Scalping Glossary

Ask: The lowest price a seller is currently willing to accept. You buy at the ask.
ATR (Average True Range): The average size of a bar's true range over a set lookback, typically 14 bars, where true range accounts for gaps by taking the largest of the current high-to-low, the gap up from the prior close, or the gap down from it. Rises as volatility expands and falls as it contracts; used to size stops and targets so they scale with how much the market is actually moving instead of a fixed tick count.
Bid: The highest price a buyer is currently willing to pay. You sell at the bid.
Bid-Ask Spread: The gap between the bid and the ask. On a scalp targeting a tiny move, the spread can eat a serious chunk of the profit before commission.
Bollinger Bands: A volatility band plotted a set number of standard deviations above and below a moving average. The bands widen as volatility expands and narrow as it contracts, the read a squeeze breakout setup is built around.
Breakout: Price moving decisively outside a prior range or level, usually on a jump in volume that confirms actual participation behind the move.
Candlestick: A chart element showing the open, high, low, and close for a given time period. The body is the open-to-close range; the wicks show the high and low.
Centerline: The midpoint line of an oscillator like RSI, typically the 50 mark. Holding above it during an uptrend, or below it during a downtrend, is read as the trend still in control; a clean break back through it is read as a shift.
Coil: A run of consecutive bars overlapping inside a narrow band instead of trending. A looser, indicator-free cousin of the Bollinger squeeze: no bands required, just bars that stopped extending the range.
Commission: The fee a broker charges per trade. Small on its own, but it adds up fast at scalping frequency and needs to be priced into every setup.
Compression: The shrinking bar-to-bar range that forms a coil or a squeeze. Read as a market building energy for its next directional move rather than losing interest.
Cumulative Delta: A running total of buyer-initiated volume minus seller-initiated volume, built trade by trade off the tape. Rising alongside price confirms a move; price pushing to a fresh high or low without a matching move in cumulative delta is read as a warning the push lacks the aggressive participation it appears to have.
Decision Fatigue: The drop in judgment quality that comes from making too many trading decisions in a row. Shows up late in a session as sloppier entries and worse stop placement, not as any obvious signal that it's happening.
Depth of Market (DOM): Also called Level 2. A live view of the buy and sell orders stacked at each price level above and below the current price.
Divergence: Price and an indicator like RSI disagreeing. Price prints a new high or low that the indicator doesn't confirm, read as a warning that the move is running low on the momentum that started it.
Drawdown: The decline in account value from a prior peak, usually expressed as a percentage. A key number for judging whether a risk plan is actually being followed.
E-mini: A CME futures contract sized at a fraction of its original full-size version, built to be more accessible to individual traders. ES, the E-mini S&P 500, is the most actively traded of the group.
Execution: The act of an order actually being filled. Execution speed and reliability matter more in scalping than in almost any other trading style, since delays directly cost money.
Fade: Trading against the current short-term move, typically betting on a reversion back toward an average like VWAP.
Failed Breakout: Price pushes outside a range or level, then closes back inside it. The break didn't hold. Some systems trade the failure itself, fading back the other way.
Failure Swing: An RSI-specific pattern: the indicator dips past an extreme, bounces, pulls back but holds short of that extreme a second time instead of re-testing it, then breaks the high or low set on the bounce. The failure to reach the extreme again is the signal, not the price bar by itself.
Fill: The price at which an order actually executes. Can differ from the price you expected, especially in fast markets. See Slippage.
Futures Contract: An agreement to buy or sell an asset at a set price on a future date, traded on margin through a futures broker instead of owned outright like a stock. An index future like ES settles in cash rather than physical delivery.
Globex: CME's electronic trading platform, open nearly 24 hours across the trading week with one short daily maintenance break. Index futures like ES trade on it well outside regular stock market hours.
Hard Stop: A stop-loss order resting on the exchange itself, not a mental stop you're planning to act on manually. Only one of these protects you when things move fast.
High Volume Node: A wide band inside a volume profile where a large amount of volume built up over many bars, the closest thing the profile has to an agreed-on fair price for that stretch. Price returning to one tends to slow down or reverse.
