Glossary
Trader's glossary
Plain-English definitions of the terms every trader runs into β indicators, risk metrics, market structure, statistics, order types, backtesting, and crypto slang. Formulas where they exist, worked examples where they help.
97 terms across 7 categories
97 terms
A
- Indicatorsβ
ATR (smoothed)
The simple moving average of Average True Range β a steadier baseline for current volatility.
- Indicatorsβ
Average directional index (ADX)
Trend-strength gauge (0β100). High ADX = strong trend; ADX direction is separate.
- Indicatorsβ
Average true range (ATR)
Rolling average of the true range β the canonical volatility measure for stops.
B
- Backtestingβ
Backtest
Simulating a trading rule on historical data to estimate how it would have performed.
- Indicatorsβ
Blackflag FTS
A SuperTrend variant that adds a gap-adjusted true range, a trend-extreme tracker, and Fib pullback levels.
- Indicatorsβ
Bollinger Bands
A moving average flanked by Β±k standard deviations of price. k = 2 by default.
- Market structureβ
Break of structure (BOS)
Price closing through a prior swing point in the direction of the existing trend.
- Riskβ
Break-even Stop
Moving the stop to the entry price once a trade is far enough in profit so it can't become a loss.
C
- Statisticsβ
Calmar ratio
Annualized return divided by absolute maximum drawdown. Pain-adjusted return.
- Market structureβ
Change of character (CHoCH)
Price closing through a swing point against the prevailing trend β first sign of reversal.
- Riskβ
Circuit Breaker
An account-level rule that halts new trades when a drawdown, daily-loss, or exposure limit is hit.
- Statisticsβ
Conditional Value at Risk (CVaR)
The average loss on the bad days beyond the VaR threshold β the size of the tail.
- Riskβ
Confirmation Trigger
Staging a signal and waiting for extra proof β a pull-back, candle, delay, or condition β before acting.
- Riskβ
Cooldown Period
A number of bars the strategy must wait after an exit before it may re-enter.
D
E
- Indicatorsβ
EMA Pullback
A complete long-&-short entry model: a three-EMA trend filter plus an ATR-gated pullback trigger.
- Market structureβ
Equal highs / equal lows (EQH / EQL)
Two or more swing pivots printing at nearly the same price β a visible liquidity pool.
- Statisticsβ
Expectancy
Average profit (or loss) per trade β the most honest measure of edge.
- Indicatorsβ
Exponential moving average (EMA)
Weighted moving average that gives recent bars exponentially more weight.
F
- Market structureβ
Fair value gap (FVG)
A three-bar price imbalance where the wicks of bars t and t-2 fail to overlap.
- Generalβ
FUD
Fear, uncertainty, and doubt β narratives that drive sellers to capitulate.
- Generalβ
Funding Rate
The periodic payment between long and short holders of a perpetual futures contract.
H
- Indicatorsβ
HalfTrend
A latched trend line built from channel extremes: it ratchets one way until price decisively breaks the other way.
- Market structureβ
Higher high
A swing high that prints above the prior swing high β the signature of an uptrend.
- Generalβ
Hodler
Long-term holder of crypto who refuses to sell through volatility.
I
L
- Riskβ
Leverage
Position notional divided by posted margin. 10Γ leverage = 10Γ the equity exposure.
- Order typesβ
Limit order
An order to buy at or below / sell at or above a chosen price. May not fill.
- Riskβ
Liquidation price
Price at which a leveraged position is force-closed by the exchange.
- Market structureβ
Liquidity sweep
Price briefly trades through an EQH or EQL to trigger resting stops, then immediately reverses.
- Generalβ
Long
A position that profits when price rises. To 'go long' = to buy.
- Generalβ
Long/Short Ratio
The proportion of traders (or position value) that is long versus short on an asset.
- Backtestingβ
Look-ahead bias
Using information in a backtest that would not have been available at the time.
- Market structureβ
Lower low
A swing low that prints below the prior swing low β the signature of a downtrend.
M
- Indicatorsβ
MACD
Trend-momentum hybrid: difference of two EMAs, plus a signal-line EMA and histogram.
- Order typesβ
Market order
An order to fill immediately at the best available price. Pays the spread.
- Riskβ
Maximum drawdown
The deepest peak-to-trough decline observed across the entire equity curve.
- Statisticsβ
Mean
Arithmetic average of a series. In trading: average return per period.
- Statisticsβ
Median
Middle value of a sorted series β robust to outliers, unlike the mean.
- Backtestingβ
Monte Carlo Simulation
Resampling trade outcomes many times to get a distribution of results instead of one number.
- Indicatorsβ
Moving average
A rolling average of price over a fixed window, used to smooth noise.
O
- Generalβ
Open Interest
The total number of derivative contracts currently open and not yet settled.
- Market structureβ
Order block
The last opposite-direction candle before a break of structure, used as a supply/demand zone.
- Backtestingβ
Out-of-sample
Data the strategy was not allowed to see during parameter selection.
- Backtestingβ
Overfitting
Fitting a strategy so closely to past data that it captures noise, not signal.
P
- Backtestingβ
Paper Trading
Running a strategy on live market data with a simulated broker β real prices, no real money.
- Indicatorsβ
Parabolic SAR
Wilder's stop-and-reverse: an accelerating trailing stop that flips to the other side of price when hit.
