Trading glossary: chart, indicator and backtesting terms explained
A trading glossary of chart, indicator, backtesting, alert, Indian F&O and crypto terms in plain words, linked to the SuperCharting tools that use them.
This trading glossary explains the words you meet on a charting platform, from candles and indicators to backtest reports, option chains and crypto perpetuals. Each entry gives a short, plain definition, and where SuperCharting has a matching tool, a link to the Learn page that shows how to use it. It is educational reference material, not trading advice.
Charts and candles
Candlestick — A bar that shows the open, high, low and close (OHLC) of one period. The thick body runs from open to close and the thin wicks reach the high and low; a rising candle is usually green and a falling one red. See chart types.
Timeframe (interval) — How much time each bar covers, such as 5 minutes, 1 hour or 1 day. SuperCharting also accepts custom timeframes such as 45m, 3h or 2D.
Hollow candles — A candle style where a close above the open is drawn hollow and a close below it filled, while the colour shows whether the close was above or below the previous close. It packs two comparisons into one bar.
Heikin Ashi — Candles built from averaged prices instead of raw OHLC, which smooths noise and makes trends easier to see. Because the values are averages, a Heikin Ashi candle's open and close are not real traded prices.
Renko — A chart made of equal-sized bricks that are added only when price moves by the box size, ignoring time. Small moves inside one box draw nothing. See Renko, Kagi, Line break and Point and figure.
Point and figure — A non-time chart of X columns for rising prices and O columns for falling prices. A new column starts only when price reverses by the reversal amount, usually three boxes.
Kagi and Line break — Kagi is a line that changes direction only when price reverses by a set amount. Line break draws blocks where a new block in the opposite direction appears only when the close breaks the extreme of the last few blocks, usually three.
Volume — The number of shares, contracts or lots traded during a bar. Rising volume on a move suggests strong participation; low volume suggests a thin market.
Footprint chart — A candle split into price rows showing how much volume traded at each price, often separated into buying and selling. See volume candles and footprint.
Tick and second charts — A tick chart draws a new bar after a fixed number of price updates, whatever the time; a second chart draws one every few seconds. SuperCharting builds them from live quotes, see second and tick charts.
Indicators
Indicator — A calculation on price or volume drawn on or under the chart, such as an average or an oscillator. The technical indicators library lists those built in.
Moving average (SMA, EMA) — The average closing price over the last N bars. A simple moving average weights every bar equally, while an exponential one gives more weight to recent bars. See moving averages.
RSI (Relative Strength Index) — A momentum oscillator from 0 to 100 that compares the size of recent gains with recent losses, usually over 14 bars. See RSI indicator.
Overbought and oversold — Zones on an oscillator, often above 70 and below 30 on RSI, where a move is considered stretched. A strong trend can stay overbought or oversold for a long time.
MACD — The difference between a 12-period and a 26-period EMA, with a 9-period signal line and a histogram of the gap between them. See MACD indicator.
Divergence — When price makes a new high or low but an oscillator does not, hinting that momentum is fading. It is a warning sign, not a timing signal on its own.
Bollinger Bands — A moving average with bands set a number of standard deviations above and below it, usually 20 bars and 2 deviations. Bands widen when volatility rises. See Bollinger Bands.
ATR (Average True Range) — The average size of each bar's range, counting gaps from the previous close. Traders use it to size stops and judge volatility, not direction.
Supertrend — A trend-following line placed a multiple of ATR away from price, which flips side when price closes through it. See Supertrend indicator.
VWAP — The volume-weighted average price since the session began: the average price paid, weighted by how much traded at each price. See VWAP indicator.
Volume profile — A sideways histogram of how much volume traded at each price. The busiest price is the point of control (POC) and the band holding about 70% of volume is the value area. See volume profile.
Drawing and analysis
Support and resistance — Price areas where falling prices have tended to stop (support) or rising prices have tended to stall (resistance). They are zones rather than exact lines.
Trend line — A line joining two or more swing lows in an uptrend, or swing highs in a downtrend. See drawing tools.
