Trading Terms Explained — Forex & Crypto Signal Glossary

Definitions of the terms behind our signals. Each one describes how the term is used in the engine that actually generates and scores them, not just what it means in general.

RSI (Relative Strength Index)

A momentum oscillator from 0 to 100 measuring how one-sided recent price moves have been. Low readings suggest selling has been heavy, high readings that buying has.

We compute RSI over 14 periods. A reading below 35 counts as one bullish point in our score, above 70 as one bearish point, and anything between is treated as neutral rather than forced into a direction. RSI describes what has already happened — it is not a prediction, and an asset can stay “oversold” for a long time.

MACD (Moving Average Convergence Divergence)

A momentum indicator built from the gap between two exponential moving averages, plus a signal line. The histogram shows whether momentum is building or fading.

We use the standard 12/26/9 settings and look only at the sign of the histogram: positive contributes one bullish point, negative one bearish point. Using the sign rather than the magnitude keeps the score robust — magnitude varies enormously between assets and would let one volatile asset dominate.

Moving average (SMA / EMA)

The average closing price over a fixed number of periods, recalculated each period. A simple moving average weights every period equally; an exponential one weights recent periods more heavily.

We compare a 20-period average against a 50-period average to classify trend: 20 above 50 is an uptrend (one bullish point), below is a downtrend. We separately check whether the latest price sits above or below the 20-period average. That means trend contributes twice to the score, deliberately — direction matters more than any single oscillator.

Reward-to-risk ratio

How far the target sits from entry compared with the stop. A 2:1 ratio means the target is twice as far away as the stop, so one win covers two losses.

Every signal we publish is fixed at 2:1 — the stop is always placed at exactly half the target distance. Holding this constant is what makes a win rate interpretable: at 2:1, break-even sits at a 33% hit rate. Without knowing the reward-to-risk, a win rate on its own tells you nothing.

Win rate

The share of decided signals that reached their target rather than their stop. Expired signals, which reached neither, are excluded.

We do not publish a win rate until at least 20 signals have resolved to a win or a loss. Below that, a single outcome moves the figure by five percentage points or more, which makes it decoration rather than measurement. A high win rate paired with a poor reward-to-risk is usually worse than the reverse.

Expectancy

The average signed return per signal across every resolved outcome — the number that actually determines whether a strategy makes money.

Expectancy folds the win rate and the reward-to-risk into one figure. A positive expectancy means the average signal gains; negative means it loses, no matter how impressive the win rate looks. We compute it across all resolved signals, including expired ones, so signals that quietly drifted still count against it.

Profit factor

Gross profit divided by gross loss. Above 1.0 means winners outweighed losers in total; below 1.0 means the opposite.

Profit factor is harder to flatter than a win rate because it is driven by the size of outcomes rather than their count. A strategy winning only a third of the time can still show a profit factor comfortably above 1.0 if its winners are large enough.

Stop loss

A predetermined exit level that caps the loss on a position if price moves against it.

Our stops are derived, never chosen: always half the target distance. They are set when the signal publishes and never moved afterwards. Moving a stop after the fact is the most common way a track record gets quietly inflated.

Target (take profit)

The price level at which a signal is considered to have succeeded.

Targets are scaled to each asset’s own Average True Range rather than a fixed percentage: the stop sits 2.5 ATR from entry and the first target at twice that distance. A fixed percentage would be unreachable on low-volatility assets and hit by ordinary noise on high-volatility ones.

Average True Range (ATR)

How much an asset typically moves in a period, including any gap from the previous close.

This is the input that sizes every level we publish — entry zone, stop and both targets. True range is the greatest of a bar’s own high-to-low span and its two distances from the previous close, so a gap is inside the measurement. That is why it replaced a standard-deviation-of-closes estimate: close-to-close cannot see a gap at all, so a stock that closes at 100 and opens at 94 registers as one ordinary change while a trader is already through their stop. It is backward-looking by definition — it measures what has happened, not what will — but it means a Solana stop and an Apple stop are set on comparable terms.

Maximum favourable / adverse excursion

How far a position moved in your favour, and against you, before it finally resolved.

We record both for every resolved signal and publish them on each asset page. They reveal something a bare win or loss hides: a losing trade that first ran 3% into profit, or a winner that spent most of its life underwater. Most signal providers never publish these, because they expose how much of a result came from sequencing rather than edge.

Expired signal

A signal that reached neither its target nor its stop within its time horizon.

Rather than discard these — which would silently delete every mediocre outcome from the record — we score them on the signed close-versus-entry return. The horizon is 30 days. Expired signals are excluded from the win rate but included in expectancy.

Educational content, not financial advice. Trading carries risk, including loss of capital.