Glossary
A collection of key terms used throughout the bootcamp, briefly explained.
Trading Fundamentals
Edge — A measurable, statistical advantage that makes you more likely to be profitable than unprofitable over a large number of trades. Simply put, a pattern that repeats itself over a longer period.
Setup — A specific set of market conditions that must all be present before a trade is considered. A setup defines what you are looking for, not when to enter.
Entry — The exact moment and price at which you open a position. A good entry is in a discount zone with clear confirmation signals.
Exit — The moment and price at which you close a position, either at a profit (take profit), a loss (stop loss), or through a trailing/time-based rule.
Position — An active trade. Being "in a position" means you currently hold an asset with the risk of gaining or losing money.
Exposure — Having open trades or positions with the risk of losing money. The longer you are exposed, the higher the risk of unforeseen events.
Long / Long-only — Buying an asset with the expectation that its price will rise. A long-only strategy only bets on upward moves, never on downward ones.
Notional — The total dollar value of a position. A notional size of $100 means you hold $100 worth of the asset.
Risk Management
Risk/Reward Ratio — The relation between your average loss and your average gain per trade. A ratio of 1:3 means you risk $1 to potentially gain $3.
Win Rate — The percentage of trades that end in profit. A 50% win rate means roughly half your trades are winners over a large sample.
Position Size — The quantity of an asset you buy or sell in a single trade. Calculated as: (Account Balance x Risk%) / Stop Loss Distance.
Stop Loss — A pre-defined price level at which you exit a losing trade to limit your loss. It should be placed at a level where your thesis is invalidated.
Take Profit — A pre-defined price level at which you exit a winning trade to lock in gains.
Trailing Stop — A stop loss that moves in your favor as the price moves. For example, exiting when the price closes below the lowest low of the last N candles.
Time Stop — A rule that forces an exit after a maximum number of candles or days, regardless of profit or loss. Prevents trades from drifting into long-term holds.
Stop Cap — A maximum allowed distance between entry price and stop loss, expressed as a percentage. Prevents excessively large losses on wide-range breakout candles.
Max Drawdown — The largest peak-to-trough decline in your account equity during a given period. It measures the worst losing streak you experienced.
Daily/Weekly/Monthly Loss Limit — A threshold of cumulative losses after which you stop trading for that period. A safety net to prevent emotional overtrading after a bad streak.
Price Action & Chart Reading
OHLCV — Open, High, Low, Close, Volume. The five data points that describe a single candlestick on a chart. Open is the first price, High and Low are the extremes, Close is the last price, and Volume is how much was traded.
Candlestick (Candle) — A visual representation of price movement over a fixed time period (e.g., 1 minute, 1 hour, 4 hours, 1 day), showing OHLCV data.
Timeframe — The duration each candle represents. Common timeframes: 1m, 5m, 15m, 1h, 4h, 1d. Lower timeframes give faster feedback but more noise.
Wick — The thin line above or below the candle body, showing how far the price moved beyond the open/close. Long wicks indicate rejection at a price level.
Swing High / Swing Low — A local peak (swing high) or trough (swing low) in price action. These define the boundaries of the current price range and are used to identify the "setting" of a chart's story.
Premium Zone / Discount Zone — The upper and lower halves of the current swing range, divided by the midpoint. Buying in the discount zone (below the midpoint) is more favorable because the price has more room to rise.
Support — A price level where buying pressure has historically prevented the price from falling further.
Resistance — A price level where selling pressure has historically prevented the price from rising further.
Conflict Zone — A price area where buyers and sellers are actively competing for control, visible through overlapping wicks, reversals, and indecision candles.
Breakout — When the price moves decisively above resistance or below support, signaling the start of a new directional move.
Price Action — The movement of price over time, read directly from the chart without relying on indicators. The raw story the market is telling.
Market Structure & Mechanics
Market Mechanics — The underlying dynamics of how and why price moves: participant behavior, order flow, volume, and the interplay between buyers and sellers.