Fibonacci retracement — Horizontal levels at 23.6%, 38.2%, 50%, 61.8% and 78.6% of a move, used to guess where a pullback might pause. See Fibonacci tools.
Chart pattern — A recurring shape formed by swings, such as head and shoulders, double top, triangle or flag. SuperCharting can mark some of these, see auto chart patterns.
Candlestick pattern — One to a few candles with a known shape, such as a hammer, doji or engulfing bar. See candlestick patterns.
Breakout — When price closes beyond a level or pattern boundary it had been held by. A breakout that quickly reverses is called a false breakout.
Risk-reward ratio — The distance to your target divided by the distance to your stop. A trade risking 50 points to make 100 has a 1:2 ratio. SuperCharting's long and short position tools mark a target and stop on the chart, with the stop fixed at a 2:1 reward-to-risk in this version.
Bar replay — Replaying past bars one at a time to practise reading the chart without seeing what comes next. See bar replay.
Multi-timeframe analysis — Reading a higher timeframe for direction and a lower one for timing, for example the daily trend and a 15-minute entry. Multi-chart layouts let you see both at once.
Scripts and backtesting
Pine-compatible script — A script written in the style of Pine Script, TradingView's language, which SuperCharting can run as an indicator or strategy. See Pine Script editor.
Indicator versus strategy — An indicator only draws values; a strategy also places simulated orders so it can be backtested. See write your first strategy.
Backtest — Running a strategy over past bars to see how it would have traded. See the backtesting guide.
Equity curve — A line showing account value over the backtest, trade by trade. A smooth rising curve is easier to live with than a jagged one with the same end result.
Profit factor — Gross profit divided by gross loss. Above 1 means winners earned more than losers lost; 1.5 means ₹1.50 won for every ₹1 lost. The strategy tester shows it at the top of the report.
Max drawdown — The largest fall in equity from a peak to a later low before a new peak, in money or percent. It shows the worst losing stretch the test went through.
Win rate (percent profitable) — Winning trades divided by all trades. A low win rate can still be profitable if winners are much larger than losers.
Sharpe ratio — Average return above a risk-free rate divided by the standard deviation of returns. Higher means more return per unit of overall volatility.
Sortino ratio — Like Sharpe, but it divides by the volatility of losing returns only, so upside swings are not counted as risk.
CAGR — Compound annual growth rate: the steady yearly return that would turn the starting capital into the ending capital over the test period.
Commission and slippage — Commission is the broker's fee per trade; slippage is the gap between the price you expected and the price you got. Leaving both at zero makes a backtest look better than reality.
Pyramiding — Adding more entries in the same direction while a position is already open. A strategy setting limits how many may stack.
Optimisation — Testing many input combinations to find the settings that scored best. See strategy optimiser.
Overfitting (curve fitting) — Tuning a strategy so closely to past data that it fits noise rather than a real pattern, so it tends to fail on new data.
In-sample and out-of-sample — In-sample data is used to build and tune a strategy; out-of-sample data is kept aside to test it afterwards. Good results on both are more convincing than on one.
Repainting — When an indicator's past values change after the fact, usually because it used information from bars that had not closed yet. A repainting signal looks better on history than it was live.
Paper trading — Placing practice orders on live prices with no real money. See paper trading.
Past results in any backtest do not guarantee future results.
Alerts and data
Price alert — A notification when price meets a condition you set, such as crossing a level. See price alerts.
Crossing — An alert condition met when price passes through a value. Crossing up means from below to at or above; crossing down the reverse.
Trigger (once, once per bar, once per bar close) — How often an alert may fire. For script conditions, once per bar close waits for the bar to finish, which avoids signals that vanish before the close.
Multi-condition alert — An alert that fires only when several conditions are true together, or when any one of them is. See multi-condition alerts.
Webhook — A message sent automatically to a web address you choose when an alert fires, so another tool can react. See webhook alerts.
Watchlist — Your saved list of symbols with their latest prices. See watchlists and watchlist alerts.
