Glossary

Common terminology used within the LiquidONE platform and algorithmic trading.

Opening Range (OR): The high and low price established during the first N minutes (typically 15) of a trading session. This range serves as support and resistance.
Opening Range Breakout (ORB): A strategy that enters a trade when the price breaks out (closes outside) of the Opening Range.
R-Multiple: A standardized measure of risk and reward. 1R represents the initial risk taken on a trade. A trade that makes twice the initial risk is a +2R trade.
MFE (Maximum Favorable Excursion): The peak profit a trade reached before it was closed. Used to determine if take-profit targets are too conservative or too aggressive.
MAE (Maximum Adverse Excursion): The maximum loss a trade experienced before it was closed. Used to determine if stop-losses are placed too tightly.
Drawdown: The peak-to-trough decline during a specific record period of an investment, usually quoted as the percentage between the peak and the subsequent trough.
Expectancy: The average amount you can expect to win (or lose) per trade, combining win rate and average win/loss sizes. Positive expectancy means a strategy is profitable over time.
Profit Factor: The gross profit divided by the gross loss over a specific trading period. A profit factor above 1.0 indicates a profitable system.
Slippage: The difference between the expected price of a trade and the price at which the trade is actually executed. LiquidONE paper trading applies a simulated 0.02% slippage penalty.