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(01) The Lexicon

Crypto trading terms, explained.

The Lexicon defines the terms behind researching, building, testing and monitoring crypto strategies. Each entry gives a plain definition, a worked example and what to watch for.

(02) Testing

Backtesting Backtesting is testing a trading strategy's rules on historical market data to estimate how the strategy would have performed in the past.
Overfitting Overfitting is when a trading strategy is tuned so closely to past data that it captures noise instead of a real pattern, and then fails on new data.

(03) Performance

Net Return Net return is the total percentage gain or loss of a strategy or investment over a period, measured from its starting value to its ending value.

(04) Risk

(05) Strategies

Mean Reversion Mean reversion is the idea that a price that moves far from its average tends to move back toward that average over time.

Put the terms to work on your own ideas.

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