reference
Trading & risk glossary
58 terms: indicators, risk mechanics, strategy types, and the vocabulary zengtrade's own engine uses (regime engine, cost gate, Risk Governor). Plain-English, no filler.
Risk & position sizing
Average True Range (ATR)A volatility measure: the average of how far price has moved (high to low, or from the prior close) over recent bars.DrawdownThe decline from a portfolio's peak value to its lowest point since, the real, lived cost of a losing stretch.Position SizingHow much capital goes into a single trade, the decision that determines whether a losing streak is survivable or account-ending.Kelly CriterionA formula for the mathematically optimal fraction of capital to risk per bet, given a known win rate and payoff ratio.Risk Per TradeThe share of total capital a single trade can lose if its stop is hit, the dial that ties position size to the stop distance.Stop-LossA predetermined exit price that closes a losing position before the loss grows further.Chandelier ExitA trailing stop set a fixed ATR multiple below the highest high since entry, it only ever moves up, never down.
Indicators & signals
Relative Strength Index (RSI)A 0-100 momentum oscillator measuring the speed and size of recent price moves, used to spot overbought/oversold conditions.Moving Average (SMA / EMA)A smoothed price line. The Simple Moving Average weights every bar equally; the Exponential Moving Average weights recent bars more heavily.Golden Cross / Death CrossA golden cross is a shorter moving average crossing above a longer one (bullish signal); a death cross is the reverse.MACDMoving Average Convergence/Divergence: the gap between two EMAs, plus a signal line, used to spot momentum shifts.Bollinger BandsA moving average with two bands plotted a set number of standard deviations above and below it, tracking how stretched price is.Z-ScoreHow many standard deviations the current price is from its recent rolling average, a statistical measure of how stretched a move really is.Average Directional Index (ADX)A 0-100 reading of trend strength, regardless of direction, the indicator built specifically to tell a real trend from chop.Supertrend IndicatorAn ATR-band trend indicator that flips between a line above price (downtrend) and below price (uptrend), giving a clear visual trend flag.VWAP (Volume-Weighted Average Price)The average price paid for an asset over a session, weighted by the volume traded at each price, a real-time "fair value" benchmark.Volume SpikeTrading volume on a bar well above its recent average, used as a confirmation filter that a price move has real conviction behind it.
Market structure & regimes
Market RegimeThe prevailing character of a market, trending up, trending down, or range-bound/choppy, that determines which strategies actually have an edge right now.Bull MarketA sustained uptrend: rising prices, generally accompanied by broad participation and confidence.Bear MarketA sustained downtrend: falling prices, often with lower participation and heightened risk-aversion.Choppy MarketA range-bound market with no sustained direction, the regime where trend-following strategies tend to lose money to whipsaws.Trend FollowingA strategy style that buys strength and rides existing momentum, on the premise that a move in progress is more likely to continue than reverse.Mean ReversionA strategy style that bets a stretched price snaps back toward its recent average, the opposite premise to trend following.WhipsawA sharp price move that reverses direction almost immediately, stopping out a position shortly after entry, the characteristic failure mode of trend strategies in choppy markets.Market CapitalizationAn asset's total value: circulating supply multiplied by current price, the standard way to rank and compare coins by size rather than by price alone.LiquidityHow easily an asset can be bought or sold in size without moving its price meaningfully, deeper order books mean lower slippage for the same trade size.
