Trading terms explained.

Algorithm (Algo)

A set of programmed rules that can execute trades based on predefined conditions. Trader Origin templates analyse market data and only place trades on your connected exchange after you have explicitly enabled live mode for them yourself — you can pause or stop them at any time.

API (Application Programming Interface)

A connection that allows two software systems to communicate. In trading, you connect your exchange API keys to Enigma so it can stream data and execute trades on your behalf.

Backtest

Testing a trading strategy using historical market data to see how it would have performed in the past. Backtesting helps validate strategy logic before risking real capital.

Important: Past performance does not indicate future results.

Bot

Automated software that executes trades based on signals from a strategy or template. Inside Enigma, a template only acts on your exchange once you have deployed it into live mode yourself — you can pause or stop it at any time.

Breakout

When price moves above a resistance level or below a support level with increased momentum. Some templates are designed to identify and trade breakout patterns.

DCA (Dollar Cost Averaging)

A strategy that involves making multiple purchases at different price levels rather than one large purchase. In Trader Origin templates, DCA refers to entering positions in stages — for example, 12-level DCA means up to 12 entry points. This helps average the entry price during periods of volatility.

Example: Instead of buying $1,200 at one price, a 12-level DCA might buy $100 at 12 different prices as the market moves.

Drawdown

The peak-to-trough decline in account value during a specific period. It measures the largest loss from a high point before a new high is reached. Drawdown is a key risk metric.

Example: If your account went from $10,000 to $8,500 before recovering, the drawdown was -15%.

Entry

The point at which a trade is opened (a position is entered). A strategy's entry logic determines when and at what price to buy or sell.

Exchange

A platform where assets are traded (e.g., Binance, Bybit, Hyperliquid). Enigma connects to five exchanges via API to stream live data and execute trades.

Genesis

Enigma's parameter-driven strategy engine. Configure a strategy's parameters — no code required — then backtest, optimise, and optionally enable live mode. A Python editor with CodeMirror syntax-aware editing and AI assistance is available for users who want deeper control.

HIP-3

Hyperliquid's tokenised perpetuals standard, enabling on-chain markets for a wider universe of assets beyond native spot listings — including instruments that reference equity names, indices, commodities, and currency pairs. Enigma supports trading on HIP-3 markets where available through connected Hyperliquid accounts.

Important: HIP-3 instruments that reference traditional assets are perpetual contracts — they do not confer ownership, voting rights, or dividends, and they are not regulated financial instruments. Additional risks include oracle failure and funding-rate volatility.

Leverage

Borrowing funds to increase position size beyond your actual capital. 2x leverage means you control $2,000 with $1,000 of your own money. Higher leverage amplifies both gains AND losses.

Trader Origin note: Performance data is shown at 1x (no leverage) to represent base figures. Using leverage is optional and significantly increases risk.

Liquidation

When a leveraged position is forcibly closed by the exchange because losses have consumed the margin (collateral). This typically results in losing most or all of the position's value.

Long Position

A trade that gains value when the price rises. Going long means buying an asset with the expectation that its price will increase.

Margin

The collateral required to open and maintain a leveraged position. Isolated margin limits risk to that specific position; cross margin uses your entire account balance as collateral.

Mean Reversion

A trading strategy based on the theory that prices tend to return to their average over time. Mean reversion strategies look to buy when prices are below average and sell when above.

Momentum

The speed and strength of price movement in a particular direction. Momentum strategies aim to ride strong trends rather than predict reversals.

PnL (Gain and Loss)

The net gain or loss from trading over a period. Usually expressed as a percentage of the initial capital. Performance tables show monthly and cumulative figures.

Position

An open trade. When you buy an asset, you have an open position until you sell it (close the position).

Position Sizing

Determining how much capital to allocate to a single trade. Proper position sizing is crucial for risk management.

Resistance

A price level where selling pressure tends to prevent further upward movement. When price breaks through resistance, it may signal a bullish breakout.

Risk Management

Strategies and techniques to limit potential losses. This includes position sizing, stop losses, and diversification. Never risk more than you can afford to lose.

Short Position

A trade that gains value when the price falls. Going short means selling an asset you do not own, with the intention of buying it back at a lower price.

Signal

An alert generated by a strategy or template indicating a potential trading opportunity. Inside Enigma, signals are acted on by the deployed template against the user's connected exchange accounts.

Slippage

The difference between the expected price of a trade and the actual executed price. Slippage typically occurs during high volatility or low liquidity.

Stop Loss

An order to automatically close a position at a specified price to limit losses. For example, setting a stop loss 5% below your entry price.

Support

A price level where buying pressure tends to prevent further downward movement. When price breaks through support, it may signal a bearish move.

Take Profit

An order to automatically close a position at a specified target. This locks in gains when the price reaches your target level.

Template

A pre-built baseline strategy that runs inside Enigma. Templates ship with full source visibility and only run on your exchange once you have explicitly enabled live mode yourself. The current baseline templates include VELOX, VELOX MAX, VELOX HYPER, HYPERSPEED, VORTEX, APEX, AEGIS, and HELIOS.

Timeframe

The period each candlestick represents on a chart (e.g., 1-minute, 1-hour, 1-day). Different templates operate on different timeframes based on their strategy logic.

TradingView

A popular charting platform that supports custom indicators and strategies written in Pine Script. Enigma provides its own integrated charting and strategy workspace.

Webhook

A method of sending automated alerts from one system to another. In trading, an external system sends webhook alerts to trigger trade execution — Enigma supports inbound webhooks for strategy automation.

Whipsaw

Rapid price movements in both directions that trigger stop losses or cause losses for trend-following strategies. Choppy, sideways markets often cause whipsaw conditions.

YTD (Year-to-Date)

Performance measured from January 1st of the current year to the present date. YTD figures show how a template has fared since the start of the year.