Glossary
Updated
Every trading term used in this guide, explained in plain English. Skim it whenever a word trips you up.
- ATR (Average True Range)
- The average size of the last 14 candles — roughly "one candle" of movement. OptiTrade measures Stop Losses in ATR so they adapt to each market's volatility.
- Backtest
- Running a strategy over past price data to see how it would have performed. Shown in OptiTrade's Dashboard and TradingView's Strategy Tester.
- Bollinger Bands
- Volatility bands around price. When price rides the upper band it's relatively high; the lower band, relatively low.
- Connector
- A third-party service (e.g. TradeAdapter, SignalStack) that receives OptiTrade's alerts and places the trades on your broker automatically.
- Drawdown
- How far your account balance falls from a peak to a low point — a measure of how rough the ride is. Lower is safer.
- EMA (Exponential Moving Average)
- An average of recent prices that reacts faster to new moves than a simple average. Analyzer Pro reports price direction against the 50-period EMA.
- Fibonacci levels
- Horizontal levels (0.236, 0.382, 0.5, 0.618) drawn across a swing where price often finds support or resistance. Analyzer Pro can draw these for you.
- MACD
- A momentum indicator that compares two moving averages to show whether momentum is bullish or bearish, and how strong it is.
- Pivot high / low
- A local swing top or bottom — a candle higher (or lower) than the candles around it. Used to build support/resistance zones and to detect chart patterns.
- Chart pattern
- A large shape price draws over many candles — a triangle, wedge, channel or flag. Patterns Pro finds and draws these automatically.
- Candlestick pattern
- A short formation of two to six candles that often marks a turning point. Patterns Pro labels these as Bull or Bear.
- Profit Factor
- Total winnings divided by total losses. Above 1 means profitable; the higher, the better.
- RSI (Relative Strength Index)
- A 0–100 momentum gauge. Above ~70 is often "overbought", below ~30 "oversold". OptiTrade's RSI Filter steers signals toward better odds.
- Risk-Reward ratio
- How big your target is compared to your risk. A Stop Loss of 2 with a Risk-Reward of 3 means a target of 6 — you aim to make 3× what you risk.
- Signal Length
- OptiTrade's master dial for how many signals appear. Lower = more, faster signals; higher = fewer, cleaner ones.
- Stop Loss (SL)
- The price where a losing trade is closed to cap the loss. Your safety net.
- Take Profit (TP)
- The price where a winning trade is closed to book profit. TP-SL supports up to four.
- VWAP
- Volume-Weighted Average Price — the average price weighted by volume. A common reference for whether price is 'expensive' or 'cheap' on the day.
- WaveTrend AI
- OptiTrade's smooth colour overlay showing trend and momentum. Purely visual context — it doesn't generate the trade signals.
- Webhook
- A special link an alert can post to. Pasting your connector's webhook into an alert is what lets OptiTrade trade automatically.
- Win Rate
- The percentage of trades that finish in profit. Important, but total profit matters more.