Glossary
Definitions of key trading and platform terms.
Glossary
Quick-reference definitions for trading and NexusTrade-specific terms.
Alpha — The excess return of a strategy compared to a benchmark (usually SPY). Positive alpha means the strategy outperformed the market.
Backtesting — Testing a trading strategy against historical market data to evaluate how it would have performed.
Benchmark — A reference index used for comparison. NexusTrade uses SPY (S&P 500) as the default benchmark.
Bollinger Bands — A technical indicator consisting of a moving average with upper and lower bands at standard deviations from the mean.
Compound Condition — A condition that combines two or more sub-conditions using AND or OR logic.
Compound Indicator — An indicator created by combining two indicators with a math operator (+, -, ×, ÷).
Condition — A boolean expression (true/false) that determines when a strategy's action should execute.
Dollar Cost Averaging (DCA) — Investing a fixed dollar amount at regular intervals, regardless of price.
Drawdown — The decline from a peak to a trough in portfolio value. Max Drawdown is the largest such decline.
EMA (Exponential Moving Average) — A moving average that gives more weight to recent prices.
Genetic Algorithm — An optimization technique that mimics natural selection to find better strategy parameters.
Golden Cross — When the 50-day SMA crosses above the 200-day SMA. Considered a bullish signal.
Indicator — Any numerical value used in a condition (e.g., SMA, RSI, Price, Revenue).
MACD — Moving Average Convergence Divergence. A momentum indicator measuring the relationship between two EMAs.
Max Drawdown — The maximum percentage decline from peak to trough during a backtesting period.
Mean Reversion — The theory that asset prices tend to return to their average over time.
Momentum — The tendency for assets moving in one direction to continue moving in that direction.
Optimization Vector — A single result from the genetic algorithm optimizer — a portfolio variant with its strategies and performance metrics.
Overfitting — Creating a strategy so perfectly tuned to historical data that it fails on new, unseen data.
Paper Trading — Simulated trading using real market data but no real money. Used for strategy validation.
Portfolio — A container holding cash, positions, and strategies in NexusTrade.
Position — The amount of an asset you currently hold (e.g., 100 shares of AAPL).
Launch Agent — A strategy action that launches an autonomous AI agent to analyze and act on your portfolio when conditions trigger.
Rebalance — In NexusTrade, implemented as Dynamic Rebalance: pick a universe, run an ordered pipeline (filter / select top / select percentile), assign weights with a weight indicator, optionally cap total invested percent, then trade toward that target mix when the strategy condition fires.
Research Token — A unit of Aurora AI usage. Actions like creating strategies, running backtests, and researching stocks consume tokens.
ROC (Rate of Change) — The percentage change in price over a specified period.
RSI (Relative Strength Index) — A momentum oscillator (0-100) measuring the speed of price changes. Below 30 is oversold, above 70 is overbought.
Sharpe Ratio — A measure of risk-adjusted return. Calculated as (Return - Risk-Free Rate) / Standard Deviation. Higher is better; > 1.0 is generally good.
Slippage — The difference between the expected price of a trade and the actual execution price.
SMA (Simple Moving Average) — The average closing price over N periods. All periods weighted equally.
Sortino Ratio — Like Sharpe Ratio but only penalizes downside volatility, not upside volatility. Generally considered a better measure.
Strategy — A rule in NexusTrade consisting of conditions (when to trade) and an action (what to do).
Syntax Tree — The tree structure used to evaluate strategy conditions. Compound conditions branch into sub-conditions.