When a signal is accepted or rejected, the reason is not a mystery — it is a breakdown you can read line by line. Learning to read that breakdown turns "the bot took this trade" or "the bot refused it" from a black box into a transparent decision you can audit. The whole calculation is just an expected edge with costs subtracted, and whatever is left compared to zero.
The lines you are reading
- Expected edge — the gross move the signal expects to capture. Everything else is subtracted from this.
- Exchange fee — what the venue charges to enter and exit.
- Spread — the bid-ask gap you cross on each side of the trade.
- Slippage — the estimated difference between expected and actual fill price.
- Safety buffer — a deliberate margin for uncertainty, larger when conditions are volatile.
- Net — the edge with every cost removed; this is what the decision turns on.
Reading it, step by step
- Read the expected edge. Start with the move the signal expects to capture — the gross figure every cost will be taken from.
- Subtract fees and spread. Deduct the exchange fee and the spread you must cross to enter and exit.
- Subtract slippage and buffer. Take off the slippage estimate for the fill plus the safety buffer for uncertainty.
- Compare net to zero. If the edge still clears the total cost, the signal is valid; if not, it is rejected and the rejection is logged.
What the breakdown tells you over time
Read enough breakdowns and patterns emerge. If signals keep failing on slippage, your pair may be too thin. If the buffer is what tips them over in fast markets, that is volatility raising the bar exactly as intended. The breakdown is not just a verdict on one trade — it is a running explanation of why the system is as selective as it is. None of it is a forecast or financial advice; it is the cost arithmetic, made visible.
For the rule this breakdown enforces, read the cost-beating rule for trading signals. To compute the same costs yourself, see how to use the trading cost calculator, and for the costs in context, the true cost of a crypto trade.