Glossary

• Bot: Trading Robot, automated trading algorithm executing your Runbot strategy.

• Backtest: A simulation of a trading strategy on historical data, used to test the viability of a strategy before implementing it in live markets.

• Backtest range: Refers to the specific time period or historical data range used to simulate and evaluate the performance of a trading strategy.

• Candlestick: A type of financial chart used to display the high, low, open, and close prices of a security over a specific period of time.

• Composer: Advanced tool designed to evaluate the performance of various trading strategies, both individually and collectively.

• Optimiser: Advanced tool designed to automatically and efficiently searches for the optimal parameters of an automated trading strategy.

• Entry condition: A set of criteria that must be met before a trade can be entered into the market.

• Strategy: Combination of rules, parameters, indicators, signals, forming a trading strategy.

• Indicator: Tool to analyze the price action of a market and create trading signals to build a strategy (such like RSI, MACD, Ichimoku...).

• Signal: Allows you to execute rules. They are generated by indicators. They are not a trade order, but aim to trigger a trade order if the conditions are met.

• Place a signal: Specific indicator rule that if parameters are met, will generate a signal.

• Entry in position rules: Set of rules to determine the conditions to open a trading position.

• Exit position rules: Set of rules to determine the conditions to exit a trading position.

• Adjust position rules: Set of rules to increase or decrease position size while in a position.

• Size: Total amount of USD you are willing to bet for a trade.

• Entry in position methods: Way to get in position (Market Order, Limit Order, Pyramid Order, etc).

• Selectors: Way to create custom rules using signals for your trading strategies.

• Maker fees: Fees paid after executing a limit order on an exchange.

• Taker fees: Fees paid after executing a market order on an exchange.

• Monthly volume: Refers to the total amount in dollars that has been traded by your trading bot.

• Traded Volume: Traded volume refers to the total quantity of an asset that is bought and sold during a specific period. It is a key metric used to gauge the activity and liquidity of the asset in the market, indicating how many shares, contracts, or units have changed hands.

• Risk management: Set of rules in order to prove your risk management and protect your capital. It is used to maximize gains and reduce losses, risks.

• Take profit: Trading order to exit a position in profit.

• Stop loss: Trading order to exit a position in loss.

• Drawdown: Used to determine the value of the decline between the highest and lowest points of the capital curve.

• Slippage: Slippage effect, refers to the situation where the price at which your order is executed does not match the price at which you placed your order. It usually occurs when markets move suddenly and are subject to volatility or you execute a large size.

• Liquidity: Amount available in the orderbooks to execute an order. If the market is liquid, it's easier and faster to buy or sell an asset without having to compromise on the price and quantity.

• Orderbook: List of available pending orders ready to be executed at a certain price, typically organized by price level.

• CEX / DEX: Centralized / Decentralized Exchange, a cryptocurrency exchange is a digital platform that allows users to buy, sell, and trade various cryptocurrencies.

• Exchange trading fees: % of fees you have to pay to execute an order on a exchange.

• Funding fees: % of fees you have to pay per period to hold your current perpetual trading position.

• Collateral/Capital: Assets pledged to provide liquidity and execute trading orders with leverage.

• Leverage: The use of borrowed capital to increase the potential return of an investment. Leverage refers to the ability to control a large position with a small amount of capital.

• Liquidation : Liquidation occurs when the value of a position reaches or falls below the predefined margin value. Leading to automatic closure of the position by the exchange platform to prevent further losses. The funds from the liquidated position are used to repay the margin debt.

• Timeframe: The period of time covered by a financial chart, such as 1 day, 1 week, or 1 month.

• Triggers: Events or conditions that initiate a particular action or response, such as the execution of a trade.

• Trigger in overlap: A trigger in overlap refers to a situation where two or more distinct criteria or signals align, signaling a potential trade entry or exit point.

• Long position: A trade in which the trader buys an asset with the expectation that the price will rise.

• Short position: A trade in which the trader sells an asset with the expectation that the price will fall.

• Order size: The quantity of an asset that is being traded.

• Order type: The specific way in which an order is placed, such as a market order, limit order, or stop order.

• Market order: An order to buy or sell an asset at the current market price.Q

• Limit order: An order to buy or sell an asset at a specific price or better.

• Stop order: An order to buy or sell an asset when the price reaches a certain level.

• Position size: The total size of a trade, including the number of units and the leverage used.

• Risk/reward ratio: A measure of the potential profitability of a trade, calculated by dividing the potential profit by the potential loss.

• Break-even point: The price at which a trade becomes profitable, taking into account the costs of the trade (such as commissions and fees).

• Runbot score: This score measures the quality and strength of your strategy on a scale from 1 to 10, considering multiple factors. The score is adjusted for strategies with longer backtest times to reflect the reduced risk of overfitting.

• PnL: PnL stands for Profit and Loss, indicating the net result of trading activities by showing the difference between the revenue generated and the costs incurred.

• Spread: The difference between the bid and ask prices of an asset.

• Sharpe ratio: A measure of risk-adjusted return, calculated by dividing the average return of an trading strategy by its standard deviation. It helps assess the efficiency and consistency of a strategy's returns relative to its level of risk.

• Profit Factor: A calculation that represents the ratio of gross profit to gross loss. It indicates the profitability of a trading strategy by comparing the total gains to the total losses incurred.

• Pending order: An order that is placed but not yet executed.

• Winrate: Winrate refers to the percentage of trades that result in a profit out of the total number of trades made. It is a key performance metric indicating the success rate of a trading strategy.

• Fill: The execution of an order.

• Trade history: A record of all trades that have been made, including details such as the asset, size, price, and date.

• Margin: The amount of capital that is required to open and maintain a position.

• Margin call: A request for additional capital to maintain a position that has moved against the trader.

• Trailing stop: A type of stop order that adjusts to the market price as it moves in favor of the trade.

• Trade: trading order initiated by signals if all the conditions of the strategy are met.

• Webhook: Method of communication that allows our trading bot to trade & receive real-time updates and data from the exchange platform.

• Alert: An alert is sent by your running webhook, corresponding to a trade signal, this data is visible in your running trading bot statistic.

• Bullish: This term is used to describe an upward attitude or trend in the market. For example, a trader is considered bullish when they anticipate a price increase and seek to buy or maintain a long position.

• Bearish: Opposite to bullish, bearish describes a downward attitude or trend in the market. For example, a trader is considered bearish when they anticipate a price decrease and seek to sell or maintain a short position.

• Wick: In a candle, the wick refers to the upper and lower parts of the candle. It represents the range of prices during the candle's period where the prices were reached but not maintained. The length of the wick can provide information about price action and levels of support and resistance.

• Overfit: Overfitting in algo trading occurs when a trading algorithm is too specifically tailored to historical data, making it less effective in real-time due to a lack of adaptability and generalization.

• Out of Sample: A test out-of-sample refers to evaluating the performance of a trading strategy on data that was not used during the strategy's training phase (ex: another date range). This helps to verify the strategy's ability to generalize and perform well on unseen data, ensuring that the strategy is robust and not overfitted to historical data.