Glossary
Trading signals glossary: the metrics that matter
Short, operational definitions of the terms used in our reviews.
- Drawdown
- The maximum loss from an equity peak to the following trough. It measures how much capital is needed to endure the system.
- Profit factor
- Ratio between gross profit and gross loss. Below 1 the system loses; above 2 it is considered solid.
- Expectancy
- Average expected gain per trade, combining win rate and risk/reward ratio.
- Slippage
- The gap between signal price and real execution price. On Gold and news it is the most underestimated cost.
- Win rate
- Percentage of trades closed in profit. Always read alongside profit factor and drawdown.
- Myfxbook
- Independent verification service that links a live account and publishes equity, drawdown and trade history.
- XAUUSD
- Gold/dollar pair, the instrument most followed by signal providers for volatility and liquidity.
- Copy trading
- Automatic replication of a trader's operations on your own account, with risk proportional to capital.