STOCK MARKET COMMON TERMS

Click the links for video breakdowns on each topic.

Basics

Day Trader – Someone who enters and exits anything in the market in the same day

Swing Trader – Someone who enters and exits anything in the market in 1-10 day

Investor – Someone who buys assets in the stock market and holds them as long as possible
to capitalize on all the dividends pay outs and growth.

Broker – This is a person or company that holds your money, allows you to buy and sell
stock, and sends your tax forms every year. There sole job is to offer products to invest in
and allow you to connect to certain sellers or buyers

Stock Chart – A place where you can visually see price movement

Commissions ​ - This is the price of executing a buy or sell order. Most platforms will cost you
$5 per order but some are free.

Index Funds​ – A single investment that holds hundreds or thousands of stocks. This allows
you to not have to do the hard work but benefit from a diversified holding of stocks and the
returns associated.

Buying​ – Buying stock involves getting stock to your broker in exchange for money. This is
done to enter long positions or close short positions.

How to Buy Stocks

Selling​ – Selling stock involves giving stock to your broker in exchange for money. This is
done to exit long positions or open short positions.

Shorting​ – This is where you borrow money from your broker to borrow stock. This is a
strategy used to make money when the market drops. This also can be very dangerous
because the losses are unlimited, you have to pay interest for borrowing, and you need the
drop to happen quickly.
Dividend Videos
Dividend​ – Are a great way to great income and grow assets faster over time. Dividends are
basically payouts that occur from just holding a stock that gives them out. Some stocks can
pay 3-7% per year which means regardless of market direction you are still getting paid.

How to Find Dividend Stocks with the Highest Yield

Option Trading
Options​ – Are a way to leverage small amounts of money to create large gains from small
moves. This is done because with an option you can control up to 100 shares of stock for a
fraction of the price to actually buy them yourself. Some options allow you to control
$10,000-$50,000 worth of stock just from the price of $1,000.

How to Place an Option Trade on Robinhood

Why to Never Trade Options On Robinhood
How to Decide the Option Strike and Date!
Option Strangle Explained
Top 5 Option Trading Tips
Best Option Strategy for HUGE GAINS
How to Place an Option Trade on TDAmeritrade's Website

Technical Analysis

Half Positions​ – When buying anything in the stock market a good strategy is to buy in
different increments. This could be half, third, or fourth of the overall amount you were willing
to invest/trade initially. But spreading out the buying you can enter at cheaper prices and
have greater returns. This can also be done for selling.

Divergence​ – A typical indicator of reversal that is found when looking at certain indicators.
Typically when the market keeps dropping or popping and the indicator is doing the opposite.
During these times of higher highs in the market and lower highs on the indicator we can
expect a reversal soon!

Trading Patterns​ – The stock market gives opportunities for you to draw, triangles, wedges,
support, or resistance lines and with these patterns you will have to ability to trade or invest
from them. For example, if a stock is touching a support line that it has previously bounced
off of that may be a great place to enter a trade.

Scale into A Trade​ – This is the trading/investing technique for how to properly use position
sizes. Scaling is the art of spreading out those orders to achieve the lowest possible average
price. You can also scale out of trades which help you achieve the highest possible exit price.
Technical Analysis​ – This is the art of reading stock charts. By analyzing them properly with
indicators and patterns you can get a general edge to help you maximize gains and minimize
losses.

Triangles​ – This is a common trading pattern where the stock market may form a triangle.
This is a period of consolidation that normally leads to a large breakout.

Gaps​ – Whenever the market opens higher or lower than where it closed, it produces a gap.
A gap can tell a trader a lot whether we will continue higher, fill the gap, and more. Gaps are
key pieces of information to understand market strength of weakness, and there are certain
ways to invest and trade from them.

Support/Resistance​ – This is a place in the market where stocks have previously bounced, if
it happened once it the market it is likely to happen again. Charting these can give
traders/investors great places to enter or exit.

Fractal Patterns​ – This is a theory that patterns and indicators can show similarities on
different time frames. Just like a lightening bolt produces smaller and smaller lightening bolts
from it. The stock market can produce patterns that echo through different time frames. All
giving us clues as to what will happen next!

