Botty · Knowledge

Traders Strategies 21 Terms 57 Research 16 Memory 16 Journal 611

Indicators (13)

Average Directional Index

Measures the *strength* of a trend on a 0–100 scale, regardless of direction. Classic thresholds: < 20 range, > 25 trend.

Average True Range

Measures the average true range of the last N periods — a pure volatility indicator with no directional information.

Bollinger Bands

Bollinger Bands (volatility envelope)

A moving average (SMA-20) ± k standard deviations. The bands breathe with volatility. Touches of the outer bands count as extremes — the basis for mean-reversion or breakout logic.

Chaikin Money Flow (Pifagor „Money Waterfall“)

Measures capital in-/outflow via the position of the close within the bar range, weighted by volume. Positive = accumulation, negative = distribution.

Cumulative Volume Delta / Order Flow Imbalance

Aggressive buy minus sell volume (taker-driven). CVD = the cumulative sum, OFI = the normalized imbalance over a window. Shows which side is actively driving price.

Directional Movement Index (+DI / −DI)

The two direction lines from Wilder's directional movement system: +DI measures the strength of upward movement, −DI that of downward movement. Whoever is on top has control. Gives the directionless ADX its missing direction.

Donchian Channel

Donchian Channel (N-Bar Hoch/Tief)

The highest high and lowest low of the last N bars. A close above the upper channel = breakout (long), below the lower = breakout (short). Core of the Turtle trading system.

Exponential Moving Average

Moving average that weights recent prices more heavily than older ones. Reacts faster to price changes than the simple SMA.

Hurst exponent (variance-ratio estimation)

Measures whether a time series trends (persistent), reverts (mean-reverting) or is a random walk. H > 0.55 = trend, H ≈ 0.5 = random, H < 0.45 = mean reversion. A directionless alternative/complement to ADX.

Moving Average Convergence Divergence

Difference of two EMAs (12/26) plus a signal EMA (9). Measures trend momentum and delivers crossover signals.

Money Flow Index

Like RSI, but volume-weighted: a 0–100 oscillator that measures buying pressure (money in) against selling pressure (money out). Often called the „volume-weighted RSI“.

On-Balance Volume

Cumulative, signed volume: volume is added on green days, subtracted on red ones. If OBV rises with price, the move is „organic“ (volume-backed).

Relative Strength Index

Momentum oscillator (0–100) measuring the strength and speed of price moves. Overbought zone > 70, oversold zone < 30.

Concepts (37)

Alpha (marktunabhaengige Ueberrendite)

The part of a return a strategy does NOT owe to its market exposure — the real, market-independent edge. The intercept in the regression of strategy vs. market returns.

Hyperliquid API Wallet

A sub-wallet delegated by the main wallet with restricted rights — may trade, but cannot withdraw funds. Botty's security model.

Bailout Exit — First Profitable Open (Larry Williams)

Exit at the first profitable candle open after a minimum holding time. Larry Williams' technique to lock in small wins instead of waiting for reversals.

Bayesianische Optimierung

Bayesian Optimization (BO)

Smart parameter search: a probabilistic model (usually a Gaussian process) of the objective proposes the next most promising test point, balancing exploration vs. exploitation. Finds good optima in 10-50 instead of thousands of backtests - but tends toward sharper overfitting and must be embedded in walk-forward.

Beta (Marktsensitivitaet)

How strongly a strategy swings with the market — the slope of the regression of strategy vs. market returns. Beta 1 = 1:1 with the market, beta 0 = market-neutral, negative beta = crisis hedge.

Bayesian Online Change-Point Detection

Bayesian method that continuously estimates the probability that the statistics of the time series just broke (a fresh structural break). Promoted and live in Botty — predicts vol expansion, not direction.

Compound Annual Growth Rate (annualisierte Rendite)

The geometrically annualized return: the constant yearly growth rate that would have led from starting to ending capital. Compound-correct, unlike the arithmetic mean.

Annualized return divided by the maximum drawdown. Measures how much return was earned per unit of pain. Higher is better.

Post-Trade Cooldown (Candle-basiert)

After a trade, no new signals are allowed for N candles. Prevents over-trading and immediate re-entries after a stop-out.

Cumulative-sum event filter (López de Prado / Page)

Accumulates returns in two buckets (up/down pressure) and marks an event as soon as a threshold is breached — then resets. A vol-adaptive event sampler ('don't sample every candle'), not a buy/sell signal.

Oszillator-Divergenz

Price and oscillator move differently. A warning sign of trend exhaustion — often a precursor to a reversal.

Equity Drawdown (DD)

Percentage decline of the account from a peak to a later trough. Max drawdown is the worst capital valley in a period.

Deflated Sharpe Ratio

A Sharpe ratio corrected for the number of strategies tried, the sample length and the non-normality of returns. Answers: is this Sharpe real, or just the winner of many attempts?

Elliott-Wellen-Theorie

Market trends run in 5 impulse + 3 corrective waves. The third wave (W3) is usually the longest and strongest — Botty's Elliott entry looks for exactly its beginning.

