Glossary

Everything explained, in one place.

Health Score

A 0-100 combined score that shows whether a live strategy’s edge is still holding or quietly decaying over time.

[Scores]

Edge Score

A 0 to 100 score that grades how real and how strong a trading strategy's edge is on its backtest.

[Scores]

Stability Score

A 0-100 combined score that measures how closely a live trading strategy follows the edge from backtesting.

[Scores]

Expectancy

What one average trade is worth to you, after the wins and losses cancel out.

[Statistics]

Sortino Ratio

How much return a strategy earns for the losses it actually makes you feel.

[Risk]

Maximum Drawdown

The deepest hole a strategy has dug you into, peak to bottom.

[Risk]

R Multiple

Every trade measured against what you risked, where a full stop is always minus 1R.

[Execution]

Overfitting

When a strategy is tuned so tightly to the past that it only works on the past.

[Statistics]

Out of Sample

The data your strategy never saw while you built it, kept back to test if the edge is real.

[Statistics]

Walk Forward

Out of sample testing done over and over, rolling through your whole history instead of one split.

[Statistics]

Monte Carlo

Reshuffling your trades thousands of times to see the range of outcomes luck could have handed you.

[Statistics]

Slippage

The gap between the price you expected and the price you actually got.

[Execution]

Trading Costs

Every commission, spread, and fee that eats your edge before you get paid.

[Execution]

Live vs Backtest

The gap between how a strategy looked in testing and how it performs with real money.

[Execution]

Forward Testing

Running a strategy on new market data in real time, before you risk real money on it.

[Execution]

Tilt

The emotional state where you stop trading your system and start trading your feelings.

[Psychology]

Revenge Trading

Trying to win back a loss right away by forcing trades you never planned.

[Psychology]

Discipline

Following your system the same way every time, especially when you don't feel like it.

[Psychology]

Consistency

Producing steady, repeatable results by trading the same way every time.

[Psychology]

Turn trading knowledge into evidence.