Glossary
The jargon, decoded.
The 56 words of automated investing, from the broker account to the verification of a strategy, explained in plain terms.
Every term, at a glance.
Eight themes, read in order or out of curiosity, and every term opens its full definition.
Account and money
The basic units your broker account is measured in.
- Equity The live value of your broker account, including the floating profit or loss of open positions.
- Balance The cash sitting on your broker account, before the profit or loss of any open positions.
- Margin The portion of your equity the broker sets aside as collateral while a position is open.
- Leverage The ratio between the size of a position and the deposit your broker requires to open it.
- Lot Size The unit a forex order is measured in. One standard lot equals 100,000 units of the base currency.
Markets and instruments
The asset classes a strategy can trade, and what makes each one move.
- Gold (XAUUSD) Gold quoted against the US dollar, XAUUSD: a deep, liquid market that trades almost around the clock and moves on rates, the dollar and fear.
- Silver (XAGUSD) Silver quoted against the US dollar, XAGUSD: gold's smaller, more volatile sibling, pulled by industry as much as by investors.
- Forex Currency pairs such as EURUSD or GBPJPY: the largest and most liquid market in the world, open around the clock five days a week.
- Crypto Bitcoin, Ether and other crypto assets, traded as contracts on the broker account: priced every hour of every day, and far more volatile than currencies.
- Indices Stock market indices such as the S&P 500, the Nasdaq 100 or the DAX, traded as one contract that tracks a whole market.
- Energy Crude oil and natural gas, traded as contracts on the account: prices driven by OPEC, inventories, weather and geopolitics.
- Stocks Listed shares and exchange-traded funds such as Apple or an S&P 500 tracker, bought and sold in whole shares on an exchange rather than as contracts.
- Multi-asset A strategy whose trade history spans more than one asset class: metals and currencies, or indices and crypto, in the same book.
Order mechanics
How orders are placed, priced, and filled on a broker account.
- Pip The smallest standard price increment on a currency pair, usually the fourth decimal.
- Spread The gap between the bid and ask price of an instrument, paid implicitly on every entry.
- Order Type The instruction sent to the broker that tells it how and when to fill an order.
- Limit Order A pending order that fills only at the specified price or a better one, never worse.
- Market Order An order that fills immediately at the best available price the broker offers right now.
- Stop Loss An exit order that closes a losing position the moment a chosen price level is hit.
- Take Profit An exit order that closes a winning position the moment a chosen price level is reached.
- Slippage The gap between the price you asked for on an order and the price the broker actually filled it at.
- Basis point (bps) A price gap written as a fraction of the price, so the same execution quality reads the same on every instrument.
- Execution How the broker turns an order into a real fill: speed, routing, and the price you actually get.
- Position A single entry held on the broker account, with a direction, a size, and a current floating result.
Risk management
The terms that describe how much you can lose, and how you limit it.
- Risk Profile Javlot's four-step scale, from conservative to extreme, describing how much a strategy is willing to lose to make its gains.
- Drawdown The drop in account equity from a peak to the trough that follows, expressed as a percent of the peak.
- Risk-Reward Ratio The ratio of a position's potential loss to its potential gain, set by the stop loss and take profit.
- Position Sizing The rule that decides how large each position should be, given account equity and risk per position.
- Risk per Trade The slice of account equity a single position can lose if its stop loss hits.
Performance metrics
The numbers used to describe a strategy after the fact.
- Profit The gain or loss on a closed position, once spreads, commissions, and swaps are taken out.
- Total Profit The sum of every closed position result over a period, winners and losers combined.
- Gains The sum of every winning position in a period, before losing positions are subtracted.
- Loss The realized loss on a closed position, or the sum of every losing position across a period.
- Win Rate The percentage of closed positions that ended in profit over a given period.
- Profit Factor Gross winning amount divided by gross losing amount over a period. Above 1 means net positive.
- Sharpe Ratio Return per unit of volatility: average return above a baseline, divided by the standard deviation of those returns.
- Sortino Ratio Like Sharpe, but only counts downside volatility, not upside swings.
- Z-Score A statistical measure of whether a strategy's win and loss streaks are truly random.
- GHPR (Geometric Holding Period Return) The compounded average return per position, more honest than a simple arithmetic average.
- Expectancy The average expected profit or loss per position, computed from win rate and average win and loss size.
Strategy styles and timeframes
How algorithms approach the market and over what horizon.
- Ultra-scalping The fastest style on the platform: positions opened and closed within seconds, in volume, where execution quality decides the result.
- Scalping A short-horizon style that opens and closes positions within minutes, targeting small per-position moves.
- Day Trading A style that opens and closes positions within the same trading day, with no overnight exposure.
- Swing Trading A style that holds positions across several days to a few weeks, targeting mid-horizon moves.
- Position Trading A long-horizon style that holds positions for weeks to months, riding multi-week trends.
- Time Horizon The stretch of time a strategy is built to be judged over: weeks, months, or a year and more.
- Trend Following An approach that buys what is rising and sells what is falling, riding moves until they reverse.
- Mean Reversion An approach that fades extremes, betting that price will return to its average after stretching too far.
- Breakout An approach that enters once price crosses a defined level, riding the move that follows.
- Grid Trading A ladder of pending orders placed at regular intervals, designed to catch repeated price oscillations.
- Martingale A position-sizing scheme that doubles up after each loss, betting that the next position will recover everything.
Brokerage models
How different broker types route and price your orders.
- ECN Broker A broker that routes client orders directly into an electronic communication network of liquidity providers.
- STP Broker A broker that passes client orders straight through to its liquidity providers without taking the other side.
- Market Maker A broker that takes the other side of client positions in-house, instead of routing them externally.
Verification
How a strategy is checked before and after it goes live.
Glossary entries are educational. They describe how a term is commonly used in automated forex investing, including on the Javlot platform. They are not a personalized recommendation and not a forecast. Past performance does not guarantee future results.