Strategy types & patterns
Breakout TradingEntering a position when price moves decisively beyond a defined level (a prior high/low, or a tight consolidation range).Opening Range Breakout (ORB)An intraday strategy that marks the high/low of the first few minutes of a session, then trades a break beyond that range.NR7 (Narrow Range 7)A pattern where the current bar has the smallest high-low range of the last 7 bars, read as a volatility "coil" ahead of an expansion.Momentum TradingBuying assets that have recently performed strongly, on the premise that recent winners tend to keep winning over the near term.Cross-Sectional MomentumRanking a basket of assets by recent return and rotating capital into the strongest performers, out of the weakest, a relative, not absolute, bet.Statistical Arbitrage (Stat-Arb)Trading the statistical relationship between two or more related assets, long the relatively cheap one, short the relatively rich one, rather than taking a directional bet on either.Dollar-Cost Averaging (DCA)Investing a fixed amount at regular intervals regardless of price, so the average entry price smooths out over time instead of depending on one timing decision.ScalpingA very short-term trading style aiming for small, frequent profits on fast intraday moves, usually in and out of a position within minutes.
Trading mechanics & costs
SlippageThe difference between the price a strategy expects to trade at and the price it actually fills at, a real, unavoidable cost of trading.Round-Trip CostThe total cost of entering and exiting a position, trading fees plus slippage on both legs, expressed as a single percentage.Profit FactorGross profit divided by gross loss, a single number summarizing whether winners meaningfully outweigh losers, independent of win rate.Win RateThe percentage of trades that close profitably, informative, but meaningless without knowing the size of wins versus losses too.ExpectancyThe average amount a strategy makes or loses per trade, net of costs, the single number that answers whether this is actually worth doing.Out-of-Sample TestingTesting a strategy on data it wasn't built or tuned on, the honest check for whether an edge is real or just curve-fit to history.BacktestingSimulating a strategy against historical price data to see how it would have performed, the first evidence step, not the last.Perpetual FuturesA derivative contract that tracks an asset's price with no expiry date, using a periodic funding payment between longs and shorts to keep it anchored to spot.Funding RateThe periodic payment exchanged between long and short holders of a perpetual futures contract, the mechanism that keeps its price anchored to spot.Limit OrderAn order to buy or sell at a specified price or better, guarantees the fill price but not that the order fills at all.Market OrderAn order to buy or sell immediately at the best available price, prioritizes certainty of execution over price control.Basis Points (bps)One hundredth of one percent (0.01%), the standard unit for quoting small costs and rates precisely without a string of decimal places.Cost DragThe cumulative erosion of a strategy's returns by trading costs (fees plus slippage) compounding across many trades, worse for high-frequency strategies.Sharpe RatioA risk-adjusted return measure: average return divided by the volatility (standard deviation) of those returns, higher means more return per unit of risk taken.Compound Annual Growth Rate (CAGR)The smoothed annual growth rate that would take a starting value to an ending value over a period, assuming steady compounding, useful for comparing returns across different timeframes.Paper TradingSimulating trades on live prices without risking real money, tracking exactly what a strategy would have done, and won or lost, had it been live.Forward TestingRunning a strategy on live, real-time data after development is finished, the strictest form of out-of-sample evidence since the data genuinely didn't exist when the strategy was built.
zengtrade engine terms
Cost GateAn engine rule that refuses to take a trade if its expected edge doesn't clear a multiple of round-trip trading cost, anti-churn by design.Regime Enginezengtrade's live classifier that reads current market structure (Bull / Bear / Choppy) and gates which strategy types are allowed to take new risk.Risk Governorzengtrade's portfolio-level control layer: symbol/sector concentration limits, a crowding cap, and a drawdown kill-switch, sitting above every individual strategy.Kill-SwitchAn automatic halt on new positions once portfolio drawdown crosses a defined threshold, the Risk Governor's hardest stop.Go-Live BarThe evidence threshold a strategy must clear on its live paper track record, minimum trade count, profit factor, regime coverage, and positive expectancy, before live execution is even considered.Three-Key SafetyLive trading requires three independent things to all be true at once: the strategy cleared its go-live bar, the OS-level ALLOW_LIVE flag is armed, and the user explicitly arms it. No single point of failure flips real money on by accident.Non-Custodial Tradingzengtrade never holds user funds or has withdrawal access. Trades execute through the user's own exchange account and API keys, not a pooled platform wallet.