Crypto trading bot glossary
A plain-English reference for the terms you will meet building and running crypto trading bots — each linking to a deeper explainer or feature page.
Crypto trading bot glossary, explained.
Automated crypto trading comes with its own vocabulary — a mix of trading jargon, statistics, and machine-learning terms. This glossary defines the words you will run into most often, in plain English, so you can read strategy guides and platform features without getting lost.
Each term below links to a fuller explanation — a learn article, a feature page, or the VolatiCloud knowledge center — so you can go as deep as you like. The definitions are intentionally short; the linked pages carry the detail.
Browse the glossary.
Short, plain-English definitions — follow any term to a deeper explainer.
From idea to a running bot.
The terms fall into a few groups; here is how to think about them.
Strategy & indicators
Words like RSI, moving average, crossover, DCA, grid, mean reversion, and momentum describe how a strategy decides to enter and exit a trade.
Validation & risk
Backtesting, dry-run, drawdown, Sharpe ratio, profit factor, and Monte Carlo describe how you test a strategy and measure its risk before going live.
Machine learning
FreqAI, reinforcement learning, reward function, and overfitting describe model-driven approaches and the main trap to avoid when using them.
Platform & custody
Non-custodial, API key, dry-run mode, runner, and encryption describe how a bot connects to your exchange and keeps your credentials safe.
Built for the way you trade.
Use the glossary however suits you.
Newcomers
Skim the terms before reading a strategy guide so the jargon does not slow you down. Follow any term to a fuller explainer.
Builders
Use it as a quick reference while building a strategy — each entry links to the feature page that puts the concept into practice.
- Plain-English definitions of common bot terms
- Every term links to a deeper explainer or feature
- Covers strategy, validation, risk, and machine learning
- Deeper detail in the VolatiCloud knowledge center
Frequently asked questions.
What is the difference between backtesting and dry-run?
Backtesting replays a strategy on historical data to estimate past performance. Dry-run (paper trading) runs the strategy on live, real-time prices but with simulated money, so you see current behaviour without risking capital.
What does non-custodial mean?
It means the platform never holds your funds. Your assets stay on your own exchange, and the bot only places orders via an API key — ideally one with withdrawals disabled.
What is drawdown?
Drawdown is the peak-to-trough decline in account value. Maximum drawdown — the worst such drop — is one of the most important risk metrics, because it tells you how bad things got, not just the average.
Where can I learn more?
Each glossary term links to a learn article, a feature page, or the VolatiCloud knowledge center at docs.volaticloud.com, where deeper concepts are documented in detail.
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