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Futures trading glossary
The words you will hear on day 1, in plain English. 49 terms, A to Z.
A
Ask
The lowest price a seller will accept right now. Buying at market fills at the ask.
B
Bid
The highest price a buyer will pay right now. Selling at market fills at the bid.
Bracket order
An entry with a stop loss and a profit target attached, so both exits are set the moment you are filled.
Breakout
Price pushing through a level that held it before, often with a jump in volume.
Buffer
At BluSky, the profit you build after passing an evaluation. Once it is built, payouts begin.
C
Consistency
Your best day divided by your total profit. Each plan sets a maximum percentage.
Contract
1 unit of a futures product, such as 1 NQ.
CPI
The Consumer Price Index, a monthly inflation report that often moves futures sharply.
D
Daily loss limit
The most you allow yourself (or a firm allows you) to lose in 1 day before you stop trading.
DOM
Depth of Market. The ladder of resting buy and sell orders at each price.
Drawdown
The maximum amount an account can fall before it fails. It can be static or trailing.
E
Economic calendar
The schedule of reports and events that can move markets, such as CPI and FOMC.
End-of-day trailing drawdown
A drawdown that moves up with your highest end-of-day balance. At BluSky it updates at 6pm ET and only moves up.
Evaluation
The first stage at a prop firm, where you reach a profit goal inside the rules to qualify for a funded account.
Expiration
The date a futures contract stops trading. Day traders roll to the next contract before it.
F
FOMC
The Federal Open Market Committee. Its rate decisions, usually at 2pm ET, move every market.
Footprint chart
A chart that shows buying and selling volume at each price inside every candle.
Front month
The contract month with the most trading, usually the nearest expiration.
G
Gap
The space between 1 session’s close and the next session’s open.
Globex
CME’s electronic platform, where futures trade nearly 24 hours a day.
I
Intraday trailing drawdown
A drawdown that follows your highest balance during the day, open trades included.
L
Leverage
Controlling a large contract value with a small amount of capital. It makes gains and losses bigger.
Limit order
An order to buy or sell at a set price or better.
Liquidity
How easily you can get in and out at a fair price. NQ and ES are very liquid.
Long
A trade that profits when price rises.
M
Margin
The amount required to hold a futures position.
Market order
An order that fills right away at the best available price.
Micro
A contract 1/10 the size of its mini, such as MNQ for NQ.
Mini
The standard-size contract for index futures, such as NQ or ES.
Month code
The letter for the contract month: H March, M June, U September, Z December for index futures.
N
NFP
Nonfarm Payrolls, the monthly US jobs report, usually released at 8:30am ET on a Friday.
P
Payout
Profit paid out from a funded account. On BluSky evaluation plans you keep 90%.
Point
A full 1.00 move in price. On NQ, 1 point is $20.
Profit goal
The profit you need to reach to pass an evaluation.
Pullback
A short move against the trend before it continues.
R
Reset
Starting an evaluation or stage again after breaking a rule, for a fee.
Resistance
A price area where selling has stopped rallies before.
Rollover
Moving from an expiring contract to the next month.
RTH
Regular trading hours, 9:30am to 4pm ET, when the US stock market is open.
S
Short
A trade that profits when price falls.
Slippage
The difference between the price you expected and the price you got.
Spread
The gap between the bid and the ask.
Static drawdown
A drawdown that never moves, no matter how much you make.
Stop order
An order that becomes a market order when price reaches your stop price. Used to cap a loss.
Support
A price area where buying has stopped declines before.
T
Tick
The smallest price move a contract can make. On NQ, 1 tick is 0.25 points.
Tick value
What 1 tick is worth in dollars. On NQ, $5. On MNQ, $0.50.
V
Volume
How many contracts traded in a period.
VWAP
Volume-weighted average price, the average price weighted by volume for the session.
New to futures? Start with Flight School.
6 modules and 24 short lessons, from what a futures contract is to your first payout.
This glossary is educational content only and is not financial advice. Futures trading involves substantial risk of loss and is not suitable for every investor. Past performance does not guarantee future results.