Trading Glossary (In Bar English)
Quick, plain-English definitions of the terms you'll run into on Trading Tavern — no jargon left unexplained. If a word on the platform sends you here, you're in the right place.
Calibration
How well a probability forecast matches reality — if a model is well-calibrated, the things it says are "70% likely" actually happen about 70% of the time.
Brier Score
A single number (0 to 1, lower is better) that measures how accurate a set of probability forecasts turned out to be. See our full explainer.
Kelly Criterion
A formula for the "optimal" fraction of your account to risk on a bet with a known edge, aimed at maximizing long-run growth. Full-Kelly sizing is famously volatile.
Quarter-Kelly
Sizing a position at one-quarter of what the Kelly criterion formula suggests — a much steadier ride, at the cost of some theoretical growth rate. Trading Tavern’s default. See the deep dive.
Momentum
A strategy family that bets an in-progress price move continues, based on confirmation like volume and follow-through.
Mean Reversion
A strategy family that bets a price that’s stretched too far, too fast will snap back toward its typical range.
Drawdown
The decline from a peak account value to a subsequent low, usually shown as a percentage. A key measure of how rough a strategy’s ride can get.
Slippage
The difference between the price you expected to get on an order and the price you actually got. Common in live trading, absent in most paper-trading simulations.
Position Sizing
How much of your account you commit to a single trade. Too large and one loss can hurt badly; too small and a real edge barely matters.
Paper Trading
Simulated trading with fake money against real market prices — no financial risk, but it can’t fully reproduce real slippage, liquidity, or the psychology of live trading. Free forever on Trading Tavern.
Order Approval Gate
A checkpoint requiring your explicit, individual approval before any trade is placed. Trading Tavern has no autopilot — nothing fires without you. See the full explainer.
Risk Class
A rough categorization of how much a given strategy or setup can move against you — used to distinguish, for example, blue-chip momentum from micro-cap speculation.
Holding Period
How long a trade is typically expected to stay open, from a few hours (short-term momentum) to months or longer (long-horizon value).
Win Rate
The percentage of trades or forecasts that turn out correct. On its own it’s incomplete — a high win rate with tiny wins and rare huge losses can still lose money overall.
Truth Meter
Trading Tavern’s public scorecard of our own forecasting accuracy — calibration curve plus Brier score, updated as outcomes come in. See the Truth Meter.
Live Connect
Trading Tavern’s real-broker execution feature — currently invite-only and rolling out via waitlist. Every order still requires your approval.
Menu Bucket
One of Trading Tavern’s six named strategy categories (House Lager, Happy Hour Momentum, Last Call Reversal, Barrel-Aged Value, Flight Sampler, Penny Casino), each with a distinct approach and risk profile. See The Menu.
Micro-Cap
A very small, often thinly-traded company by market value. Higher potential volatility and lower liquidity than larger stocks — Trading Tavern caps its micro-cap bucket ("Penny Casino") at 2% of your account.
Diversified Basket
A group of several smaller positions held together instead of one large position, spreading risk across multiple setups rather than concentrating it in one.