Alpha is the portion of a strategy's return that cannot be explained by exposure to known factors like the market, value, momentum, or quality. Positive alpha means the strategy beats what you'd expect from its factor loadings alone — true skill or edge. Most retail strategies have zero or negative alpha after fees.
Originally defined by Jensen 1968 as the intercept term in a regression of strategy returns against a factor model (e.g. CAPM, Fama-French 3-factor, or Carhart 4-factor). A 5% annualised alpha means the strategy delivered 5% per year that no exposure to standard factors can account for. Hard to achieve, easy to fake via short backtest or transaction-cost neglect — APEX measures alpha against a multi-factor stack with realistic costs.