Clear explanations of the market, macro, and trading terms used across MyTrade Academy.
Maximum Adverse Excursion (MAE) measures the largest unrealized loss a position experienced between entry and exit, used in journals to audit stop-loss efficiency.
Read definitionModel risk is the possibility that a model's output is wrong, misleading, or unfit for the decision it is feeding. In trading it covers both statistical models and AI assistants.
Read definitionMonetary-policy transmission is the chain through which central-bank decisions affect financial conditions, spending, investment, employment, and inflation over time.
Read definitionNegative correlation describes two assets that tend to move in opposite directions, providing the mathematical basis for diversification and downside protection.
Read definitionOHLC is the four-price summary of a fixed time window: the first and last traded prices, plus the highest and lowest. It records boundaries, not the path in between.
Read definitionOHLCV aggregates market activity across fixed intervals into Open, High, Low, Close, and Volume, enabling compact storage and rapid historical analysis.
Read definitionOpen interest is the number of outstanding futures or options contracts that have not been closed, expired, or exercised. It measures contract stock, not trade direction by itself.
Read definitionOut-of-sample testing evaluates a finished trading strategy on fresh historical data that was never used during rule design, providing an honest reality check.
Read definitionOverfitting is tuning a strategy to capture historical noise as if it were a real edge. The result looks great on the tuned data and fails elsewhere.
Read definitionPaper trading practices order execution, sizing calculations, and rule discipline in live market conditions using simulated funds rather than real capital.
Read definitionPattern recognition in trading is matching chart shapes to predefined geometric rules, either by eye or by software. A match is a candidate, not a validated setup.
Read definitionPMI surveys business activity and uses 50 as the key expansion-contraction threshold. Learn how investors interpret manufacturing and services PMI releases.
Read definitionPosition size is the quantity of an asset you hold or control. It converts a risk budget and an invalidation distance into a concrete number of shares, contracts, or units.
Read definitionPosition sizing determines how much exposure a trade should take. Account size, maximum acceptable loss, and stop distance matter more than how confident you feel about the idea.
Read definitionPrice discovery is the process through which new information changes bids, asks, and transaction prices. Markets react to information relative to expectations, not to headlines in isolation.
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