Screener — A tool that filters a whole market by rules, such as market cap and P/E. See stock screener.
Live versus delayed data — Live data updates as trades happen; delayed data lags by some minutes. On SuperCharting, prices are live when the market is open and the feed allows.
Data export — Downloading bars and indicator values as a CSV file for a spreadsheet. See chart data export.
Indian markets and derivatives
NSE, BSE and MCX — India's two main stock exchanges and its main commodity exchange. See NSE charts, NIFTY and BANKNIFTY.
NIFTY 50 — NSE's benchmark index of 50 large companies, charted as NSE:NIFTY.
BANKNIFTY — NSE's index of the most liquid banking stocks, known for large intraday swings.
F&O — Futures and options: contracts whose value comes from an underlying such as NIFTY or a stock.
Futures contract — An agreement to buy or sell the underlying at a fixed price on a set date. Indian futures are cash-settled or physically settled depending on the contract.
Call and put options — A call gives the buyer the right, not the duty, to buy at the strike price; a put gives the right to sell. The seller takes the opposite obligation.
Strike price — The fixed price in an option contract. An option is at the money (ATM) when the strike is near spot, in the money (ITM) when it has intrinsic value and out of the money (OTM) when it has none.
Expiry — The date a contract ends and is settled. The exchange sets and occasionally changes the expiry days. The options chain lists every expiry from today onwards.
Lot size — The fixed number of units in one F&O contract, set and revised by the exchange. Profit or loss per point is the lot size times the number of lots.
Open interest (OI) — The number of contracts still open, not yet closed or settled. Rising OI with rising price suggests new positions are being built. SuperCharting's options chain does not show OI.
PCR (put-call ratio) — Put open interest divided by call open interest (sometimes volumes are used instead). Traders read very high or very low values as signs of crowded sentiment.
Implied volatility (IV) — The volatility the option premium implies for the future. Higher IV means more expensive options.
Option Greeks — Measures of how a premium reacts to changes: delta to price, theta to time, vega to volatility and gamma to the change in delta.
Continuous futures (NIFTY1!) — A symbol that always points at the nearest unexpired contract, so NSE:NIFTY1! rolls to the next month by itself; NIFTY2! is the one after. On SuperCharting it shows the current contract's bars rather than a back-adjusted history.
Crypto
Spot — Buying or selling the coin itself for immediate settlement, such as owning actual bitcoin. SuperCharting charts spot pairs from Binance, Bybit, OKX, Coinbase and KuCoin, such as BINANCE:BTCUSDT; see crypto charting.
Perpetual futures (perps) — Crypto futures with no expiry date. A funding mechanism keeps their price close to spot. USDT perpetuals from Binance, Bybit and OKX carry a .P suffix on SuperCharting, such as BINANCE:BTCUSDT.P.
Funding rate — A periodic payment between long and short holders of a perpetual. When it is positive, longs pay shorts, which tends to pull the perpetual's price back towards spot.
Liquidation — The forced closing of a leveraged position when losses use up the margin behind it.
Stablecoin pair — A market priced in a coin pegged to a currency, such as BTC against USDT, rather than against US dollars. On SuperCharting the exchange pairs are quoted in the exchange's own currency, such as BINANCE:BTCUSDT or COINBASE:BTCUSD.
Frequently asked questions
What is the difference between profit factor and win rate?
Win rate counts how often a strategy wins; profit factor compares how much it won with how much it lost. A strategy can win 35% of trades and still have a profit factor above 1 if its winners are large.
Is max drawdown the same as the biggest losing trade?
No. Max drawdown is the deepest fall in equity from a peak, which may be made of many losing trades in a row. It is usually larger than any single loss.
What does the "1!" in NIFTY1! mean?
It means the front-month continuous future: whichever NIFTY futures contract expires next. NIFTY2! is the following month.
Does SuperCharting show open interest, PCR or funding rates?
Not in the options chain, which is a contract picker for expiries and strikes. Crypto funding rates are not shown either; this glossary defines them so you can read other sources.