Day trader: A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are entered and closed out within the same day.

Position: The amount of a security either owned (which constitutes a long position) or borrowed (which constitutes a short position) by an individual or by a dealer. In other words, it’s a trade an investor currently holds open.

Short: The sale of a security, commodity, or currency with the expectation that the asset will fall in value is defined as ‘Short’. The intention is to buy back at lower prices.

Volatility: A statistical measure of the dispersion of returns for a given security or market index depicts its volatility. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. It must be understood that the higher the volatility, the riskier the security.

Whipsaw: Whipsaw is a condition where a security’s price heads in one direction, but then is followed quickly by a movement in the opposite direction, thus generating frequent Buy and Sell signals. The origin of the term is from the push-and-pull action used by lumberjacks to cut wood with a type of saw with the same name.

Fading: A contrarian investment strategy used to trade against the prevailing trend. “Fading the market” is typically very high risk, requiring the trader to have a high risk tolerance. A fade trader would sell when a price is rising and buy when it’s falling. Also known as “fading”.