Quick answer: This glossary defines the 40 most common trading bot and MetaTrader 5 terms in plain language, from Expert Advisor and lot size to drawdown, slippage, VPS and Strategy Tester, so you can read EA documentation and backtests with confidence.
Key takeaways
- Most confusion around bots comes from vocabulary.
- Risk terms like drawdown and equity matter most.
- Cost terms like spread and slippage explain live vs backtest gaps.
- Platform terms help you install and monitor an EA.
- Bookmark this page as a reference.
Platform and software
- Trading bot: software that trades by rules. See what is a trading bot.
- Expert Advisor (EA): MetaTrader's name for a trading bot.
- MetaTrader 5 (MT5): a trading platform that runs EAs.
- MQL5: the programming language for MT5 EAs.
- .ex5: the compiled EA file you install.
- Navigator: the MT5 panel listing installed EAs.
- Algo Trading button: the master switch for automated trading.
- Experts tab: the log of EA actions.
- Inputs: the EA settings you can change.
- VPS: a remote computer that keeps MT5 running. See choosing a VPS.
Orders and positions
- Position: an open trade.
- Lot: the unit of position size.
- Lot size: how many lots per position.
- Market order: an order filled at the current price.
- Pending order: an order waiting for a price.
- Stop loss: a price where a losing position closes.
- Take profit: a price where a winning position closes.
- Trailing stop: a stop that moves with price.
- Hedging account: allows opposite positions on one symbol.
- Netting account: combines positions on one symbol into one.
Costs and execution
- Spread: the gap between bid and ask.
- Commission: a fee per trade on some accounts.
- Slippage: getting filled at a different price than requested.
- Swap: interest paid or received for holding overnight.
- Latency: the delay between platform and broker server.
- Server time: the broker's clock shown in MT5. See sessions and server time.
- Leverage: borrowed exposure that magnifies gains and losses.
- Margin: funds set aside to keep positions open.
- Margin call / stop out: forced closing when margin runs low.
- Rollover: the daily change of trading day, often with wider spreads.
Risk and results
- Balance: account value excluding open positions.
- Equity: balance plus or minus open positions.
- Drawdown: fall from a peak.
- Max drawdown input: the level where an EA stops opening positions.
- Equity floor: a dollar level the EA won't trade below. See risk management.
- Profit factor: gross profit divided by gross loss.
- Win rate: share of trades that closed positive; meaningless without the size of wins and losses.
- Backtest: a test on past data. See how to backtest.
- Forward test: a test on live prices, often on demo.
- Overfitting: tuning settings so closely to the past that they fail on new data.
Frequently asked questions
What is the difference between balance and equity?
Balance ignores open positions. Equity includes their current profit or loss.
What does drawdown mean in trading?
The fall in account value from its highest point to a later low.
Is a high win rate good?
Only if losses are small relative to wins. A high win rate with rare large losses can still lose money.
What does slippage mean?
Being filled at a different price than the one you requested, common in fast markets.
Want to see an EA built around limits you control? Remix Ai is an Expert Advisor for MetaTrader 5 with lot size, session hours, drawdown and equity limits. Launch price $199, one-time payment.
Risk disclosure: this article is for education only and is not financial advice. Trading with automated software carries a high risk of loss, and past or simulated results do not predict future results. Remix Ai sells software. We do not manage accounts, offer copy trading or sell trading signals.