Not knowing basic terminology is the main reason beginners feel lost on their first encounter with a trading platform. Articles about strategies and indicators are written assuming the reader already understands the core concepts. This glossary closes that gap, covering the terms a trader runs into during the first week on Pocket Option.
Core trade concepts
Expiration is the time after which a trade closes and the result is fixed. Expiration can range from 30 seconds to several hours, depending on the chosen timeframe.
CALL and PUT are the two forecast directions: CALL is a bet that the asset's price will rise by expiration, PUT is a bet that it will fall. This is not buying or selling the asset itself, just a forecast of price direction.
Strike price is the asset's price at the moment the trade is opened, against which the result at expiration is measured: above the strike means a profit on CALL, below it means a profit on PUT.
Price-related concepts
Spread is the difference between the buy and sell price of an asset at a given moment. The higher the spread, the more expensive it is for a trader to enter a trade.
Volatility is the degree and speed of an asset's price change over a given period. High volatility creates more trading opportunities but also more risk of misjudging direction.
Range market (flat) is a market state where price moves within a narrow band without a clear up or down trend. Trading a range market requires different strategies than trading a trending one.
Trend is a sustained directional price move, up (bullish) or down (bearish), over a noticeable period of time.
Technical terms
Timeframe is the time interval represented by a single candle on the chart: 1 minute, 5 minutes, 1 hour, and so on. More detail on choosing one is covered in a separate article on timeframes in trading.
Indicator is a mathematical tool based on price and volume that helps assess market conditions: trend strength, overbought/oversold levels, reversal points.
OTC asset (Over-the-Counter) is an off-exchange asset available for trading on weekends, when classic exchanges are closed.
Money management terms
| Term | Meaning |
|---|---|
| Deposit | The amount of funds on a trading account |
| Trade size | The share of the deposit risked on one trade |
| Drawdown | A decline in the deposit from its peak value |
| Martingale | A strategy of increasing the stake after a loss |
| Money management | A rule system for allocating capital across trades |
Psychological terms
Overtrading is placing an excessive number of trades, often driven by a desire to win back a loss quickly or by excitement after a winning streak. This topic is covered in more detail in the materials on trader psychology.
Emotional trade is a decision to open a position made not from a signal or analysis but under the influence of fear, greed, or frustration after a loss.
Conclusion
Knowing basic terminology saves time when studying strategies and indicators: instead of figuring out the words, you can dive straight into the substance of the method. Keep this glossary handy during the first weeks of trading and come back to it whenever you run into a new term in other articles in this section.