Trading

21 concepts in this category.

• Market Order

  A market order says 'buy this stock right now at whatever price it's selling for.' You get filled immediately but might pay slightly more than you expected, especially for less liquid stocks.

• Limit Order

  A limit order says 'buy this stock, but only if the price drops to $50 or less.' You control the price but risk not getting filled if the stock never hits your target.

• Stop Order

  A stop order is your automatic exit. Set a stop at $45 on a $50 stock — if it falls to $45, your order triggers and sells at market price. It protects you from bigger losses but can fill below $45 in a fast-moving market.

• Stop-Limit Order

  A stop-limit order sets two prices: a trigger ($45) and a limit ($44). When the stock hits $45, it tries to sell, but only at $44 or better. Safer on price, but if the stock crashes past $44, you don't get out at all.

• Fractional Shares

  A share of a high-priced stock can cost several hundred or several thousand dollars. Fractional-share trading lets an order be sized in dollars instead of whole shares — $100 of a $1,000 stock buys one-tenth of a share — making it possible to fully invest a fixed budget regardless of what a single share costs.

• Buying Power

  Buying power is how much you can trade with right now. In a cash account, it's your available cash. In a margin account, it can be 2× your cash because the broker lends you money to buy more.

• Time in Force

  Time in force tells the broker how long to keep trying. 'Day' means cancel at market close if unfilled. 'GTC' (Good Till Cancelled) stays open indefinitely. 'IOC' (Immediate or Cancel) fills what it can right now and cancels the rest.

• Paper Trading

  Paper trading lets you practice investing with imaginary money. All the real market data, all the real mechanics, but no real money at stake. Perfect for testing strategies before risking your actual savings.

• Live Trading

  Live trading uses your real money with a real broker. Unlike paper trading, every order affects your actual portfolio balance. Requires a connected broker account and compliance checks.

• Order Status

  After placing an order, it goes through stages: pending (just submitted), open (waiting to fill), partial (partly filled), filled (complete), or cancelled. You can monitor these in your order history.

• Bid-Ask Spread

  The bid is what buyers will pay; the ask is what sellers want. If the bid is $99.95 and the ask is $100.05, the spread is $0.10. Every time you trade, you pay this spread as a hidden transaction cost.

• Slippage

  You see a stock at $50 and hit buy. By the time your order fills, it's $50.08. That $0.08 is slippage — the price moved between when you decided to buy and when the order actually filled.

• Market Hours

  US stock markets are open Monday–Friday, 9:30 AM – 4:00 PM ET. There's also pre-market (4 AM – 9:30 AM) and after-hours (4 PM – 8 PM) trading, but with much less volume and wider spreads.

• Trailing Stop

  A trailing stop follows your stock's price upward. If the stock rises from $100 to $150, a 15% trailing stop moves from $85 to $127.50. If the price then drops to $127.50, it triggers a sell — locking in a $27.50 profit instead of riding it back down. The stop only moves UP, never down.

• Extended Hours Trading

  Extended hours lets you trade before and after the regular session. But there are far fewer buyers and sellers, so prices can swing wildly. Limit orders only — market orders are typically not allowed in extended hours.

• Day Trading

  Day traders buy and sell within the same day, never holding positions overnight. The SEC requires a minimum $25,000 account for pattern day traders (4+ round trips in 5 days). High skill, high risk, most beginners lose money.

• Stop-Loss Order

  A stop-loss is a standing order that says 'if this stock drops to $X, sell it automatically.' It's your safety net — it limits how much you can lose on any single position. Set it when you buy, and if the market turns against you, the stop-loss fires before things get worse.

• Take-Profit Order

  A take-profit order is the opposite of a stop-loss: it automatically sells when the price reaches your target level. If you buy at $100 and set a take-profit at $130, the platform sells for you when the price hits $130 — no need to watch the screen all day.

• Win Rate

  If you made 100 trades and 60 of them made money, your win rate is 60%. But here's the trick — a 40% win rate can still make you rich if your winners are much bigger than your losers. Win rate alone doesn't tell the full story.

• Profit Factor

  If all your winning trades added up to £3,000 and all your losing trades added up to £2,000, your profit factor is 1.5. It means for every £1 you lost, you made £1.50. Above 1.0 = making money. Below 1.0 = losing money. Simple as that.

• Total Trades

  This is simply how many times the strategy bought or sold something during the test. More trades means the strategy is more active (like a day trader), fewer means it's more patient (like a buy-and-hold investor). There's no 'right' number — it depends on the strategy.