Hotkey: A keyboard shortcut mapped to a specific order: buy, sell, flatten, cancel all. Standard tooling for anyone trading at scalping speed.
Imbalance: A single price level where aggressive buy volume or aggressive sell volume badly outweighs the other side, read off a footprint chart or a depth-of-market ladder. One level rarely means much by itself. Several in a row in the same direction is a different signal entirely.
Level 2: See Depth of Market. The order book showing bids and asks stacked away from the current price.
Limit Order: An order to buy or sell at a specific price or better. Guarantees the price, not the fill.
Liquidity: How easily an instrument can be bought or sold without moving the price. Scalping needs high liquidity; thin liquidity means wide spreads and bad fills.
Liquidity Sweep: A brief push through an obvious swing high or low that triggers the stop orders resting past it, followed by a reversal back the other way. Also called a stop run. The traders who got stopped out supplied the volume for the move that followed.
Low Volume Node: A thin band inside a volume profile where very little volume traded, usually because price moved through it fast on the way to somewhere else. Acts more like open air than support or resistance.
Market Order: An order to buy or sell immediately at the best available price. Guarantees the fill, not the price.
Mean Reversion: Trading on the bet that price has stretched too far from a reference point, usually VWAP or a moving average, and is due to come back toward it. The opposite bet from momentum.
Micro Pullback: A shallow, one or two bar pause in a stock that's already trending hard, bought directly instead of waiting for a deeper retracement that may never come.
Momentum: The speed and strength of a price move. High-momentum moves are the basis of breakout and open-drive scalping.
Momentum Ignition: A sudden, sharp volume spike with no gap and no level break behind it, where price moves fast in one direction and holds most of the move on the bars right after. Also called a volume spike setup.
Multi-Timeframe Analysis: Reading direction off a higher timeframe chart, then dropping to a lower timeframe to time the actual entry. The bigger chart picks the side; the smaller one picks the moment.
Opening Range: The high and low set during the first stretch of the trading session, often the first fifteen to thirty minutes. A common reference box for breakout systems.
Order Flow: The live stream of buy and sell orders hitting the market. Reading order flow means watching those orders directly instead of relying only on candlestick patterns.
Overbought/Oversold: Shorthand for an oscillator like RSI sitting past a stated extreme, commonly 70 for overbought and 30 for oversold. Flags a stretched condition, not an automatic reversal; a strong trend can hold an oscillator pinned past the line for many bars in a row.
Overnight Range: The high and low a nearly-24-hour instrument like an index future prints between the prior day's cash close and the next cash open. A level that forms hours before most stock traders are even watching.
Pivot Point: A support and resistance level calculated once before the session opens from the prior day's high, low, and close. Stays fixed on the chart all day until the next session's numbers replace it.
Point: One full unit of index movement, worth a different dollar amount per contract depending on the futures product. On ES, a point is $50 (a tick, a quarter of a point, is $12.50). On NQ, a point is $20 (a tick is $5), the same tick size as ES with a smaller dollar figure behind it. On RTY, a point is $50 again, matching ES, but the tick is a finer 0.10, worth $5, the same tick value as NQ despite none of the other numbers lining up.
Point of Control: The single price with the most volume traded in a volume profile. The center of whatever balance area the profile covers, which might be today's session, a prior day, or any other defined window.
Position Size: The number of shares, contracts, or units taken on a trade. Should be derived from your dollar risk and stop distance, not from gut feel.
Prior Day High/Low: The high or low printed during the previous session. Unlike an intraday level, it's visible on every chart before the market even opens, which is exactly why it tends to draw a crowd.
Psychological Level: A round number, like a whole dollar amount, that attracts resting orders because it's easy to remember and easy to type into an order ticket, not because of anything structural in the chart.
Range: A period where price oscillates between a defined support and resistance level instead of trending.
Relative Strength Index (RSI): A momentum oscillator scaled 0 to 100, comparing the size of recent up-closes to recent down-closes over a set number of bars. Used to flag stretched, overbought, or oversold conditions rather than to time entries by itself.
