What is the difference between a backtest and a forward test?

A backtest replays history; a forward test runs live, on paper or testnet, on data that did not exist when the strategy was tuned. Forward results are the ones to trust.

Which margin mode should a beginner use?

Isolated margin limits a bad trade to its own collateral. TensorTrader trades some venues in cross margin by design, so size positions small and keep leverage low while you learn.

Blog · Crypto automation · Article · updated 2026-09-25

Crypto trading automation glossary: 40 terms from webhook to drawdown

Plain-English definitions of the terms you meet when you automate TradingView alerts on crypto exchanges, Hyperliquid and brokers, each linked to the guide that goes deeper.

How to use this glossary

Automated trading mixes three vocabularies: charting (TradingView alerts and Pine Script), exchange mechanics (margin, funding, order types) and risk statistics (Sortino, drawdown, profit factor). Each definition below is short enough to answer a quick question and links to the article that explains the idea in context. Terms are grouped alphabetically; use your browser search to jump to one.

Terms A-Z

Agent wallet (API wallet): A separate key that a DEX such as Hyperliquid allows to place and cancel orders for your address but never to withdraw. TensorTrader generates it in your browser and you approve it with one wallet signature.
alert(): A Pine Script function that fires an alert from inside script logic with a message the script builds itself. You create one TradingView alert on "Any alert() function call" to receive every call.
alertcondition(): A Pine Script declaration that names a condition, such as "Long entry", which you can pick when creating a TradingView alert. One alert per condition.
ATR (Average True Range): The average bar range including gaps, used for volatility-scaled stop-loss and take-profit distances and, as ATR% of price, to separate choppy from quiet markets.
ADX (Average Directional Index): A 0-100 measure of trend strength regardless of direction. TensorTrader treats ADX of 25 or more as a strong trend and 18 or more as a weak one.
Backtest: Running a strategy over historical data to estimate how it would have performed. Useful for ranking ideas, dangerous as a promise of future returns.
Batch Create: The TensorTrader Chrome extension tab that plans and creates many TradingView alerts at once across tokens, timeframes and exchange keys, without duplicates.
Cross margin: A margin mode in which every open position shares the account balance as collateral, so one losing position can draw on the whole account.
DCA across timeframes: Splitting one position into legs that fire on different timeframes, with margin weighted toward the base timeframe.
Drawdown: The fall from an equity peak to a later trough, as a percentage of the peak. Max drawdown is the worst such fall over a period.
Fill-based accounting: Booking profit and fees from the exchange’s own fill records instead of estimating from a ticker price. It is what makes a dashboard match the exchange.
Funding rate: A periodic payment between long and short holders of a perpetual future that keeps its price near the spot index. Positive funding means longs pay shorts.
Hysteresis: Requiring a new market regime to persist for several bars before switching, so a strategy does not flip settings on every wiggle.
Isolated margin: A margin mode where each position has its own collateral, limiting losses to that position.
Kernel regression: A smoothing technique that weights nearby data points more heavily. Lorentzian Classification uses a Nadaraya-Watson kernel line as a trend filter.
Leverage clamp: TensorTrader’s rule that the leverage actually used is the lower of your policy and the venue’s published maximum for that market.
Liquidation: The exchange closing a leveraged position because its margin can no longer cover losses.
Lorentzian Classification: A TradingView indicator by jdehorty that classifies the next move with a nearest-neighbour vote measured by Lorentzian distance over oscillator features.
Maker / taker fee: Makers add liquidity with resting limit orders; takers remove it with market orders. Taker fees are higher, and most bot entries pay them.
Market breadth: How many tokens move together in one direction. TensorTrader can scale leverage up as breadth leans with a trade.
Market regime: A label for current conditions. TensorTrader uses six: Bull+, Bull-, Bear+, Bear-, Chop and Quiet.
Multi-condition alert: A TradingView alert that fires only when several indicator conditions are true together. The extension combines up to five with AND.
Nearest neighbours (KNN): A method that predicts by looking at the most similar past situations and letting them vote.
Paper trading: Trading with simulated or testnet funds so you can check a setup end to end before risking money.
Passphrase: A third credential some exchanges (OKX, Bitget, KuCoin, BloFin, Kraken Futures) require alongside the API key and secret. You choose it when you create the key.
Perpetual future (perp): A futures contract with no expiry that tracks spot through funding payments. Most crypto bots trade perps.
Pine Script: TradingView’s scripting language for indicators and strategies.
Profit factor: Gross winning trades divided by gross losing trades. Above 1 means winners outweigh losers.
Reduce-only order: An order that can only shrink an existing position, used for stop-loss and take-profit so a protective order can never open a new trade.
Slippage: The difference between the price you expected and the price you got, usually worse for market orders in thin books.
Sortino ratio: Return per unit of downside volatility. Unlike Sharpe it ignores upside swings, so it rewards strategies that lose gently.
Strategy alert: A TradingView alert on a Pine strategy that fires on each simulated order fill and can pass {{strategy.order.action}} to the webhook.
study_error: A TradingView alert state meaning the script failed to calculate for that alert. Batch Create checks the first alert for it and stops the batch.
Testnet: An exchange’s practice network with test funds. Hyperliquid, BingX, Lighter, dYdX and others offer one.
Trade-only API key: An exchange key with trading and read permission but no withdrawal or transfer permission. The only kind TensorTrader accepts.
TT-Autotune: TensorTrader’s TradingView strategy that tunes Lorentzian Classification per token, timeframe and regime and switches settings with the regime.
Unified account: An account mode where spot balances count as margin for perps. Hyperliquid enables it by default for new accounts.
Walk-forward test: Tuning on one period and testing on the next, repeated across history, so results are measured on data the tuner never saw.
Webhook: An HTTP request TradingView sends when an alert fires. TensorTrader receives it, validates it and turns it into an order.
Webhook secret: A private value inside the alert message that proves the webhook came from you. Rotate it in TensorTrader if it ever leaks.

Frequently asked questions

What is the difference between a backtest and a forward test?: A backtest replays history; a forward test runs live, on paper or testnet, on data that did not exist when the strategy was tuned. Forward results are the ones to trust.
Which margin mode should a beginner use?: Isolated margin limits a bad trade to its own collateral. TensorTrader trades some venues in cross margin by design, so size positions small and keep leverage low while you learn.

Keep reading

Not financial advice. Performance figures are TensorTrader testnet or backtest results with the method stated; past results do not predict future returns.

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