- Riskβ
Position size
How many units of an asset a trade holds β derived from risk budget and stop distance.
- Market structureβ
Premium / discount / equilibrium
The upper, lower, and middle slices of a trailing range β premium = sell zone, discount = buy zone.
- Market structureβ
Prior day high / prior day low (PDH / PDL)
Yesterday's extreme prices β common breakout, target, and liquidity reference levels.
- Backtestingβ
Probability of Backtest Overfitting (PBO)
An estimate of how likely your best backtest configuration is overfit β lower is better.
- Statisticsβ
Profit factor
Gross profit divided by gross loss. > 1.0 = profitable, > 1.5 = strong.
- Riskβ
Pyramiding
Adding to a winning position at fixed steps in your favour, up to a maximum number of add-ons.
R
- Market structureβ
Range
Sideways price action bounded by a definable support and resistance.
- Indicatorsβ
Relative strength index (RSI)
Momentum oscillator that ranges 0β100 based on the ratio of gains to losses.
- Market structureβ
Resistance
A price level where rising supply outpaces demand, halting or reversing rallies.
- Riskβ
Risk per trade
Dollar amount (or % of equity) you lose if the stop on a single trade hits.
- Riskβ
Risk-reward ratio
Ratio of potential gain to potential loss on a trade β also written R-multiple.
S
- Riskβ
Scaling In
Adding to a position as price moves against your entry, lowering the average cost.
- Statisticsβ
Sharpe ratio
Excess return over the risk-free rate per unit of total volatility.
- Generalβ
Short
A position that profits when price falls. To 'short' = to sell first, buy later.
- Indicatorsβ
Simple moving average (SMA)
Unweighted arithmetic mean of the last N closes. Every bar counts equally.
- Backtestingβ
Slippage
Difference between the price a strategy assumed and the price it actually got.
- Statisticsβ
Sortino ratio
Sharpe variant that penalizes only downside volatility, not total volatility.
- Statisticsβ
Standard deviation
Square root of variance β the most common volatility measure in trading.
- Indicatorsβ
Stochastic oscillator
Where today's close sits inside the high-low range of the last N bars, 0β100.
- Riskβ
Stop loss
A pre-committed exit level that caps the maximum loss on a trade.
- Order typesβ
Stop order
An order that converts to a market order once a trigger price is reached.
- Order typesβ
Stop-limit order
Stop order that converts to a limit order, not a market β avoids bad slippage.
- Backtestingβ
Stress Test
Replaying a strategy through historically hard regimes and adversarial shocks.
- Riskβ
Structural Stop
A stop anchored to market structure (a swing, candle, or level) rather than a flat percentage.
- Market structureβ
Structural Trend
A trend-regime state (+1 / 0 / β1) that flips only after two confirmed same-side swing breaks.
- Indicatorsβ
SuperTrend
An ATR-band trailing stop on hl2 that flips when close breaches the opposite latched band.
- Market structureβ
Support
A price level where falling demand outpaces supply, halting or reversing declines.
- Backtestingβ
Survivorship bias
Testing only on assets that survived to the present, ignoring those that died.
- Market structureβ
Swing high
A local peak: a bar whose high is higher than the N bars on each side.
- Market structureβ
Swing low
A local trough: a bar whose low is lower than the N bars on each side.
T
- Riskβ
Take profit
A pre-committed exit at a target price that locks in a winning trade.
- Riskβ
Take-profit Ladder
Closing a position in pieces at successively higher targets instead of all at once.
- Order typesβ
Take-profit order
A limit order at a target price that closes a winning position automatically.
- Riskβ
Tiered Position Sizing
Scaling trade size up or down based on an indicator condition.
- Order typesβ
Time in force (GTC / IOC / FOK)
Instruction that controls how long an order stays live before being cancelled.
- Riskβ
Trailing stop
A stop that ratchets in the trade's favor and never moves against it.
- Order typesβ
Trailing stop order
Exchange-side order whose trigger ratchets as price moves in your favor.
- Market structureβ
Trend
A persistent directional drift in price β up, down, or sideways.
- Indicatorsβ
Trend Magic
A wick-anchored ATR band that ratchets one way or the other depending on the sign of CCI.
V
- Statisticsβ
Value at Risk (VaR)
A loss threshold you won't exceed at a given confidence level over a period.
- Statisticsβ
Variance
Average squared deviation from the mean. Square root is standard deviation.
- Indicatorsβ
Volume Flow Indicator (VFI)
An accumulation/distribution oscillator that sums signed volume only when log-returns exceed a noise floor.
- Indicatorsβ
Volume moving average
A moving average of bar volume, used to detect above-average participation.
- Indicatorsβ
Volume-weighted average price (VWAP)
Average price weighted by volume β the institutional benchmark for intraday fills.
W
- Backtestingβ
Walk-forward optimization
Optimize on a rolling in-sample window, validate on the next out-of-sample slice.
- Generalβ
Webhook
An automated HTTP POST that sends an event to a URL you control the moment it happens.
- Generalβ
Whale
A holder large enough to move the market when they trade β typically 1,000+ BTC.
- Statisticsβ
Win rate
Fraction of trades that closed profitable. On its own, says little about edge.
Stop guessing, start measuring
Every term above is implemented in the platform β backtest, walk-forward, paper-trade. The free tier doesn't expire.