What does SSR mean and what is a poppity open and dump here are all the lingo sub beginner traders need to understand in order to fast-track your learning if you're a new trader thinking of getting into trading, it's extremely important to start with a solid foundation that Includes creating a good trading routine risk management and understand that becoming profitable will take months and years. This definitely no fast Lamborghini money in trading. So in order to do so, we must have a solid understanding of all the day trading jargons. What is a heavy poling price action and what does ETP and SSR mean, and how do they contribute to a short squeeze so by the end of this video, you understand the fundamental terms in trading as well as the more complex and advanced terms.

The experienced traders use and don't worry, there'll be plenty of bad jokes, sprinkled throughout the entire video to make it entertaining. As long as you remember to drop a like on the video doing so will make my bad jokes a little bit, funnier, just just a little bit dull. So that starts with the basics: first longing and shorting. What does that mean? Loneliness stock means you're buying a stock and you're Betty.

Another stock price is gon na, go higher and going short means, boring shares from your broker to sell meaning you're betting on the stock price dropping lower, and you would then profit from the difference. So let's say you short a stock, i five dollars and ten minutes later the stock drops to two dollars. You will then buy the stock back at two dollars. Doing so is called buying to cover your covering your short position.

Your profits will be three dollars now that the stock has dropped, according to your plan, make sure to donate three dollars to my lamborghini fund. Now technical analysis is a study of a stock's historical price movements on a chart and you will draw the stock support and resistance levels and other indicators for you to define a trend of a stock and make predictions of future upside or downside. You're. Not taking consideration of a stocks, earnings p/e ratios in the sectors that will be considered fundamental analysis now support level.

What exactly is this magical support line? They have talked about so many times to buy a support. A support level is a theoretical price line that the stock has bounced off repeatedly many times in the past. So you will see that the stock has dropped to this price level and reverses direction going back higher, because in the past, buyers came in to buy the stock at this lower price resistance level will be the opposite of a support. These are price levels that historically sellers came in to sell the stock, so you would see that the stock has had difficulty going above this resistance price level multiple times in the past.

Now very important, though, a support and resistance are literally just a price level. Nothing more: it's not a secret line that bounces off there's no secret sauce in finding the right support or the right resistance, and just because the stock has bounced off the support level in the past does not guarantee that it's gon na do the same again and Again same as resistance, all these price levels, such as theoretical and based on the stock's past performance. Next, what is a breakout? What is this easy, simple pattern that everyone is banking on in the DVDs? A breakout is when there's a sudden surge of pimples and acne on my face, because I don't sleep enough, because I wake up at 4 a.m. every day like right here.

A breakout is when a stock is being bit up by the buyers in a stock price. Is being pushed above, the previous resistance levels often will see a breakout creating a new high of the day price, which we abbreviate in training as h, OD now for every single successful breakout out there, there is a fake out. A fake out is when a stock breaks above a previous resistance for like 10 cents or 20 cents, and really quickly pull back down. We also sometimes call that a pop right, because you see the candlestick popping for like a second or two seconds and really quickly slam back down and sometimes if the stock is a low flow to penny stock, it will pull back a lot further and quickly.

Dump now what is a dump? A dump is something you do when you're making millions of dollars they each maybe come between it. Just to be clear, while I do not own a Lambo, I do own two toilets, so I'm rich a dump is a term that the a traders use to describe a specific selling price action a lot of times when we see a fake-out happen in penny stocks. I get described earlier, the stop will be pushed down was sold off extremely aggressively. That means there are many big sellers who want to get out of the stock.

That's what we call a dump. Some similar terms that you see many traders use to describe the same price action are, washes heavy and pull again. If a stock is being dumped, it seems like someone is pulling the stock down right and it's almost like the price is being washed off like water. That means the selling is very heavy.

Often that kind of heavy selling price action could lead a stock to drop into a new low of the day which we abbreviate as LOD, meaning the stock price is decreasing to even lower than any of the previous marks on the day. Now, if you've been following this channel for a while, you know I talked about low flow to penny stocks. A lot. A low flow stock is a kind of stock that has less than 5 million shares.

Generally speaking, that can publicly-traded oftentimes. That means a stock would be extremely volatile because it really doesn't take much buying volume to in order to move the stock, 50 percent or even more than hundred percent. Well, I do trade low float, penny stocks. I also trade, many mid-cap and large cap stocks as well.

