Before we start trading together…

We're going to be using certain terminology in the Live Meetups and Chatrooms to explain the setups and how we're managing risk. It’s important that you learn these terms to the point that they become second nature to you.

This way, you'll be able to fully absorb the lessons in real time as we're trading each day.

BTC - Buy to close, closing short position.

BTO - Buy to open, long position.

Buying Calls - long position, gaining money while the stock price rises. These are abbreviated with the letter C in trades posted.

Buying Puts - short position, gaining money while stock price drops. These are abbreviated with the letter P in trades posted.

Buying Stock - Buy To Open stocks or "long" position, earning profit while the stock price rises.

DTE - Days To Expiration of an Options contract.

Earnings/"Lotto" trade - These are trades that Slawek takes near EOD with the goal of being correct on the direction of an earnings move. They're called "Lotto" trades because often the stock moves in your expected direction at the gap resulting in profits, or the stock opens the other way resulting in (calculated) losses.

Entry price - The price where we will initiate a long or short position.

EOD - End Of Day.

Full Position - Full risk per trade; $400 risk for stock or $3,000 for options.

Gap Up - opening price takes place above the previous day's close.

Gap Down - opening price takes place below the previous day's close.

Green Bar Ignored or GBI - If there's a combination of three candlesticks that are red/green/red, and if there's follow-through, then we ignore that middle green candlestick and operate the downtrend or "short".

Half Position - Half risk per trade; $200 risk for stock or $1500 for options.

High Base - A price that the stock moves to and consolidates at, which is higher than previous prices.

HOD - High Of Day.

Imaginary Lines - The "lines" or levels resulting from drawing a Fibonacci retracement from one end to the other end of a move, in order to find potential price targets.

LOD - Low Of Day.

Low Base - A price that the stock moves to and consolidates at, which is lower than previous prices.

Lowering Stop - Bringing the Stop Loss lower in short trades.

Nothing Burger - When a trade doesn’t pan out or the market fails to move, we call this a nothing burger.

Pivot - A candle that shows a change in direction of the stock price. These will often be hammer candles, topping and bottoming tails, sometimes dojis, but they can appear in the form of any type of candle. Pivots are candles that we will regularly base our entry/exit triggers and stops on.

Position Size - The number of shares or contracts for each trade, after calculating the exact amount of money at risk to enter the trade.

For stocks,

$1 at risk times 100 shares = $100 max loss per trade.

50 cents at risk times 200 shares = $100 max loss per trade.

For options, the position size is calculated by percentage of account size:

$50,000 x 6% = $3,000 max loss/trade on options.

Profit Factor / Risk-Reward Ratio:

1:1 ratio: For each dollar I have put at risk in my account, the trade paid me a dollar; for each $100 I have put at risk, the trade paid $100.

2:1 ratio: For each dollar of risk, the trade paid me $2.

3:1 ratio: For each dollar of risk, the trade paid me $3.

…and so on.

Quarter Position - quarter risk per trade; $100 risk for stock or $750 for options.

Raising Stop - Bringing the Stop Loss higher in long trades.

Red Bar Ignored or RBI - If there's a combination of three candlesticks that are green/red/green, and if there's follow-through, then we ignore that middle red candlestick and operate the uptrend or "long".

Reward - The potential amount of profit expected once the trade gets to the target area.

Risk - The amount of capital I am willing to risk in the trade.

Shorting Stock - "Short" position, earning profit while the stock price drops. See also STO.

Simple Moving Average - A Simple Moving Average (SMA) calculates the average of a selected range of prices, usually closing prices, by the number of periods in that range.

Single Bar Ignored = both RBI and GBI could be called like this.

STO - Sell To Open, "short" position. Usually referring to stock trading.

Stop price - The price where we're willing to take a loss.

STC - Sell To Close, closing long position.

Taking Partial - Taking partial profits along the way towards the Target Price.

Target Price - The expected price level where price action can get to on the day.

Trailing Stop - The distance in dollars and cents away from the current stock price acting as a hard stop loss which follows along the open trade.

Watchlist - A selected list of stocks in pre-market for potentially explosive moves up or down.

Trade Post standardization examples

Example 1:"BTO AAPL 180C 10JUN $3.10, stop 176.50 target 182.50"

(Interpretation: Buy To Open an AAPL Call contract of strike price 180, with the expiration date of June 10th for $3.10, stop loss set at the stock price of $176.50, and target set at the stock price of $182.50)

Example 2: "STC AAPL 180C 10JUN $3.50"

(Interpretation: Sell To Close a AAPL Call contract of strike price 180, with the expiration date of June 10th for $3.50)

Example 3:"STO AAPL shares 175.50, stop 177 target 172.50"

(Interpretation: Sell To Open AAPL stock shares at $175.50, stop loss set at $177, target to buy back shares is $172.50)

Example 4:"BTC AAPL shares 171"

(Interpretation: Buy To Close AAPL shares at $171)