This glossary provides clear, educational definitions of commonly used terms in digital asset trading, automation, derivatives, and risk management. Each term includes a concise explanation, with the option to explore a more detailed breakdown and practical examples.
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- AI-Powered Trading Bot
- Algorithmic Trading
- API Integration
- Arbitrage
- Automated Crypto Trading
- Backtesting
- Buy/Sell Signal
- Credits
- Cross-Margin
- Demo Trading
- Derivatives
- Dollar-Cost Averaging (DCA)
- Eligible Contract Participant (ECP)
- Elite Trader
- Futures Trading
- Grid Trading
- Isolated Margin
- KYC/AML Verification
- Leverage
- Liquidation
- Liquidity Risk
- Loss of Capital
- Margin Trading
- Market Risk
- Maximum Drawdown
- Nexus Dashboard
- No Guaranteed Returns
- Non-Custodial Architecture
- Operational Risk
- PnL Calculator
- Position Sizing
- Private Placements
- Profit and Loss (PnL)
- Protocol Risk
- Qualified or Accredited Investors
- Real-Time Performance Tracking
- Return on Investment (ROI)
- Scalping Strategy
- Stop-Loss Order
- Strategist
- Swing Trading Strategy
- Take-Profit Order
- Tokenized Real-World Assets (RWAs)
- Trading Bot
- Trading Pair
- Trailing Stop-Loss
- Verified Strategy
AI-Powered Trading Bot
An automated trading system that may use machine learning or data-driven models to adjust strategy parameters as new market data becomes available. AI-powered bots can support decision-making and execution, but outcomes still depend on market conditions and risk settings.
Algorithmic Trading
The use of computer programs and predefined rules to execute trades based on mathematical models, technical indicators, timing, or other market conditions. Algorithmic trading can range from simple rule-based logic to more advanced statistical or machine learning approaches.
API Integration
The process of securely connecting two systems so they can exchange data and perform actions automatically. In crypto trading, API integration typically allows a platform to read account data and execute trades on an exchange based on user-configured permissions.
Arbitrage
A strategy that exploits price differences of the same asset across multiple exchanges to generate profit. It typically relies on rapid execution to capture small discrepancies before they close.
Automated Crypto Trading
The use of algorithm-driven systems to execute trades 24/7 based on predefined rules and market conditions. This removes the need for constant manual monitoring and execution.
Backtesting
The process of simulating a trading strategy using historical market data to evaluate potential performance before live deployment. It helps traders assess how a strategy may have behaved under past market conditions.
Buy/Sell Signal
A buy or sell signal is an indication generated by a strategy or algorithm suggesting when to enter or exit a position. Signals are based on predefined rules or indicators and remain subject to market conditions and execution risk.
Credits
Credits are AstraBit’s internal balance unit used to pay for products and services within the AstraBit ecosystem. Credits maintain a 1:1 USD representation within the platform. Credits are platform-specific and have no external cash value.
Cross-Margin
A margin mode where all available account funds act as shared collateral across open positions. This can reduce the risk of liquidation on a single position but exposes the entire balance to risk.
Demo Trading
A simulated trading environment used to test strategies without risking real funds. It allows users to practice execution and evaluate systems in real-time market conditions.
Derivatives
Financial contracts whose value is derived from an underlying asset, often used in futures or leveraged trading. They are commonly used for speculation or risk management.
Dollar-Cost Averaging (DCA)
A long-term investment strategy that involves purchasing a fixed amount of an asset at regular intervals to reduce the impact of market volatility. This approach spreads entry prices over time.
Eligible Contract Participant (ECP)
A regulatory designation required for certain U.S. clients to access specific leveraged trading features. Qualification is typically based on net worth or financial sophistication thresholds.
Elite Trader
An Elite Trader is a verified trader eligible to participate in AstraBit’s copy trading feature. Users may choose to mirror trades under defined platform rules and user-selected risk settings.
Futures Trading
A derivatives trading method where contracts are used to speculate on the future price of an asset. These contracts may involve leverage and predefined expiration terms.
Grid Trading
A strategy that places buy and sell orders at predefined price intervals to capitalize on market volatility in ranging markets. It is typically designed for sideways price movement.
Isolated Margin
A margin mode where only a specific amount of capital is allocated to a single position, limiting potential loss to that allocation. This isolates risk from the rest of the account balance.
KYC/AML Verification
KYC (Know Your Customer) and AML (Anti-Money Laundering) verification are processes used to confirm identity and support regulatory compliance requirements. Requirements may vary by jurisdiction, product, and exchange.
Leverage
The use of borrowed funds to increase trading exposure beyond available capital, amplifying both gains and losses. Leverage increases risk and may lead to rapid liquidation.
