Day Trading Cheat Sheet 2026

The 30 highest-yield Day Trading facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What does it mean when a stock's price 'walks the band' along the upper Bollinger Band? → The stock is in a strong uptrend with sustained momentum
2. What is a market order? → An order to buy or sell immediately at the best available current price
3. A ______________ candle pattern is the one seen below. → Bearish Engulfing
4. What exactly is this three-day pattern of trend reversal? → Bullish Outside Up
5. Which types of charts offer an understanding of market psychology? → Candlestick chart
6. Slippage in day trading refers to: → The difference between the expected execution price and the actual fill price
7. A trailing stop order differs from a fixed stop-loss in that it: → Automatically adjusts its trigger price as the stock moves in your favor
8. What kind of candle is this? → Doji
9. In day trading, a 'MACD crossover' buy signal occurs when: → The MACD line crosses above the signal line
10. What does this candle pattern's name mean? → Morning Star
11. The Parabolic SAR indicator is primarily used to: → Identify potential reversal points and trailing stop levels in trending markets
12. How do you define "bearish"? → market going down
13. How does a candlestick chart show the daily high price? → trendline
14. The Stochastic Oscillator compares a security's closing price to its price range over a given period. A reading above 80 generally indicates: → The asset is in overbought territory
15. What is 'risk of ruin' in day trading? → The probability that a trader's account will be depleted to zero
16. An Electronic Communication Network (ECN) in day trading is: → An automated system that electronically matches buy and sell orders
17. What does a 'doji' candlestick indicate? → Indecision in the market, where the open and close prices are nearly equal
18. True/False: Early in the cycle, candlestick charting is ineffective at spotting market reversals. → False
19. The '1% rule' in day trading risk management states that a trader should risk no more than: → 1% of total account equity per trade
20. When a day trader executes a short sell order, they are: → Borrowing shares to sell now with the intent to repurchase them at a lower price
21. Bollinger Bands consist of which three components? → A simple moving average, an upper band, and a lower band set at standard deviations
22. Price improvement in order execution occurs when: → An order fills at a better price than the quoted bid or ask at the time of submission
23. How does a candlestick chart show the daily high price? → shadow
24. Which of the following best describes 'drawdown' in day trading? → The peak-to-trough decline in account value
25. The On-Balance Volume (OBV) indicator is used to: → Measure cumulative buying and selling pressure using volume
26. What is a 'breakout' in day trading? → When the price moves beyond a defined support or resistance level with increased volume
27. What is 'position sizing' in the context of day trading risk management? → Determining how many shares to buy based on risk tolerance
28. What does a risk-to-reward ratio of 1:3 mean? → You risk $1 to potentially make $3
29. VWAP stands for Volume Weighted Average Price. In day trading, it is most commonly used as: → An intraday benchmark for institutional order flow and trade quality
30. Direct Access Trading (DAT) allows day traders to: → Route orders directly to specific exchanges or ECNs for faster and more precise execution