SIGMENTUM · GLOSSARY

Every term in the signal feed, explained.

30 definitions — from EMA crossovers and RSI to half-Kelly sizing and breakeven stops. Written for traders, not textbooks.

Exponential moving averages over 9 and 21 periods. When EMA-9 crosses above EMA-21, momentum is turning constructive. The gap between them measures trend strength.

Relative Strength Index, 14-period. Above 70 = overbought, below 30 = oversold. Sigmentum treats 55–70 as the momentum sweet spot for new Long entries.

Confidence score

An integer 0–100 emitted by the AI, reflecting convergence of trend, momentum, volatility, and event-risk inputs. Above 70 = tradable; above 80 = high conviction. Not a probability of success.

The directional stance the AI recommends: Long, Short, or Neutral. Neutral is a valid output when signal quality is insufficient. Do not trade a Neutral signal.

R:R (Risk:Reward)

Ratio of potential profit to potential loss, measured to TP2. Sigmentum requires a minimum of 1.8 across all active signals. Below 1.5, the system suppresses the signal regardless of confidence.

Volatility regime

Rolling standard deviation of returns, bucketed as compressing, expanding, or stable. The regime modulates confidence weighting — breakout signals score higher in compressing environments.

Average True Range — the average candle size over N periods. Used for stop placement (stops go 1× ATR beyond the zone boundary) and breakout filters (volume must exceed 1.2× average on the breakout candle).

Peak-to-trough equity decline. A strategy with 68% win rate can still have 20%+ drawdowns depending on position sizing and loss clustering. Managing drawdown is primarily a sizing problem, not a win rate problem.

First and second take-profit targets. TP1 is where you take partial profit and move your stop to breakeven. TP2 is where you close the remaining position. Never skip TP1 in anticipation of TP2.

The price level at which the trade thesis is structurally invalid. Set at the zone boundary, not at a round number. Moving a stop loss against your position is the single most correlated behavior with long-run unprofitability.

8am–10am GMT. The highest-liquidity window of the global trading day for FX and metals. Breakouts during this window with volume confirmation carry significantly higher follow-through rates than the same pattern at other times.

Binary macro events — CPI, NFP, FOMC — that can move price beyond technical structure. Sigmentum flags these in the risk level field and caps confidence at 75 when one falls within 4 hours of signal generation.

When price and RSI move in opposite directions at a swing point. Classic divergence signals momentum deterioration; hidden divergence signals trend continuation. Most reliable when combined with structural levels and extreme RSI readings.

Stop loss moved to the entry price after TP1 is reached. Allows the remaining position to run to TP2 with zero downside risk. Should be triggered at TP1, not before — moving to breakeven too early is a primary cause of premature stop-outs.

Half-Kelly sizing

Position sizing at 50% of the Kelly-optimal fraction. Dramatically reduces variance while sacrificing only ~25% of theoretical growth rate. The practical target is 1.5–2% of capital at risk per signal, consistent with Sigmentum's default risk model.

Moving Average Convergence Divergence — a momentum indicator that measures the relationship between two EMAs (typically 12 and 26 periods). The signal line (9-period EMA of MACD) generates crossover buy and sell signals.

Fibonacci retracement

Horizontal price levels derived from the Fibonacci sequence (23.6%, 38.2%, 50%, 61.8%, 78.6%) that act as potential support and resistance zones during a pullback within a trend.

Support & resistance

Price zones where significant buying (support) or selling (resistance) previously occurred, causing price to pause or reverse. They are zones with width — typically 0.3–0.5% of price — not precise lines.

Simulated trading using virtual funds, with no real money at risk. Used to test strategies and build confidence before committing real capital. Sigmentum provides every new account with a $10,000 paper wallet.

Testing a trading strategy against historical price data to estimate how it would have performed. Sigmentum's HindsightSandbox runs backtests across 2 years of real data in seconds, free for all accounts.

Execution agent

An automated system that monitors live signals and executes trades on your behalf — either sending alerts (Signal tier) or placing orders directly via broker API (Momentum tier). Sigmentum's agent runs 24/7 across all covered assets.

A trading style that holds positions for 2–10 days, capturing directional moves across the overnight session. Lower trade frequency than day trading, targeting larger per-trade R:R.

A very short-duration trading style targeting small price moves — typically minutes to an hour — with high trade frequency and tight stop losses. Highly sensitive to execution quality and spread.

Trend following

A strategy that enters in the direction of the prevailing trend after confirmation, targeting continuation rather than predicting reversals. The majority of Sigmentum Long and Short signals are trend-following in nature.

A strategy that bets on price returning to its average after an extended move in one direction. Works best in range-bound markets. Conflicts with trend-following signals and requires different position sizing.

Position sizing

The process of determining how much capital to allocate to a single trade. Correct sizing is the primary determinant of long-run account survival — more important than entry timing or indicator choice.

Automatically replicating the trades of another account or strategy. Sigmentum's Momentum tier includes access to the Copy-Agent Marketplace — a leaderboard of automated strategies ranked by verified P&L.

Spread (bid-ask)

The difference between the price a market maker will buy (bid) and the price they will sell (ask). The spread is the immediate cost of entering any trade. Tighter spreads = lower friction per trade.

The smallest standard price increment in a forex pair. For most pairs (EUR/USD, GBP/USD), 1 pip = 0.0001. For JPY pairs (USD/JPY), 1 pip = 0.01. The value per pip depends on position size.

The ability to execute a trade at the displayed price without significantly moving the market. High liquidity = tight spreads, fast fills, low slippage. Low liquidity = wide spreads, delayed fills, price impact from your own order.