, the news, or a chat? Look it up here. To learn the basics in order, take the free Aspiro Academy course, starting with the lesson the world doesn’t love the poor. Useful tools are in the trader calculators section.
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- Terms are the foundation, but decisions should be based on rules and risk.
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Frequently Asked Questions
Who is this glossary for?
For anyone just starting to learn about trading, investing, and crypto. Every term is explained in plain English with an example.
Where should I start learning?
With the free “Start” course at Aspiro Academy, which walks through the basic concepts step by step, with practice.
Will new terms be added?
Yes, the glossary is updated regularly.
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