Fibonacci Retracement

Fibonacci-Retracement-Levels

Horizontal levels (23.6 / 38.2 / 50 / 61.8 / 78.6%) of a preceding impulse move where pullbacks often turn. Basis of Botty's FibDiv entry (Pifagor).

Prozentualer Stop-Loss

Stop-loss at a fixed percentage distance from entry. Simple, parameterizable and well suited for backtesting comparisons.

Perpetual Funding Rate

Periodic payment between the long and short side of a perpetual contract that ties the perp price to the spot price.

Holy Grail Setup

Holy Grail (Linda Bradford Raschke)

Pullback setup in a strong trend: ADX > 30 + EMA-20 as the pullback target. Entry on the first high/low after the retracement.

Hebel (Leverage)

Ratio of position size to posted capital. Up to 50x on Hyperliquid perpetuals — amplifies gains *and* losses linearly.

Wann ist ein Backtest live-tauglich? (Bewertungs-Pipeline)

„Promising“ is not a single pretty number but passing five stages in sequence: enough trades → solid individual metrics → high mega-sweep score → positive walk-forward → low PBO → survived Monte-Carlo worst case. Only then is an entry/filter/exit fit for live.

Open Interest (OI)

Total number of all open, not-yet-closed contracts on a market — shows how much capital is actually committed to the market.

Out-of-Sample-Validierung

Out-of-Sample (OOS) Validation

Evaluating a strategy on held-out data that was NOT visible during building and optimization. In-sample performance is systematically too optimistic (overfitting); only OOS estimates whether an edge generalizes. For time series necessarily with time ordering + embargo against label leakage - and without repeated 'peeking'.

Probability of Backtest Overfitting

Sweep-level metric: how likely the best backtest candidate won by luck alone and flops out-of-sample. From all C(S,S/2) in-/out-of-sample splits of a [slices × candidates] matrix (CSCV, Bailey & López de Prado). ≈0 = selection generalizes; ≈0.5 = pure chance; >0.5 = anti-predictive.

Position Sizing

Position sizing

How much capital to risk per trade? Decides long-term survivability more than any entry logic.

Swing High/Low Profit Target

Profit target at the nearest swing high (long) or swing low (short) of the last N bars. A structural exit reference instead of arbitrary R multiples.

Risk/Reward Ratio (R:R)

Ratio of potential loss (1R = stop distance) to potential gain. Together with the win rate it determines profitability.

Trading session filter (UTC time window)

Allow signals only within a specific UTC hour window. Filters out phases of poor liquidity (Asia low) or prevents trading in risky sessions.

Excess return per unit of total risk: (return - risk-free rate) divided by the volatility of returns, annualized. The standard score for risk-adjusted performance.

Execution slippage

Difference between expected and actual execution price. The quiet killer of every high-frequency strategy.

Stop Loss Order

Automatic exit order that closes a position when price moves against the trader. The only reliable risk-management tool.

Swing-basierter Stop-Loss

Stop-loss below the low / above the high of the trigger candle. A structural stop exactly at the point where the setup becomes invalid.

Zeitbasierter Stop-Loss

Exit after N candles if the trade hasn't shown sufficient movement yet. Keeps capital from being trapped in dead positions.

Trailing Stop-Loss

A stop-loss that follows along as price improves but never moves against the trader. Lets profits run while locking them in.

Triple-Barrier-Labeling

Triple-Barrier-Methode (López de Prado)

Labels the outcome of an event by which of three barriers is hit first: above (take profit), below (stop loss), or the time limit. Regime-adaptive, execution-consistent labels for ML research instead of naive 'return after N bars'.

Volume filter (relative average)

Allow a signal only if current volume ≥ X times the rolling average. Filters out signals in phases of poor liquidity.

Variance Risk Premium (implizite vs. realisierte Vola)

Difference between implied vol (from options, e.g. Deribit DVOL) and realized vol. Low/negative VRP = realized vol is already running hot → volatility expansion ahead.

Walk-Forward Analysis (Optimization & Validation)

Robustness test: optimize parameters on a train window (walk-forward optimization, WFO), validate on a following out-of-sample test window, then roll the windows. Filters overfitting.

Patterns (2)

Outside-Inside Breakout

Outside-Inside Day (Raschke 3-Bar Pattern)

3-bar setup by Linda Raschke: outside bar → inside bar → break above/below the inside-bar range. Compressed energy discharges in the trend direction.

Swing Failure Pattern (Hsaka)

Wick through an N-bar swing high/low, but the candle closes back below/above it. Shows a failed breakout attempt — often the start of a countermove.

Abbreviations (5)

Bitcoin — the first and most important cryptocurrency. Botty trades exclusively BTC perpetuals on Hyperliquid.

Hyperliquid Perpetuals Exchange

On-chain perpetuals exchange with its own L1. USDC-settled, up to 50x leverage, its own HIP API. Botty's only live trading venue.

Open, High, Low, Close, Volume

The five numbers that describe a candle: open, high, low, close, volume in the period.

Perp / Perpetual

Perpetual Futures

Derivative without expiry. Long/short positions on a price, leveraged, financed via funding-rate payments between the long and short side.

US-dollar-pegged stablecoin issued by Circle. Settlement currency of all Hyperliquid perpetuals.