Every term used across Soomario products, explained in plain English.
- CAGR (Compound Annual Growth Rate)
- The annualized rate of return that smooths out year-to-year variation. A strategy returning 200% over 3 years has a CAGR of roughly 44%. Useful for comparing strategies with different time horizons.
- DCA (Dollar-Cost Averaging)
- An investment strategy where you buy a fixed dollar amount of an asset at regular intervals, regardless of price. Over time, you accumulate more shares when prices are low and fewer when high. See: What is Smart DCA?
- Drawdown (Max DD)
- The largest peak-to-trough decline in an account's value before a new high is reached. A max drawdown of 25% means the account dropped 25% from its highest point at some point during the strategy's history. Critical for understanding worst-case scenarios.
- Fear & Greed Index
- A composite score (0–100) measuring market sentiment. 0–25 = Extreme Fear, 75–100 = Extreme Greed. Used by the Contrarian strategy as a macro-level entry filter — buying during extreme fear.
- Grid Trading
- A strategy that places buy and sell orders at regular intervals across a price range. As price oscillates, the grid captures small profits on each round trip. Direction-agnostic — works in sideways markets. Used by Soomario Farms.
- Leverage
- Borrowing capital to increase position size. 5x leverage means a $1,000 deposit controls a $5,000 position. Amplifies both gains and losses proportionally. A 10% price move at 5x = 50% gain or loss on your capital.
- Liquidation
- When an exchange forcibly closes a leveraged position because losses have consumed the trader's margin. Triggers a market sell (or buy) at whatever price is available, often cascading into further liquidations. See: Liquidation Zones Explained
- Max Pain Zone
- The price range where the highest concentration of leveraged positions would be liquidated. Named because it represents maximum pain for leveraged traders — and maximum opportunity for strategies designed to exploit the resulting price dislocations.
- Moving Average (MA / SMA)
- The average price of an asset over a specific number of periods. A 50-day MA is the average closing price over the last 50 days. Used to identify trends and measure how far price has deviated from its norm.
- Open Interest (OI)
- The total number of outstanding leveraged positions (both longs and shorts) on a perpetual futures market. Higher OI = more leveraged positions = larger potential liquidation cascades.
- Perpetual Futures (Perps)
- Crypto futures contracts with no expiration date. Unlike traditional futures, perps use a funding rate mechanism to keep the contract price close to the spot price. The primary trading instrument on Hyperliquid and OKX.
- Profit Factor (PF)
- Gross profits divided by gross losses. A PF of 2.0 means the strategy makes $2 for every $1 it loses. Above 1.5 is generally considered good. Below 1.0 means the strategy is unprofitable.
- RSI (Relative Strength Index)
- A momentum indicator measuring the speed and magnitude of price changes on a 0–100 scale. Below 30 = oversold (selling may be exhausted). Above 70 = overbought. Soomario uses RSI-2 (ultra-short) for signal precision and RSI-14 for dashboard display.
- Self-Custody
- A model where you retain control of your own funds. In Soomario's vault model, your USDC remains on Hyperliquid under your wallet — the vault leader can trade with it but cannot withdraw it. You can exit at any time.
- Sharpe Ratio
- A measure of risk-adjusted return: (strategy return - risk-free rate) / standard deviation of returns. Higher is better. Above 1.0 is acceptable, above 2.0 is excellent. Compares how much return you get per unit of risk taken.
- Signal Strength
- In the Accumulator, a 0–100% score combining RSI, volume z-score, and price-vs-MA indicators. Higher strength = the asset is more oversold across multiple dimensions. Determines the buy multiplier (1x–5x).
- Sortino Ratio
- Like the Sharpe ratio, but only penalizes downside volatility (losses), not upside volatility (gains). A better measure for strategies where large upside moves are desirable. Higher is better.
- Stop-Loss (SL)
- A predetermined price level at which a losing position is automatically closed to limit further loss. Every Soomario leveraged strategy uses stop-losses on every position.
- Supertrend
- A trend-following indicator that calculates a dynamic support/resistance level based on ATR (Average True Range). Used by Max Pain strategies as a macro directional filter — confirming the larger trend before entering trades.
- Trailing Stop
- A stop-loss that moves in the direction of profit. As price moves in your favor, the stop follows at a fixed distance. Locks in profits while allowing the trade to continue running. Used by Contrarian (+4% activation, 2.5% trail).
- Vault (Hyperliquid)
- A smart contract on Hyperliquid where multiple depositors pool USDC and a vault leader executes trades. Depositors share gains/losses proportionally. The leader takes a profit share on gains only. See: How Vaults Work
- Win Rate
- The percentage of trades that are profitable. A 75% win rate means 3 out of 4 trades make money. Win rate alone doesn't determine profitability — you also need to consider the average win size vs average loss size (see: Profit Factor).
- Z-Score
- A statistical measure of how many standard deviations a value is from its mean. A volume z-score of 3.0 means current volume is 3 standard deviations above the historical average — an extreme reading suggesting unusual market activity (like capitulation selling).