AI Trading Glossary
Definitions for AI-powered trading concepts used in the Tau Trading System and the broader AI trading industry.
- 7-Dimensional Scoring
- Tau Trading System's multi-factor analysis framework that scores every asset across 7 independent dimensions: Technical, Fundamental, Sentiment, Social, Volume, Momentum, and Pattern. Each dimension produces a normalized score, and the composite provides a holistic view that catches signals single-indicator systems miss.
- Related:Signal Strength
- AI Committee Consensus
- A prediction methodology where multiple specialized AI models independently analyze an asset and then synthesize their views into a single recommendation. In Tau Trading System, 6 AI models debate each trade — a Technical Analyst, Macro Analyst, Sector Specialist, Sentiment Analyst, Risk Manager, and Contrarian — before a strategy-specific chair produces the final consensus prediction.
- Related:Committee Chair SynthesisMulti-Model Debate
- AI-Managed Portfolio
- A portfolio where buy, sell, and rebalance decisions are made automatically by AI algorithms. In Tau Trading System, AI-managed portfolios use committee consensus predictions and risk management rules to automatically adjust positions, with configurable stop-loss protections and defensive mode triggers.
- Related:Automatic RebalancingStop-Loss Protection
- Ask Tau
- An AI-powered conversational interface within Tau Trading System that answers natural-language questions about markets, assets, predictions, and trading strategies. Ask Tau draws on real-time market data, historical analysis, and committee predictions to provide contextual answers.
- Automatic Rebalancing
- The process of automatically adjusting portfolio holdings to maintain target allocations or respond to new trading signals. In Tau Trading System, AI-managed portfolios rebalance based on committee prediction changes, risk thresholds, and market conditions — without requiring manual intervention.
- Related:AI-Managed Portfolio
- Calibrated Confidence
- A confidence scoring method where the stated probability of a prediction being correct matches the actual historical success rate. When Tau Trading System assigns 80% confidence to a prediction, approximately 80% of historical predictions at that confidence level were correct. This is verified through continuous backtesting against actual market outcomes.
- Related:Directional AccuracyHonest Uncertainty
- Committee Chair Synthesis
- The final step in Tau's AI committee process where a strategy-specific chair model reviews all individual analyst opinions and produces a unified prediction. The chair weighs agreement and disagreement among analysts, identifies the strongest arguments, and outputs a direction (BUY/SELL/HOLD), confidence score, and reasoning summary.
- Related:AI Committee ConsensusMulti-Model Debate
- Contrarian Model
- A specialized AI analyst in Tau's committee that deliberately challenges the prevailing view. The Contrarian examines whether consensus positions are overcrowded, whether sentiment has become extreme, or whether the market is pricing in overly optimistic or pessimistic scenarios.
- Related:AI Committee Consensus
- Directional Accuracy
- A performance metric measuring how often an AI prediction correctly forecasts whether an asset's price will go up or down over a given timeframe. In Tau Trading System, directional accuracy is tracked per model, per asset class, and per confidence tier to provide granular performance transparency.
- Related:Calibrated Confidence
- Fear & Greed Index
- A composite indicator that measures overall market sentiment on a scale from extreme fear to extreme greed. Tau Trading System calculates separate Fear & Greed indices for crypto and stock markets based on volatility, momentum, volume, social sentiment, and market breadth data.
- Honest Uncertainty
- A design principle where AI systems explicitly communicate what they don't know rather than presenting all predictions with equal confidence. In Tau Trading System, honest uncertainty is implemented through calibrated confidence scores, model disagreement surfacing, and low-confidence flagging.
- Related:Calibrated Confidence
- Macro Analyst Model
- A specialized AI committee member in Tau Trading System that evaluates assets through the lens of macroeconomic conditions — interest rates, inflation data, GDP growth, central bank policy, and cross-market correlations.
- Related:AI Committee Consensus
- Multi-Model Debate
- An AI architecture where multiple specialized models independently analyze the same data and then compare conclusions before reaching a final output. In Tau Trading System, this debate structure ensures that blind spots in any single model are challenged by other perspectives, producing more robust predictions than single-model systems.
- Related:AI Committee ConsensusCommittee Chair Synthesis
- Risk Manager Model
- A specialized AI committee member in Tau Trading System that focuses on downside risk, volatility assessment, drawdown potential, and position sizing. The Risk Manager can flag assets as high-risk regardless of bullish signals from other analysts.
- Related:AI Committee Consensus
- Sector Specialist Model
- A specialized AI committee member in Tau Trading System that evaluates stocks relative to their GICS sector peers. It analyzes sector rotation trends, relative strength within the sector, and industry-specific factors like earnings cycles or regulatory changes.
- Related:AI Committee Consensus
- Sentiment Analysis (AI Trading)
- The use of natural language processing to gauge market sentiment from news articles, social media, and financial reports. In Tau Trading System, sentiment is one of 7 scoring dimensions, aggregating signals from news sources and social platforms to produce a normalized sentiment score for each tracked asset.
- Related:7-Dimensional Scoring
- Signal Strength
- A composite measure of how strongly an asset's indicators point in a particular direction. In Tau Trading System, signal strength combines the 7-dimensional score magnitude with cross-timeframe confirmation and committee agreement level to produce a single strength rating.
- Related:7-Dimensional ScoringTrading Signal Feed
- Stop-Loss Protection
- An automated risk management feature in Tau's AI-managed portfolios that triggers a sell order when an asset's price drops below a predefined threshold. Stop-loss levels are set dynamically based on asset volatility, position size, and the overall portfolio risk budget.
- Related:AI-Managed Portfolio
- Trading Signal Feed
- A real-time stream of buy, sell, and hold signals generated by Tau Trading System's analysis pipeline. The feed includes the asset symbol, direction, confidence score, and the key factors driving the signal — updated every 10 minutes as new price data is processed.
- Related:Signal Strength
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See these concepts in action on the Tau Trading System.