The Most Important trading acronyms and abbreviations you NEED to know in 2023!

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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