Q. “Timon, I am committed to trading this year. However, I have noticed that the industry is filled with a lot of acronyms and abbreviations that I am not familiar with. For example, I have come across terms such as ATH, JBTD, OTC, FOK, and GTC. I am unsure of what they mean. Can you provide me with a quick list of commonly used acronyms and abbreviations in the trading industry so that I can use it as a reference and look up when I encounter these terms in the future? It would be greatly appreciated.”

A. The funny thing is when I first started trading between 2003 – 2011, the acronyms were few and easy to remember.

Now you need a whole dictionary of them to see what they all mean. This is a fantastic idea though and I’ll be happy to share the ones I know and have seen over the years.

Here are 27 trading acronyms to save and apply to your trading. I’ve also listed them in alphabetical order to make it easier to spot!

  1. ATH – All Time High
  2. ATM – At the Money
  3. ATR – Average True Range
  4. BB – Bollinger Bands
  5. B/O – Breakout
  6. Be – Bearish
  7. BE – Break even
  8. BOS – Break of Structure
  9. Bu – Bullish
  10. CFD – Contract for Difference
  11. DD – Drawdown
  12. DMA – Direct Market Access
  13. EMA – Exponential Moving Average
  14. E/R – Earnings Report
  15. ETF – Exchange Traded Fund
  16. FA – Fundamental Analysis
  17. FOMC – Federal Open Market Committee
  18. FOK – Fill Or Kill
  19. FX – Foreign Exchange (Forex)
  20. GTC – Good ‘Til Cancelled
  21. HH – Higher High
  22. HL – Higher Low
  23. HOD – High of Day
  24. HFT – High Frequency Trading
  25. HTF – Higher Time Frame
  26. ICO – Initial Coin Offering
  27. IPO – Initial Public Offering
  28. ITM – In the Money
  29. JBTD – Just Buy the Dip
  30. LH – Lower High
  31. LL – Lower Low
  32. LOD – Low of Day
  33. L/S – Long or Short
  34. LTF – Lower Time Frame
  35. MA – Moving Average
  36. MACD – Moving Average Convergence Divergence
  37. MS – Market Structure
  38. OI – Open Interest
  39. O/N – Overnight
  40. OTC – Over the Counter
  41. OTM – Out The Money
  42. NFP – Non Farm Payrolls
  43. P&L – Profit and Loss
  44. PIP – Percentage In Point
  45. PRE – Pre Market
  46. R/R – Risk / Reward
  47. RSI – Relative Strength Index
  48. S/R – Support and Resistance
  49. SL – Stop loss
  50. TA – Technical analysis
  51. TF – Time Frame
  52. TP – Take profit
  53. YTD – Year To Date

These are the main ones I can come up with and I’m sure there are a few more. But as a starting point, have these written down somewhere and keep it close to reference.

Save this list and keep it growing!

Q. “Hi Timon I have R10,000 I want to subscribe to your Red Hot Storm Trader. Is it enough to start with? Also I want to know how much should I risk per trade with my R10,000 and how much profit can I expect if the trade is a winner”

A. Great question!

Let me start off my saying. I think R10,000 is a great starting point.

Reason #1: Affording the margin and margin calls

You’ll be able to buy a number of shares at any one time. CFDs on some stocks cost as little as R10 up to R1,000 to buy the CFD on a share on the JSE.

Reason #2: Spread your risk

With R10,000, you will have sufficient margin to be able to place more than one trade at any given time This helps to spread the risk in case a trade goes against you.

Reason #3: Costs…

With R10,000 you’ll be able to pay brokerage and daily interest charges fairly easily on most local trades.  Of course, not every trade would be available to you – for instance the costs to trade oil require a much bigger account.

Reason #4: An opportunity to learn to manage your risk

With the right guidance, rules and information, this is a reasonable starting capital to grow your account in the medium to long term.

Just to give you an example when I send a trade idea to my Red Hot Storm Trader members I encourage them to use a Risk to Reward of 1:2.

What this means is…

Every 1 rand I risk in my trade, I could make R2 – if the trade went in my direction.

So, with a R10,000 account, I would risk R200 in order to make R400.

As your portfolio grows from R10,000 to R20,000, R30,000 and even 100,000 the risk to reward should remain the same.

But instead of risking R200 to make R400…

With a R100,000 account that you’ve built, you’ll risk R2,000 in order to make R4,000.


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