A plain-language starter glossary, built around the fundamentals Kira Engineer flagged as essential. It will grow over time.
Trade size (position size) - How much of an instrument you buy or sell in a trade (e.g. lots). It should be calculated from how much you're willing to lose if the stop is hit, not chosen at random.
Risk-to-reward ratio (R:R) - The size of your potential loss compared to your potential gain. A 1:3 R:R means you risk 1 to aim for 3.
Leverage - Borrowed exposure that lets you control a larger position than your deposit. It magnifies both gains and losses, so it increases risk as much as opportunity.
Margin - The portion of your balance set aside as collateral to open a leveraged position. Using too much margin leaves little room for the market to move against you.
Risk management - The process of deciding, before entering, how much you can lose and how you'll limit it - through position size, stop losses, and limiting how many positions you hold.
Stop loss (SL) - A predefined price where you exit a losing trade to protect your capital. It defines the trade's risk before you enter.
Drawdown - A drop in your account from a previous peak. Smaller, controlled drawdowns are easier to recover from.
Prediction vs confirmation - A prediction is where you expect price to go; a confirmation is evidence from the market (a structure break, rejection, volume) that the move is happening. See Prediction vs Confirmation.
Trendline - A line drawn along a series of highs or lows to visualise direction and areas where price has reacted before. A guide, not a guarantee.
Fear and greed - The two emotions that most often push traders off their plan - fear causing early or missed entries, greed causing oversizing and holding too long. Managing them is part of risk management.
Educational content only - not financial advice.