Liquidation
The forced closing of a position when margin requirements are no longer met. This typically occurs when losses exceed available collateral.
Liquidity Risk
Liquidity risk is the risk that an asset, strategy, or position cannot be entered or exited quickly without significantly impacting price. Some assets may have limited liquidity or face withdrawal restrictions depending on venue and market conditions.
Loss of Capital
Loss of capital refers to the possibility of losing some or all of the assets allocated to trading, staking, farming, or other on-chain activity. Outcomes depend on market conditions, protocol rules, and execution factors.
Margin Trading
Trading with borrowed funds provided by an exchange to increase position size. Margin trading introduces additional risk compared to spot trading.
Market Risk
Market risk is the risk that digital asset prices are volatile and may fluctuate significantly. Price moves can occur quickly and may result in losses, especially when leverage is used.
Maximum Drawdown
The largest percentage decline from peak to trough in account value during a specific period. It is commonly used to measure downside risk.
Nexus Dashboard
The Nexus Dashboard is a centralized location within AstraBit for managing trading activity. It may include configurable widgets to review trade history, bot performance and PnL, equity allocation, API management, and strategy comparisons in one place.
No Guaranteed Returns
Rewards from staking, farming, or other on-chain activities are not guaranteed. Outcomes depend on protocol rules, market conditions, and network factors, and results may vary over time.
Non-Custodial Architecture
Non-custodial architecture refers to systems where users retain control of their funds and private keys rather than depositing assets with a centralized custodian. User control may vary by product, exchange, and integration method.
Operational Risk
Operational risk includes issues such as network congestion, outages, downtime, governance changes, or technical failures that may impact execution, access, or performance.
PnL Calculator
A PnL Calculator is a tool used to review different time periods, asset allocations, or leverage settings to generate estimated profit and loss calculations. Some calculations may include historical or backtested data. Estimates do not guarantee future results.
Position Sizing
The method of determining how much capital to allocate to a single trade based on overall portfolio risk tolerance. Proper position sizing helps manage long-term risk exposure.
Private Placements
Private placements are investment offerings that may be available to qualified or accredited investors under applicable securities exemptions. Eligibility and availability depend on the specific offering terms and regulatory requirements.
Profit and Loss (PnL)
A calculation that reflects gains or losses from executed trades, including fees and position outcomes. PnL may be measured on an individual trade or portfolio level.
Protocol Risk
Protocol risk refers to the possibility that smart contracts or blockchain protocols contain vulnerabilities, behave unexpectedly, or experience failures. This may impact on-chain activity, asset access, or outcomes.
Qualified or Accredited Investors
Qualified or accredited investors are individuals or entities that meet regulatory financial or sophistication thresholds required to participate in certain private or exempt offerings. Definitions may vary by jurisdiction and offering type.
Real-Time Performance Tracking
Live monitoring of metrics such as profit and loss (PnL), drawdown, win rate, and return on investment (ROI). This helps users observe strategy behavior as market conditions change.
Return on Investment (ROI)
A performance metric that measures profitability relative to the capital deployed. ROI is typically expressed as a percentage.
Scalping Strategy
A short-term, high-frequency trading strategy focused on capturing small price movements through multiple rapid trades. It often relies on tight spreads and quick execution.
Stop-Loss Order
An automated instruction that closes a position when price reaches a predefined loss threshold to limit downside risk. It is commonly used as a risk management tool.
Strategist
A Strategist is an AstraBit-vetted and verified third-party trader who completes a structured eligibility process before strategies can be listed. Strategists are independent third parties. Past performance does not guarantee future results.
Swing Trading Strategy
A medium-term trading approach designed to capture price movements over days or weeks using technical indicators and trend analysis. It aims to capitalize on broader price swings.
Take-Profit Order
An automated instruction that closes a position when a predefined profit target is reached. It helps lock in gains without requiring constant monitoring.
Tokenized Real-World Assets (RWAs)
Tokenized real-world assets (RWAs) are blockchain-based representations of traditional assets such as real estate, commodities, or other financial instruments. Availability and eligibility depend on the product structure and applicable regulatory requirements.
Trading Bot
An automated software program that executes cryptocurrency trades based on predefined strategies, parameters, and risk settings without manual intervention. Trading bots can operate continuously across supported exchanges.
Trading Pair
The combination of two assets being traded against each other (e.g., BTC/USD). The first asset is the base currency, and the second is the quote currency.
Trailing Stop-Loss
A dynamic stop-loss that adjusts upward as price moves in favor of the position, helping secure gains while limiting downside risk. It follows price movement at a defined distance.
Verified Strategy
A Verified Strategy is a strategy from a Strategist that completes an extended review process before being made available. Verification does not guarantee future results, and outcomes depend on market conditions and risk settings.