Trading

Core concepts for placing trades and managing risk — start here before you place your first order.

Order Types & Mechanics

Market Order — An order to buy or sell immediately at the best available price.
Limit Order — An order to buy or sell only at a specified price or better; it may not fill immediately, or at all.
Stop-Loss Order — An order that automatically sells an asset once it falls to a set price, to limit further losses.
Slippage — The difference between an order's expected price and the price it actually executes at, common in fast-moving or thin markets.
Order Book — A live list of an exchange's open buy and sell orders, showing what price levels are stacked at.

Bid / Ask — The bid is the highest price buyers are currently offering; the ask is the lowest price sellers will accept.
Spread — The gap between the bid and ask price; a narrower spread usually means a more liquid market.
Liquidity — How easily an asset can be bought or sold without significantly moving its price.
Trading Volume — The total amount of an asset traded over a given period, often used alongside price to gauge market interest.
Spot vs. Derivatives — Spot trading exchanges the actual asset immediately; derivatives, like futures, are contracts that track an asset's price without you owning it.

Leverage — Borrowed funds used to open a larger position than your own capital would allow, which magnifies both gains and losses.
Margin — The collateral you put up to open and maintain a leveraged position.
Liquidation — When an exchange forcibly closes a leveraged position because losses have eaten through the trader's margin.
Position Sizing — Deciding how much capital to risk on a single trade, usually kept to a small fraction of a total portfolio.
Risk/Reward Ratio — A comparison of how much a trade stands to lose versus how much it stands to gain, used to judge whether a trade is worth taking.

FOMO — Short for 'fear of missing out' — buying into a rally because the price is rising fast, often near a local top.
Overtrading — Placing too many trades too frequently, often driven by emotion rather than a plan, which raises costs and risk.
Revenge Trading — Taking impulsive, oversized trades to try to immediately recover a previous loss, which usually compounds it.
Confirmation Bias — The tendency to seek out information that supports a trade you already made while ignoring signs it was wrong.
No Trading Plan — Entering trades without predefined entry, exit, and risk rules — one of the most common reasons new traders lose money.