Glossary
Quick reference for trading and platform terminology used throughout TradAI documentation.
Trading Terms
| Term | Definition |
| Backtest | Historical simulation of a trading strategy using past market data to evaluate performance |
| Drawdown | Peak-to-trough decline in portfolio value, measuring downside risk |
| Equity Curve | Graph showing portfolio value over time during a backtest or live trading |
| OHLCV | Open, High, Low, Close, Volume - standard candlestick data format |
| Pair | Trading pair notation (e.g., BTC/USDT:USDT for Bitcoin perpetual futures) |
| Sharpe Ratio | Risk-adjusted return metric; higher values indicate better risk-adjusted performance |
| Slippage | Difference between expected and actual execution price |
| Stake Amount | Capital allocated per trade |
| Stop Loss | Order to sell when price drops to a specified level to limit losses |
| Take Profit | Order to sell when price rises to a specified level to lock in gains |
| Timeframe | Data interval for candles (e.g., 1m, 5m, 1h, 1d) |
| Walk-Forward | Backtesting method that periodically retrains models on rolling windows |
| Win Rate | Percentage of trades that are profitable |
| Term | Definition |
| ArcticDB | High-performance time-series database used for storing OHLCV data on S3 |
| Backend Service | Main API gateway (port 8000) that orchestrates platform operations |
| Data Collection | Service (port 8002) responsible for fetching and storing market data |
| ECS Task | AWS container instance running a service or backtest job |
| Freqtrade | Open-source trading bot framework that TradAI extends |
| FreqAI | Freqtrade's machine learning module for ML-based strategies |
| MLflow | ML experiment tracking service (port 5000) for logging models and metrics |
| Step Function | AWS workflow orchestration for multi-step operations like backtesting |
| Strategy Service | Service (port 8003) that executes strategies and backtests |
| tradai-common | Shared library with base classes, entities, and AWS utilities |
| tradai-data | Library for market data fetching and ArcticDB storage |
| tradai-strategy | Library with strategy framework, validation, and metadata |
Configuration Terms
| Term | Definition |
| Dry Run | Simulation mode with paper trading (no real money) |
| Dry Run Wallet | Simulated starting capital for backtests |
| Hyperopt | Hyperparameter optimization to find best strategy settings |
| Stake Currency | Base currency for trading (typically USDT) |
| Strategy Config | YAML/JSON configuration defining strategy parameters |
| Timerange | Date range for backtesting (format: YYYYMMDD-YYYYMMDD) |
Metrics
| Metric | Description | Good Value |
| Sharpe Ratio | Risk-adjusted returns | > 1.0 |
| Sortino Ratio | Downside risk-adjusted returns | > 1.5 |
| Max Drawdown | Largest peak-to-trough drop | < 20% |
| Win Rate | Profitable trade percentage | > 50% |
| Profit Factor | Gross profit / Gross loss | > 1.5 |
| Expectancy | Average profit per trade | > 0 |
| CAGR | Compound Annual Growth Rate | Varies |
See Also