Every term used across Soomario products, explained in plain English.
- ATR (Average True Range)
- A volatility indicator measuring the average size of recent price ranges. Used to set adaptive stop distances and grid spacings that scale with how much an asset is currently moving — wider stops in volatile regimes, tighter in calm ones. Used in Farms grid construction and Supertrend.
- Backtest
- A simulation of how a strategy would have performed on historical market data. Useful as evidence about a strategy's behaviour in past regimes — but not a guarantee of future results. See: How to Read a Backtest.
- 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.
- Covered Call
- An options strategy where you sell a call option against an asset you already hold. The buyer pays you a premium; in exchange, they get the right to buy your asset at the strike price if it rises that high. If the asset stays below the strike, you keep the premium and the asset. The cost is giving up upside above the strike. Used by Soomario Premia.
- 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 Soomario as a regime indicator — extreme fear historically corresponds to better entries for accumulator-style strategies.
- Funding Rate
- A periodic payment between long and short holders of a perpetual future, calculated by the exchange to keep the perp price anchored to spot. Positive funding means longs pay shorts; negative means shorts pay longs. Funding also serves as a positioning indicator: extreme funding signals a crowded side. See: Funding Rates Explained.
- 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.
- HIP-3 Perpetuals
- Hyperliquid's framework for listing derivatives that track non-crypto underlyings — most notably US equities like NVDA, TSLA, AVGO, and MSFT. HIP-3 perps trade 24/7 on Hyperliquid against USDC margin and are the venue for Aphelion's stock sleeve and Rotation's equity rotation sleeve.
- Hyperliquid
- A perpetual futures exchange that runs on its own purpose-built blockchain. Notable for first-class on-chain vaults (anyone can deposit into a public vault directly), high throughput, and support for HIP-3 equity perpetuals. The execution venue for most Soomario vault strategies.
- 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. See: Perpetual Futures Explained.
- 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.
- Market Neutral
- A strategy designed to be insensitive to overall market direction — typically by pairing a long position in one asset with a short position in another. Profits come from relative performance (the long outperforming the short), not from the market going up or down. Soomario Alpha is the platform's market-neutral strategy.
- 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 enter at the exhaustion of cascading liquidations. See: Liquidation Zones Explained.
- Mean Reversion
- The tendency of price to return toward an average level after large deviations. Mean-reversion strategies enter when price has moved unusually far from a baseline (deeply oversold or overbought) and profit when it returns. Soomario Max Pain and Zones are mean-reversion strategies; their high win rates reflect that small bounces from exhaustion are common.
- Momentum
- The opposite of mean reversion — the tendency of trending price to continue trending. Momentum strategies enter on confirmation that a trend is establishing and ride it until weakness emerges. Soomario Elite is the platform's momentum strategy. Momentum strategies typically have lower win rates than mean-reversion strategies but larger average wins.
- 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)
- Derivative contracts that track an asset's price without ever expiring. Perps use a funding mechanism to keep the contract price anchored to spot. The primary trading instrument across most Soomario vault strategies. See: Perpetual Futures Explained.
- 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. The most useful single number for evaluating a backtest.
- RSI (Relative Strength Index)
- A momentum oscillator measuring the speed and magnitude of recent price changes on a 0–100 scale. Below 30 is conventionally oversold; above 70, overbought. Soomario uses RSI in different forms across strategies — short periods for mean-reversion entries, longer periods for trend confirmation. Specific period lengths and thresholds are calibrated per strategy.
- Self-Custody
- A model where you retain control of your own funds. In Soomario's vault model, your USDC remains on Hyperliquid under the vault smart contract — the vault leader can trade with it but cannot withdraw it to a private address. 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 volatility taken.
- Signal Strength
- In the Accumulator, a 0–100% score combining momentum, volatility, and trend-extension indicators. Higher strength = the asset is more oversold across multiple dimensions. Determines the buy multiplier (1×–5×) applied to the user's daily DCA budget.
- 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. The gap between Sharpe and Sortino indicates how much of a strategy's volatility is upside.
- 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 placed directly on the exchange — so they fire whether the strategy bot is online or not.
- Supertrend
- A trend-following indicator that calculates a dynamic support/resistance level based on ATR. When price closes above the Supertrend line, the trend is bullish; below, bearish. Used across Soomario strategies as a trend-direction filter — confirming the larger trend before acting on shorter-term signals.
- Theta (Time Decay)
- The rate at which an option loses value as time passes, all else equal. Theta is negative for option buyers (they lose value daily) and positive for option sellers (they gain value daily). Soomario Premia harvests theta by selling covered calls, choosing expirations that capture the steepest section of the time-decay curve.
- Token Unlock
- A scheduled event where previously locked tokens — held by a project's team, early investors, or ecosystem fund — become tradable. Unlocks are publicly disclosed in tokenomics schedules. They create predictable supply increases that can pressure price downward, especially when recipients are likely to sell. Soomario Alpha uses upcoming unlocks as its dominant signal for short candidates.
- Trailing Stop
- A stop-loss that moves in the direction of profit. As price moves in your favour, the stop follows at a fixed distance, locking in unrealised gains. If price reverses, the trail acts as the exit trigger. Trailing stops let profitable trades continue running while protecting accumulated profit.
- Vault (Hyperliquid)
- A smart contract on Hyperliquid where multiple depositors pool USDC and a vault leader executes trades on the pooled equity. Depositors share gains/losses proportionally. The leader takes a profit share on net gains only. See: How Vaults Work.
- Win Rate
- The percentage of trades that close profitably. 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). High-win-rate strategies and low-win-rate strategies can both be profitable; they just have different shapes.
- 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. Used across Soomario strategies as an anomaly detector for volume, price excursion, or other distributional signals.