Trading Dictionary

Measures how fast price is rising/falling (0-100). Too high = overbought, too low = oversold

Moving average that weights recent prices more heavily. Used to identify trends

Short EMA vs Long EMA. When fast crosses above slow = buy signal

Measures trend strength (0-100). High = strong trend, low = no clear direction

Measures average price swing per bar. Used to calculate SL/TP appropriate to volatility

Measures momentum by comparing 2 EMAs. MACD crossing above Signal = buy

Upper/lower bands around moving average. Price hitting lower band = may bounce up, upper = may drop

ATR-based trend line. When price crosses the line = trend reversal

Highest/lowest price of N bars. Price breaking above = breakout buy signal

Running a strategy against historical price data to see if it would have been profitable

First 70% of data used to "train" the strategy — like a practice exam with answers

Last 30% of data the strategy has never seen — like the real exam

Split data into multiple windows, test each separately to check if strategy profits consistently

Each sub-window in Walk-Forward (e.g. 46 folds = 46 months tested separately)

Color grid showing strategy results when changing params. Wide green = robust, single green dot = overfitted

Strategy that memorizes old data perfectly but fails on new data — like memorizing past exams but failing the real one

Total profit ÷ total loss. Above 1 = profitable, below 1 = losing

Total profit or loss compared to starting capital

Largest peak-to-trough decline before recovery. e.g. -40% = lost 40% before recovering

What % of total trades are winners

Return ÷ risk. Higher = more profit relative to risk taken

What % of folds are profitable. Higher = more consistent strategy

Method of increasing lot size after losses, hoping a win will recover everything

Each stacked position (layer 0 = first, layer 6 = seventh)

Group of all layers in one Martingale cycle

Combined profit target for the basket. When hit = close all layers instantly

What % of baskets end in profit

How far price must move before opening the next layer (e.g. 4 ATR)

Lot multiplier per layer (1.3x = next layer is 30% bigger)

Maximum layers allowed. More = higher risk but better recovery chance

Maximum time to hold a basket before forced close, regardless of profit/loss

Fee charged by the broker per trade (e.g. 0.07% per round trip)

Difference between expected price and actual fill price due to market movement during execution

Bid/Ask price difference charged by broker. Narrower = lower cost

Smallest price movement unit (EURUSD: 1 pip = 0.0001)

European market open (07:00-16:00 UTC). High volume, tight spreads

US market open (13:00-22:00 UTC). Volatile around news events

Asian market open (00:00-09:00 UTC). Low volume, quiet price action

Both markets open simultaneously (13:00-16:00 UTC). Highest volume of the day

Free price data from Yahoo Finance (general data, not broker-specific prices)

Price data directly from broker (matches actual trading prices)

Open, High, Low, Close, Volume = 5 price data points per candlestick bar

Duration of one candlestick bar (M5 = 5 min, H1 = 1 hour, D1 = 1 day)