Plain-English definitions
Breakout & trading math glossary
Neutral definitions for the terms used across PreBreakout. Definitions describe concepts; they do not rank setups or imply an action.
- ATR
- Average True Range; a historical range statistic that measures magnitude of movement, not direction.
- Break-even outcome
- A closed outcome recorded as neither a win nor a loss. Whether it belongs in a win-rate denominator must be stated explicitly.
- Breakout
- Movement beyond a user-defined reference boundary.
- Breakout level
- The boundary from which a breakout is being described or measured.
- Close
- The final value recorded for a chosen chart interval.
- Consolidation
- A period in which values remain inside a comparatively limited range.
- Drawdown
- A decline from a prior reference peak, commonly expressed as a percentage.
- Entry
- A modeled starting value used in trade arithmetic.
- Expectancy
- Expected value calculated from assumed win probability, average win and average loss.
- Fakeout
- Informal retrospective term for a boundary crossing that later returns through the boundary.
- Gap
- Difference between a prior reference close and a later opening value.
- Gross loss
- The total magnitude of losing outcomes in a defined sample, expressed as a positive amount for ratio calculations.
- Gross profit
- The total amount produced by winning outcomes in a defined sample before subtracting gross losses.
- Maximum drawdown
- The largest percentage decline from a running peak to a later trough in an ordered value series.
- Measured move
- A geometric projection that reuses the size of a prior structure from a chosen reference point.
- Observed win rate
- Winning outcomes divided by winning plus losing outcomes in a defined sample. PreBreakout excludes explicitly break-even outcomes from this primary denominator.
- Position size
- Number of units implied by a chosen risk budget and per-unit risk distance.
- Profit factor
- Gross profit divided by gross loss for the same sample; a totals ratio that does not preserve order or sample size.
- R
- A unit equal to the modeled initial risk in a trade framework.
- Resistance
- A user-defined reference area above a current value.
- Retest
- A later return toward a previously crossed reference area.
- Reward-to-risk
- Modeled reward distance divided by modeled risk distance.
- Running peak
- The highest value observed up to a given point in an ordered series.
- Stop
- A modeled reference value used to define risk distance; real execution can differ.
- Stop distance
- The absolute difference between a modeled entry value and stop value; it can also be expressed as a percentage of entry.
- Support
- A user-defined reference area below a current value.
- Target
- A user-entered reference value for payoff arithmetic; on this site it is never a site-generated forecast.
- Volume ratio
- Observed volume divided by a user-defined reference average volume.
- Wick
- The part of a candlestick extending beyond its open/close body to the period high or low.