Trading bot glossary
Plain definitions of the terms used in our reviews, rankings and calculators. Each term has its own link you can share.
| Term | Definition | Read more |
|---|---|---|
| API key | A credential that lets a bot platform place orders on your exchange account. Create it without withdrawal rights. | — |
| Arbitrage | Profiting from a price difference between two markets, such as spot and futures, with little exposure to direction. | Best arbitrage bots → |
| DCA (dollar-cost averaging) | Buying a fixed amount at intervals or after drops, so the average entry price falls over time. | Best DCA bots → |
| Funding rate | A periodic payment between long and short holders of a perpetual contract that keeps its price near spot. | — |
| Grid | A set of buy and sell orders at fixed price steps inside a range. | What is a grid bot? → |
| Infinity grid | A grid with no upper limit that sells small amounts as price rises to keep a constant coin value. | Best grid bots → |
| Leverage | Borrowed exposure on futures. It multiplies gains and losses and sets a liquidation price. | Best futures bots → |
| Liquidation price | The price at which an exchange closes a leveraged position because the margin is used up. | — |
| Maker / taker fee | Maker orders add liquidity and usually pay less; taker orders fill immediately and pay more. | Grid profit calculator → |
| Martingale | A strategy that increases order size after each drop so a small rebound closes the whole position. | — |
| Range | The lower and upper price a grid bot trades between. | Grid profit calculator → |
| TWAP | Time-weighted average price: splitting a large order into equal slices over a time window. | — |