Glossary of Terms
A comprehensive reference of trading terminology, abbreviations, and definitions used throughout the knowledge base and in professional trading contexts.| Term | Definition | Category |
|---|---|---|
| ATR | Average True Range — measures market volatility | Indicators |
| Backtest | Testing a strategy against historical data | Strategy |
| Bollinger Bands | Price bands based on standard deviations from a moving average | Indicators |
| Candlestick | Chart representation showing open, high, low, close for a period | Charting |
| Drawdown | Peak-to-trough decline in account value | Risk |
| EMA | Exponential Moving Average — weighted moving average favoring recent prices | Indicators |
| Entry Signal | Condition that triggers opening a new position | Strategy |
| Exit Signal | Condition that triggers closing an existing position | Strategy |
| FILTER | State-based signal that checks current market conditions | MangroveAI |
| MACD | Moving Average Convergence Divergence — trend-following momentum indicator | Indicators |
| Market Order | Order to buy/sell immediately at best available price | Order Types |
| Max Drawdown | Largest peak-to-trough decline during a specific period | Risk |
| OHLCV | Open, High, Low, Close, Volume — standard market data format | Data |
| Position Sizing | Determining how much capital to allocate to a single trade | Risk |
| RSI | Relative Strength Index — momentum oscillator (0-100 scale) | Indicators |
| Sharpe Ratio | Risk-adjusted return metric (return / volatility) | Performance |
| Slippage | Difference between expected and actual execution price | Execution |
| SMA | Simple Moving Average — arithmetic mean of prices over N periods | Indicators |
| Sortino Ratio | Risk-adjusted return using only downside deviation | Performance |
| Stop-Loss | Order to exit a position when price reaches a specified loss level | Risk |
| Take-Profit | Order to exit a position when price reaches a specified profit level | Risk |
| TRIGGER | Event-based signal that fires when specific conditions occur | MangroveAI |
| VWAP | Volume-Weighted Average Price | Indicators |
| Win Rate | Percentage of trades that are profitable | Performance |
For the complete glossary with 200+ terms, see
knowledge-base/09-glossary.md in the repository.