Time Frame ​– Time frames are on a stock chart just showing the price movement for that
time. For example, the 1 minute time frame shows a bunch of 1 minute candles. Multiple
time frames have different strengths and weaknesses.

Elliot Waves​ – Elliot waves are common trending pattern that occurs in the market. This is
based off human psychology and works from analyzing the longer moves compared to the
smaller pullbacks. By finding Elliot waves we can predict movement and magnitude.

Risk to Reward​ – This is where traders find profitability. By planning a trade before hand they
can know if it is worthy of taking. This involves knowing what you are risking and what you
are trying to make. Any risk to reward above 1:2 preferentially 1:3 is a great set up.

Volume Profiles​ – Volume profiles are like daily volume but for each price level, and they
appear on the horizontally right side of the chart. They can be very important to understand
the fundamental concept of the market trying to discover what a fair price is. This battle
between the buyers and sellers can be found on this.

Candlestick Patterns​ – The candlesticks not only tell us what happened that time frame in the
market, but they can also tell us what is going on big picture. Certain candle formations as
well can tell us what exactly will happen tomorrow. Candlesticks are a great place to start
learning the market and what the oscillations mean.

RSI​ – One of the most popular indicators. RSI tells you when the market is a sell or a buy.
Knowing this information can help us enter trades or investments as well as scale out/exit
them.
Creating Thinkorswim/Study​ – If have any skills in programming you can actually program
your own buy or sell signals as well as indicators. This is very easy to do on
thinkorswim/tradingview.

Market Internals​ – These are internal instant information from certain indexes about how
strong or weak the market is. These internals include the advance decline ratios, the tik, and
the VIX. These are great tools to have for day traders because it can show instant strength or
weakness in the market every second.

How to Trade Market Internals on Thinkorswim

MACD Oscillators​ – This is another very common indicator that can tell a trader when a trend
is reversing or beginning. This indicator has a lot going on so it is not the easiest for
beginning traders, but it certainly is one of the favorites.

Moving Averages​ – These are lines on the stock market charts that average a certain number
of past prices. These are very helpful because they can help use find new support and
resistance areas as well as help us gauge current trends. By using these averages we can
learn a lot the market.

Bollinger Bands​ – Bollanger bands show the volatility in a certain stock at any moment, these
can also be seen on the stock charts. They also are great places to enter or exit trades when
prices touches.

Other Great Videos

How to Avoid Pattern Day Trading Restrictions​ – When you are trading in a margin account
and your balance is under $25,000, you will need to be careful of executing 3 day trades
within 5 days. If this happens you will get banned for 90 days. If you want to learn how to
avoid this watch the video.

Types of Buy/Sell Orders and When to Use them

Leveraged ETFS​- These are great ways to use leveraged. These are like buying normal
stocks or indexes except they move 2 or three times as much. Meaning you can make two to
three times as much from trading these. It is important to not hold these for long periods of
time because they constantly decay in value.

Back Testing in Tradingview​ – If you get good enough to the point where you can program
your own indicator you can actually backtest it on tradingview. All this means is that
tradingview will show you if you strategy or indicator actually is profitable from past data.

Will Trading Beat Holding?

Best Time Frame For Trading
How to Scan of ThinkorSwim (Options/Stocks)
Trading In Retirement Account (Best Tax Hack)
How Extended Hours Can Change the Chart!
Thinkorswim Tutorial

Trading Psychology

2 Mistakes Every Trader will Make

How to Lose Money Trading
How to Overcome Your Fear in the Markets

Trading Rules

Day Trading Rules Part 1

Day Trading Rules Part 2
Day Trading Rules Part 3

Best Trading Books

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Rich Dad Poor Dad
All About Market Indicators
Only Options Trading Book You Will Ever Need
Trading In The Zone
Market Wizards
Understanding Options
Technical Analysis
Intelligent Investor

FREE STOCK

Free Courses:

Basics of Trading
Secrets to Trading
Making Money from Indicators
Value Investing like Buffett
Everything Options

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