Market Structure — The pattern of swing highs and swing lows that defines the current trend direction (uptrend: higher highs and higher lows; downtrend: lower highs and lower lows).
Volume — The total quantity of an asset traded during a given period. High volume confirms conviction behind a move; low volume suggests weakness.
Liquidity — How easily an asset can be bought or sold without significantly affecting its price. Measured by volume and order book depth.
Relative Strength — How well an asset is performing compared to a benchmark (e.g., BTC). A coin rising while BTC is flat shows genuine strength, not just following the market.
Volatility — How much the price fluctuates over a given period. Higher volatility means bigger swings in both directions.
Volatility Compression — A period where short-term volatility decreases relative to long-term volatility, suggesting that price is "coiling" before a directional move. Measured by the ratio of short-term to long-term standard deviation of returns.
Stop Hunt / Liquidity Grab — A sharp price move designed to trigger stop losses of other participants before reversing. Common in crypto markets.
Funding Rate Flush — In perpetual futures markets, the funding rate is a periodic payment between long and short holders to keep the futures price anchored to spot. When the rate becomes extreme (e.g., heavily positive = too many longs), a sharp reversal can occur as overleveraged positions get liquidated. Even if you trade spot only, funding rate flushes affect spot prices because the liquidation cascades spill across markets.
Congestion — A price area where candles overlap heavily, with each candle's body staying within the range of the previous candle. Neither buyers nor sellers can sustain a move. A cluster of 4+ overlapping candles defines a congestion zone. Often precedes a breakout.
Beta — A measure of how much an asset moves relative to a benchmark (e.g., BTC). A beta of 1.5 means the asset tends to move 1.5x as much as the benchmark. High-beta altcoins amplify both gains and losses relative to BTC.
Neckline — In a double bottom or double top pattern, the neckline is the horizontal level at the peak between the two bottoms (or the trough between the two tops). A breakout above (or below) the neckline confirms the pattern.
Indicators & Signals
SMA (Simple Moving Average) — The average closing price over the last N candles, recalculated with each new candle. Used as a trend filter (e.g., price above the 50-day SMA = uptrend).
EMA (Exponential Moving Average) — Similar to SMA but gives more weight to recent prices, making it more responsive to current moves.
MA Cross — When a fast-period moving average crosses above or below a slow-period moving average, signaling a potential trend change.
ATR (Average True Range) — A measure of average volatility over N candles. Useful for setting stop losses that respect the asset's natural price movement.
Bollinger Bands — Bands plotted at a distance of N standard deviations above and below an SMA. Narrowing bands indicate compression; expanding bands indicate a breakout.
Annualised Volatility — The standard deviation of returns scaled to a yearly period. For 4H candles: StdDev x sqrt(2190), where 2190 = 6 candles/day x 365 days.
Percentile Rank — Where a value falls relative to all other values in a set. The 75th percentile means it is higher than 75% of the group.
Strategy Assessment
Backtest — Running a strategy against historical data to see how it would have performed. Results are an approximation, not a guarantee of future performance.
Sharpe Ratio — A measure of risk-adjusted return. Calculated as (return - risk-free rate) / standard deviation of returns. Higher is better. Above 1.0 is generally considered acceptable; above 2.0 is strong.
Profit Factor — Total gross profit divided by total gross loss. A profit factor of 2.0 means you make $2 for every $1 you lose. Below 1.0 means the strategy loses money overall.
CAGR (Compound Annual Growth Rate) — The annualised rate of return, smoothing out the ups and downs into a single yearly percentage.
In-Sample — The data used to design and tune a strategy. Results on in-sample data are optimistic because the parameters were chosen to fit that specific data.
Out-of-Sample — Data that was not used during strategy design or tuning. Performance on out-of-sample data is a more honest estimate of real-world results.
Walk-Forward Validation — A method where you tune parameters on one time window, test on the next, then shift both windows forward and repeat. Simulates real-world parameter updates.
Sensitivity Analysis — Systematically varying strategy parameters to understand how performance changes. Reveals whether results depend on a narrow parameter choice or are robust across a range.
