Trading Glossary

Measures the ratio of gains to losses over the past 14 candles, ranging from 0-100. >70 is overbought, <30 is oversold.

The difference between EMA12 and EMA26, with an EMA9 of that difference as the signal line. Golden crosses/death crosses are common entry/exit signals.

SMA20 plus or minus 2 standard deviations. Prices above the upper band are often considered overbought, and below the lower band oversold; extremely narrow bands (squeezes) indicate an impending breakout.

The average volatility range over the past 14 candles, reflecting current volatility intensity. Commonly used to set SL distances.

Measures trend strength (regardless of direction). >25 indicates a clear trend, <20 indicates consolidation.

The multiple of current volume relative to the 20-period average. >2x is high volume, >3x is explosive volume, <0.5x is extremely low volume.

Market sentiment (0-100) calculated by Alternative.me using volatility, momentum, social media, Google Trends, etc. <25 is Extreme Fear, >75 is Extreme Greed.

The fee paid between long and short positions in perpetual contracts every 8 hours. Positive = longs pay shorts, negative = shorts pay longs. Extreme values indicate crowding and often lead to mean reversion.

The total number of unsettled contracts in the perpetual futures market. Price up + OI up = healthy bull trend; Price down + OI up = short accumulation.

The ratio of long positions to short positions among top accounts. >2 is crowded long, <0.6 is crowded short. Crowding is often followed by a reversal.

The ratio of open interest between Puts and Calls in options. >1 indicates hedging bias (pessimistic), <0.5 indicates excessive optimism (top warning).

The premium of Coinbase spot price relative to Binance. Positive values indicate US retail FOMO, negative values indicate sell pressure from non-US markets.

The percentage of the top 50 coins by market cap that have outperformed BTC over the last 90 days. >75% indicates Altseason, <25% indicates BTC dominance.

The standard deviation of Market Value vs. Realized Value. Historically, >7 often corresponds to cycle tops, while <0 corresponds to bottoms.

The ratio of total unrealized profit/loss to market cap. >0.75 indicates Euphoria, <0 indicates Capitulation.

When the 111-day SMA crosses the 350-day SMA × 2, it has historically been highly accurate in predicting BTC cycle tops.

A large candlestick that completely engulfs the body of the previous opposite candlestick, often viewed as a reversal signal.

A candlestick with an exceptionally long lower or upper wick, reflecting market rejection of a price level; a bottom/top signal.

Profitable trades ÷ total trades. Win rate alone is insufficient; it must be paired with an R/R ratio.

Average profit ÷ average loss. An R/R of 1.5+ combined with a 40%+ win rate is usually required for long-term positive expectancy.

The maximum percentage drop from peak to trough in equity. >30% suggests the strategy may be psychologically difficult to sustain.

(Average Return − Risk-Free Rate) ÷ Standard Deviation. Reflects return per unit of risk. >1 is acceptable, >2 is excellent.

A pre-set loss limit that triggers an automatic close. A trade without an SL is not trading; it is gambling.

A pre-set profit target that triggers an automatic close. It is recommended to use with a trailing stop.