Trading glossary
Every metric a trading journal puts in front of you, explained in plain English with a worked example. No jargon, no signup, free to read.
A trading glossary explains the numbers a journal shows you. The ones that matter most are win rate, R multiple, profit factor and expectancy — together they tell you whether your edge is real, and whether your position sizing lets you survive long enough to collect it.
Every term, by what it measures
Trading basics
Position sizing
How many shares or contracts you take, decided by what the trade is allowed to cost you.
Risk per trade
The fixed slice of your account you allow any single position to cost you.
Stop loss discipline
Honouring the exit you set at entry, without widening it once the price argues with you.
R multiples
Your result measured in units of what you risked, rather than in dollars.
Expectancy in practice
What one average trade of a given kind is worth to you across many repetitions.
Win rate vs payoff
How often you win and how much you win are two dials that trade against each other.
Why journaling works
Writing the reason at the moment of the decision is the only way to audit it later.
Revenge trading
Taking a position to win back a loss rather than because the setup is there.
Overtrading
Taking more positions than your edge justifies, usually to stay busy.
FOMO
Entering because the move is already happening and you can’t stand to miss it.
Edge
R ratio (reward-to-risk)
How much you stand to make versus how much you can lose on a single trade.
Win rate
The percent of your closed trades that ended in profit.
Profit factor
Total dollars from winners divided by total dollars from losers.
Expectancy
The average profit or loss you can expect per trade for a given setup or ticker.
Risk
Conviction & thesis
Setup
A repeatable pattern that signals a possible trade.
Thesis
The one-or-two-sentence reason you took a trade.
Debrief
Your honest post-trade review, written once the position is closed.
Conviction grade
A self-assigned label at entry — Core, Tactical, or Probe — that lets you measure later whether your conviction held.
Intended hold
The number of days you planned to hold a position when you opened it.
Behavior & habits
Plan adherence
The share of your closed trades where you held as long as you originally planned — based on the intended hold you set at entry.
Mood
How you felt going into the trade — calm, FOMO, anxious, or frustrated.
Standing order
A one-line rule you write for yourself, in your own words, against a habit your closed trades keep showing.
Mechanics
Long vs short
Long means you profit if price rises. Short means you profit if price falls.
P&L (profit and loss)
Profit and loss — how much money a trade or your account has made or lost. Shown with a sign: +US$120 is a gain, −US$80 a loss.
Unrealized P&L
The paper gain or loss on a position you still hold. It moves with the price and isn’t locked in until you close the trade.
Realized P&L
The gain or loss locked in once you close a trade. Unlike unrealized P&L, it can’t change after the position is closed.
Scale in
Adding to a position you already hold by buying more, which blends your average cost across the entries.
Cost-basis method
The rule for pricing shares sold from a position bought at more than one price. sizeforzero applies weighted-average cost to every account today.
Broker sync
A read-only link to your broker that pulls your fills in automatically, so you stop typing them.
Strike price
The fixed price at which an option lets you buy (a call) or sell (a put) the underlying stock.
Expiration
The date an option contract ends. After it the contract is worthless unless it finished in the money.
Book
All the positions you currently hold, viewed as one portfolio — traders call it their book.
Candlestick
One bar per day: the thick body spans the opening and closing price, the thin wicks reach the day’s high and low.
Break-even
The price this position has to reach for you to walk away flat — your average cost per share.
What is expectancy in trading?
Expectancy is the average dollar result of one of your trades, worked out from your own history: win rate times average win, minus loss rate times average loss. A positive expectancy means the maths is on your side over a long run of trades.
What is an R multiple?
R is the distance between your entry and your stop — the money you decided to risk. An R multiple expresses the result of a trade in units of that risk, so a trade that made three times what you risked is a 3R win, whatever the dollar size.
What is profit factor?
Profit factor is the total dollars from your winning trades divided by the total dollars from your losing trades. Above 1.0 means you made more than you lost. It reads the same whether you trade in hundreds or in tens of thousands.