A reference guide to common trading terminology used across The Prop Pit platform and the broader trading industry.
| Term | Definition |
|---|---|
| Ask | The lowest price a seller is willing to accept for an asset. |
| Bid | The highest price a buyer is willing to pay for an asset. |
| Candlestick | A chart type showing open, high, low, and close prices for a time period. |
| Day Trade | A trade opened and closed within the same trading session. |
| Drawdown | The decline from an account's peak value to its lowest point. |
| Fill | When an order is executed and becomes a position. |
| Leverage | Borrowed capital that amplifies both gains and losses. |
| Liquidity | How easily an asset can be bought or sold without affecting its price. |
| Margin | The collateral required to open and maintain a leveraged position. |
| P&L | Profit and Loss — the net result of your trading activity. |
| Requote | When a broker offers a different price than the one you requested (we don't do this). |
| Slippage | The difference between expected and actual execution price. |
| Spread | The difference between the bid and ask price. |
| Stop-Loss | An order that automatically closes a position at a specified loss level. |
| Trailing Stop | A stop-loss order that moves with the market price. |
| Volatility | The degree of price variation over time. |