Glossary

Quick definitions of terms you'll encounter in AurexTrade.

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API Token: A secret key that authorises AurexTrade to communicate with your broker account on your behalf. Generated in the OANDA Hub and entered once in Settings → Broker.
ATR (Average True Range): A measure of how much the price typically moves in a given period. Used to set stop-losses at a sensible distance from the current price. Higher ATR = more volatile market.

Broker: A service that connects you to financial markets and executes trades. AurexTrade uses OANDA as its broker for market data and trade execution.
Backtest: Running a strategy against historical (past) market data to see how it would have performed. No real money is involved.
Bar: A single unit of price data for a time period. Each bar contains the open, high, low, and close prices. A "1-minute bar" (M1) represents one minute of trading.

Capital: The amount of money you start with in a test (or in real trading). Default is $100,000 in backtests.
Commission: A fee charged by the broker for executing a trade. Measured in dollars per trade.
Connection Test: A verification step that confirms your broker credentials are valid by contacting the broker's API. Use this after entering credentials to make sure they work before saving.

Drawdown: The drop from a peak (highest point) to a trough (lowest point) in your account balance. If your account goes from $110,000 to $95,000, the drawdown is $15,000 (or about 13.6%).

Encryption Key: A secret value used to protect your broker credentials at rest. Generated once when you set up the application and stored in your server's environment. Without this key, stored credentials cannot be decrypted.
Equity Curve: A chart showing how your account balance changes over time during a test. Ideally slopes upward smoothly.
Expectancy: The average profit or loss per trade. Positive expectancy means the strategy makes money on average.

Granularity: The time period each price bar represents. M1 = 1 minute, M5 = 5 minutes, H1 = 1 hour, D = 1 day. Smaller granularity means more data points and more detailed testing.

Kill Switch: An emergency stop that immediately halts all trading. Used when something goes wrong and you want to stop everything instantly.

Long (Buy): Buying an asset because you expect the price to go up. You profit if the price rises after you buy.

Max Drawdown: The worst (largest) drawdown during a test period. Tells you the most painful losing streak you would have experienced.
Moving Average (MA): A smoothed version of the price that filters out short-term noise. Calculated by averaging the last N bars. A 10-bar MA averages the last 10 prices.

OANDA: The broker that AurexTrade connects to for market data and trade execution. Offers free demo accounts with virtual money for risk-free testing.
Overbought: When the RSI is above a high threshold (default 70), suggesting the price has risen too fast and may pull back.
Oversold: When the RSI is below a low threshold (default 30), suggesting the price has fallen too fast and may bounce back.
Overfitting: When a strategy's parameters are so perfectly tuned to past data that they don't work on new data. Like memorising exam answers instead of learning the subject.

Practice Account: A free broker account that uses virtual money. Lets you test strategies without financial risk. Also called a "demo account".
Parameter: A setting that controls how a strategy behaves. For example, the "short window" in SMA Crossover controls how quickly the fast moving average reacts.
Parameter Sweep: Testing every combination of parameter values to find the best-performing settings. Also called a grid search.
P&L (Profit and Loss): The total money made or lost. Positive = profit, negative = loss.
Position: A current holding — you have an open position when you've bought (or sold short) and haven't yet closed the trade.
Profit Factor: Total money won divided by total money lost. Above 1.0 = profitable.

RSI (Relative Strength Index): A number from 0 to 100 that measures how fast the price has been moving up vs. down recently. Used to identify overbought and oversold conditions.

Sharpe Ratio: A measure of risk-adjusted return. Higher is better. Tells you how much return you get per unit of risk (volatility).
Short (Sell): Selling an asset because you expect the price to go down. You profit if the price falls after you sell. (In CFD trading, you can sell without owning the asset.)
Signal: A buy or sell recommendation generated by a strategy. The strategy looks at market data and decides: buy, sell, or do nothing.
Slippage: The difference between the price you expected and the price you actually got. In fast-moving markets, prices can change between your decision and execution.
SMA (Simple Moving Average): A type of moving average that gives equal weight to all bars in the window. A 10-bar SMA is the average of the last 10 closing prices.
Spread: The difference between the buy price and sell price offered by the broker. This is a cost you pay on every trade. Measured in pips (price units).
Stop-Loss: A price level at which a trade is automatically closed to limit losses. If you buy at $100 with a stop-loss at $95, the trade closes automatically if the price drops to $95, limiting your loss to $5.

Trade Frequency: How often the strategy opens trades. Higher frequency means more opportunities but also more commission costs.

Walk-Forward Validation: A test that splits data into alternating learning and exam periods to check if optimised parameters work on unseen data. The gold standard for strategy validation.
Window: In walk-forward testing, a "window" is one learning + exam pair. Multiple windows test the strategy across different time periods.