Slippage — The difference between the expected trade price and the actual execution price. Caused by delays and market movement between signal and execution.
Calmar Ratio — CAGR divided by maximum drawdown. Measures return relative to worst-case pain. Above 1.0 means the annual return outweighs the worst drop. Above 2.0 is strong.
Equity Curve — A chart plotting the cumulative value of a trading account over time. A smooth, upward-trending curve indicates a consistent edge. Long flat periods followed by sudden jumps suggest returns depend on a few lucky trades rather than a repeatable process.
MFE (Maximum Favorable Excursion) — The largest unrealised gain a trade reaches before it is closed. If you entered at $100 and the price peaked at $115 before you exited at $110, the MFE is +15%. Useful for evaluating whether your exit rules leave too much profit on the table.
MAE (Maximum Adverse Excursion) — The largest unrealised loss a trade experiences before it is closed. If you entered at $100 and the price dipped to $95 before recovering to your exit at $108, the MAE is -5%. Useful for evaluating whether your stop loss is too tight or too wide.
Overfitting — Tuning a strategy's parameters so precisely to historical data that it captures noise rather than genuine patterns. An overfitted strategy performs brilliantly on past data but poorly on new data. The primary defence is out-of-sample validation.
Look-Ahead Bias — A backtest error where the strategy uses information that would not have been available at the time of the trade. For example, using a candle's close price to make a decision that should have been made before the candle closed. Produces unrealistically good results.
Strategy Components
Universe — The full set of tradable instruments that a strategy considers. Filtered by criteria like minimum volume before scanning for setups.
Scan Filter — A rule that narrows the universe to candidates worth watching. All filters must pass simultaneously for a symbol to qualify.
Entry Trigger — The final condition that converts a watchlist candidate into an actual trade. Typically a breakout confirmed by volume.
Signal Selection — The rule for choosing between multiple simultaneous entry triggers. For example, ranking by relative strength and taking only the top-ranked symbol.
Trend Guard — A filter that prevents trading against the dominant trend. Commonly implemented as "price must be above the N-period SMA."
Micro Strategy — A short-term strategy with trades lasting less than 4 hours. Designed for fast feedback and minimal overnight exposure. Different from scalping because entries include pre-set stop loss and take profit levels.
AI & Agent Concepts
Agent — An LLM configured with a specific role, mission, and constraints via a system prompt (CLAUDE.md). Each agent specializes in one area.
CLAUDE.md — The configuration file that defines an agent's personality, role, and rules. Placed in the agent's project folder.
Skill — A specialized capability given to an agent, similar to a plugin. For example, fetching OHLCV data from a local database or placing orders on Binance.
Prompt Refinement — The iterative process of improving a prompt to get better results from an LLM. Start simple, evaluate output, adjust constraints, repeat.
Tool — A function or script that extends an LLM's capabilities beyond conversation. Without tools, an agent can only talk about solutions; with tools, it can execute them.
Loop / Cron — A periodic trigger that re-runs an agent at set intervals. Used to automate recurring tasks like trading sessions. Active only during the Claude Code session.
Binance-Specific
Spot Trading — Buying and selling the actual asset (e.g., buying real SOL), as opposed to derivatives or futures.
USDT — Tether, a stablecoin pegged to the US dollar. The most common quote currency for crypto trading pairs on Binance.
Testnet / Demo Mode — A simulated Binance environment with fake funds for testing strategies without risking real money. API keys are separate from Mainnet.
Mainnet — The real Binance trading environment where trades involve actual money.
API Key / Secret — Credentials that allow programmatic access to your Binance account. Must be protected carefully, especially for Mainnet.
Notional Volume — The total dollar value of all trades in a given period. Calculated as price x quantity for each trade, summed up.
Activity Ratio — A measure of how active a market is right now compared to its own recent average. Calculated as the number of trades in the last 60 minutes divided by the average trades per 60-minute window over the last 24 hours. A ratio above 1.0 means the market is more active than usual. Used by the bootcamp's scanner to find symbols worth trading in the manual exercise.