Relative Volume (RVOL): A bar's own volume divided by what that same bar normally trades. An RVOL of 2.0 means a bar traded twice its usual amount, the basis for volume-confirmation setups.
Retest: Price returning to a level it just broke through, to see whether that level holds in its new role, support that used to be resistance or the reverse.
Revenge Trade: Re-entering a setup right after it stops you out, sized bigger, trying to win back the loss instead of waiting for the next valid signal. One of the fastest ways to turn one bad trade into three.
Risk/Reward Ratio: Distance to your target divided by distance to your stop. A 1:2 ratio means you're risking one dollar to potentially make two.
Scalping: A trading style built around taking many small, fast profits rather than a few large ones, usually holding positions from seconds to a few minutes.
Session: A defined trading window tied to a specific market's hours: Tokyo, London, New York. Volume and volatility vary sharply by session.
Slippage: The difference between the price you expected and the price you actually got filled at, most common during fast moves or low liquidity.
Spread: See Bid-Ask Spread.
Squeeze: A stretch where Bollinger Bands narrow to the tightest width of the session, showing volatility has compressed. The breakout out of a squeeze tends to carry more follow-through than a breakout out of a normal, wider range.
Standard Deviation Band: A line plotted a set statistical distance above and below VWAP. Price spends most of a session between the bands; a push outside one is the setup a VWAP reversion system is built to catch.
Stop Run: See Liquidity Sweep.
Stop-Loss: An order that closes a position automatically once price hits a defined level, capping the loss on the trade.
Tape Reading: Watching the time and sales feed, the live record of executed trades, to judge buying and selling pressure as it happens.
Tick: The minimum price movement an instrument can make. Also used loosely to mean "a single price update."
Tight Trading Range: A trading range so narrow relative to normal bar-to-bar noise that the range itself isn't worth trading, even though price is still technically bouncing between a top and a bottom. Related to a coil, but a coil is a setup, usually short-lived and read as energy building toward a breakout. A tight trading range is a verdict about the whole stretch of chart in front of you: stand aside until it resolves into something with an actual edge.
Tilt: Trading from frustration or adrenaline instead of the plan. Oversized positions, chasing a dollar number, re-entering a setup that just stopped you out. The fix is a rule you follow before you notice you're on tilt, not one you try to remember in the moment.
Time and Sales: A live, scrolling record of every executed trade: price, size, and time. The raw material of tape reading.
Trend: A stretch of chart making higher highs and higher lows (a bull trend) or lower highs and lower lows (a bear trend), where pullbacks against the direction stay shallow and hold before the next push. The opposite state from a trading range, and the two are the two defaults: a market is trending, ranging, or in the short, undecided stretch between one and the other.
Trendline: A diagonal line drawn through two or more swing highs or swing lows, marking a trend's own slope rather than a fixed horizontal price. Subjective by nature: the two most obvious touch points before a break are the ones worth trusting, not a line redrawn afterward to fit what happened.
VWAP: Volume-Weighted Average Price. The average price an instrument has traded at so far in the session, weighted by volume at each price. A common reference point for reversion setups.
Value Area: The price range holding a set share of the volume in a volume profile, usually around 70%, bounded by a value area high and a value area low. Price inside it is where the market spent most of its time; price outside it moved through fast.
Volume: The number of shares or contracts traded in a given period. Confirms or contradicts whatever the price chart appears to be doing.
Volume Climax: An outsized volume spike, several times the average, that pushes price to a fresh extreme and then gives most of it back. Reads as exhaustion, not the start of a new leg.
Volume Dry-Up: A sharp drop in volume right after a strong move, usually during a shallow pause. Thin trading on its own is not a warning. Sometimes it just means the other side stepped away instead of stepping in.
Volume Profile: A histogram of volume traded at each price, plotted beside the candles instead of below them. Built from a session, a prior day, or any other defined window, and read for its point of control and value area rather than for shape the way a price chart is.
Whipsaw: Rapid, choppy price movement in both directions that stops out trades on both sides of a move. Common during low-liquidity or news-driven conditions.