Where represents a better opportunities, but if you a new trader, trying to build your small account, then trading, mid caps and large caps might be a better option for you. I have a video for you to check that out in detail now, every time there's a low float penny stock, going 100 %, 200 %, there's always a lot of people wanting to short it and betting on the stock going down in order to short a stock. Like we talked about earlier, you need to have shares to borrow from your broker, but if a penny stock is hard to borrow htb, then you'll be hard for you to find the stocks too short, and vice versa. If the penny stock is ETB easy to borrow, that means there's plenty of shares available out there for everyone to borrow short with most brokers out there, such as interactive brokers, thinkorswim quest trade and a trade a lot of times when a penny stock runner is ETB That can actually cost a stock to go even higher, because if everyone out there has shares available too short and are trying to short it, yet they continue to be buying volume coming in to bid the stock up.

The short sellers have to buy to cover, like we talked about earlier, which will add to the buying volume for the stock and make a stock price going even higher. This is what we call a short squeeze, so that means, if we see a low float, penny stock, gapping up 50 % pre-market and the stock is actually easy to borrow. You might want to be careful if you are trying to short it. The better play might be to go long instead.

Another factor that could lead to a short squeeze as SSR short, sell restriction. This is a rule implemented by the SEC if any stock being smoked. A penny stock, aqua, mid-cap and large-cap drops below 10 % of the previous day close price when the SSR will be triggered. This rule means that short sellers cannot add to a selling pressure by selling on the bid they will have to short on the ask, meaning naked only go short if their buyers bid in the stock up to buy a very simple way to calculate what price the Stock has to drop to in order to trigger SSR.

Is this formula previous day, close price multiplied by 0.9? So if the stock you're looking at close that $ 10 the previous day, then the triggered price for SSR would be nine dollars. And yes, I did just use a calculator for that simple calculation, not all Asians, are good at math. You know it's important to know that SSR does not directly lead to a short squeeze. It's only a contributing factor.

If there's a lot of fresh buying volume coming into the stock to buy it up now, let's talk about the red to green move when a stock is trading below the previous day closed price. That means the stock is down on a day or read on the day, but let's say some buying volume came into the stock. That's down on a day in a stock price is being pushed above the previous day closed price. That means the stock has gone from bread to going green on the day, so that's the red to green walls.

But of course the green to red move will be the opposite of what I've just said. A lot of times when a red to green move is successful, meaning a stock actually stays above the previous day closed price, that's a psychological trigger for many buyers to come in and bid a stock up. This kind of setup is well my favorite long setups, because the risk reward is greater than one two three. Now we must talk about risk, reward and risk management, which is perhaps the most important concept to understand and practice in day trading before we enter a trade long or short, we must assess both the upside and the downside.

Part of that means yes, thinking about where the stock can possibly go to. So maybe the stock is trading at five dollars right now and you think it can go to six dollars. That's great and all, but most beginner traders just stop right. There there's so many marketing out there that promotes making big money fast and working one hour a day and making millions of dollars trading from anywhere in the world.

What ends up happening is the sort of unrealistic view of day trading creates a lot of FOMO fear of missing out, and that needs a lot of new traders to jump in to buy every single stock. That seems to be going to the moon, but they often overlook the downside where the stock price can drop to if their plan was wrong or if they didn't have a plan at all, because they were following chatroom alerts. So that's a that same $ 5 stock. Can drop down to $ 2 if the plan was wrong, that means you're risking $ 3 in order to make $ 1 on the upside.

That's not good risk reward ratio. The best risk reward to aim for in trading is to risk $ 1 to potentially make $ 3. Well, not every single setup. We'll give you that one two three risk reward.

You definitely would want it to be better than one two one, having good risk reward on every single one of your trades as part of a good risk management. Risk management means that you have calculated a downside, how much money you could lose and actually carry that out if you're wrong, meaning that you actually stopped out when a stock is dropping beneath a predetermined risk level. So that's a that five dollar stock drops to $ 2, and that was your risk level. You should carry out with your original plan and stopped out of that position for a loss and that $ 2 mark will be your stop-loss.

It's important to have proper risk management and cut your loser when you're wrong, because otherwise you might become a bag holder. A bag holder is someone who is holding on to a losing position for way too long, sometimes for days, weeks, months or even years. Instead of cutting a loser's at $ 2, according to the original plan, the trader will keep a hold into that position, hoping that one day the stock will go back to $ 5 hold and hope kills in day trading, because, unfortunately, many times these penny stocks will Keep on diluting down from $ 1 to $ 0.50 and all the way down to single digits in pennies I'll, be the first to admit that I've done that many times in the past before and that's what led me to blowing a few of my trading accounts When I first started now that you know the meaning behind most of these day trading lingos out there, you have a better understanding when you watch my day trading strategy - and we can recap - videos, I'm sure, there's more trading jargons out there that I missed. So if I'd missed anything, let me know in the comment section below and I'll do my best to answer.

If this video helped you out, please remember to drop a like and subscribe. Thank you guys for watching. As always, and the humble trader and I'll see you guys next week.