Trading glossary: stop loss, drawdown and more

Glossary

Every term in the guide, explained in one or two sentences.

ATR: Measures how much price moves per candle, on average.; A high ATR means a busy market and a low one, a quiet market. It lets the stop loss adapt to volatility.
Break even: Moving the stop loss to your entry price.; It kicks in once the trade has moved in your favor. If price comes back, you exit without a loss, not counting commissions.
Daily cap: The maximum number of trades opened in a day.; It resets when a new day starts, according to Reinicio del ciclo. There's also a per-window cap, counted separately in each window.
Daily loss (drawdown): How far your balance can drop in a day or overall.; Your prop firm usually sets a daily limit and an overall one. Set your risk to stay well clear of both.
OCO order: Two linked orders: when one fills, the other is canceled.; The indicator uses it to wait for a buy and a sell at the same time. When price touches one, the opposite one disappears.
Pending order: An order that waits at a price until the market touches it.; If price doesn't get there, the order doesn't fill. Outside your time window, pending orders are pulled.
Prop firm: A company that lets you trade its money if you follow its rules.; Your firm usually requires a maximum daily loss and trade limits. If you break a rule, you can lose the account.
R: The distance between your entry and your stop loss.; 1R is what you lose if the stop loss is hit. A 2R take profit wins twice what you risk.
Reversal: The point where price changes direction.; The indicator looks for reversals to decide where to enter and where to place the stop loss. Depth and confirmation decide which move counts as a reversal.
Stop loss (SL): The order that closes the trade at a loss if price goes against you.; It sets how much you can lose on each trade. The position size is calculated from its distance.
Take profit (TP): The order that closes the trade at a profit when price reaches a level.; You can set it in R or at a fixed distance. It has the same name in TradingView.
Tick: The smallest move a symbol's price can make.; Each symbol has its own tick. Measuring in ticks makes a setting behave the same across different symbols.
Time window: The span of hours when the indicator can open trades.; It's written with an arrow, like 20:00 → 03:00, and read in your time zone. Outside it, no new trades open.
Timeframe: The time each candle on the chart covers.; On 5 minutes, each candle sums up five minutes of price. Short timeframes give more signals and more noise.