Cryptocurrency Trading Terminologies

We MUST understand the correct definitions of a few terms before you can learn to trade. The key terms have been listed, and I've attempted to explain them as simply as I can. Please go through these if you're a new trader. Those who already trade can brush up on their knowledge.

1 Bitcoin = 100 Million satoshis

Altcoin- everything but bitcoin. In addition to bitcoin, all other crypto currencies are included in this.

Arbitrage: This is a term used to describe a way to profit on pricing disparities between exchanges. For instance, arbitraging requires you to buy bitcoin from Binance, where it is trading at $60,000, and move it to Coinbase, where it is trading at $60,200, in order to make a profit.

ATH: The term "All Time High" refers to the highest price a cryptocurrency has ever experienced. This acronym stands for "All Time High."

Average Down: This is the process of steadily purchasing an asset at a decreasing pace in an effort to lower the average entry cost of a position.

Bag holder: A person who holds a coin or token is referred to as a bag keeper.

Bear Market: Market in which prices have seen a significant sell-off that resulted in the setting of new lows and a long-term downward trend.

Bear trap: The term "bear trap" describes a method through which market makers sell a significant portion of a cryptocurrency asset all at once, causing a sharp decline in the price of the cryptocurrency asset. Everyone believes that the market has turned bearish, so they all rush to sell out of fear. The price is now driven higher by the market makers' massive purchases, trapping those who had sold off in the belief that a bear market had just begun.

Bear: A phrase used to describe someone who anticipates a decline in the price of a crypto asset.

Bearish: This is the attitude a trader will adopt if he anticipates a decline in the value of a crypto asset.

Block: This is a description of data sets found in a blockchain.

Blockchain: is the core technology that underpins cryptocurrencies. It is a digital system for maintaining records.

Bots: These are automated trading platforms that carry out trades without human intervention.

Bull market: This is a market where prices are experiencing an ongoing upward trend that is causing new highs to be set.

Bull trap: This term refers to a strategy employed by market makers to buy a significant amount of a cryptocurrency asset all at once, which drives up the price of the cryptocurrency asset. Everyone rushes to buy because they believe a breakout has just occurred. The market makers are currently selling in massive quantities, which drives the prices down and traps those who bought assuming a breakout had occurred.

Bull: A phrase used to describe someone who anticipates a rise in the price of a cryptocurrency asset.

Bullish: A trader will have this attitude if he believes that the price of a crypto asset will increase.

Bull market: A market where prices are experiencing an ongoing upward trend that results in the creation of new highs. usually occurs when new investors come into the market.

Bull trap: A strategy utilized by market makers to purchase a sizable amount all at once, driving up the price. This convinces others that this is a breakthrough, and they all buy. After driving prices down with their massive sales, the market makers liquidate everyone else who had purchased, creating a domino effect of liquidations.

CMP: Current Market Price

Coin: A coin is a symbol for a digital value store that resides on a specific blockchain or cryptocurrency network.

Consolidation: This is a time when prices are fluctuating within a well defined range. This is also known as a period of market indecision, which typically results in a volatile movement in either direction.

Correction: The phrase should read "fall" or "drop-in price" when the price had reached a new record high.

Cryptocurrency: Cryptocurrency simply refers to a form of money that is electronic, decentralized, and dependent on cryptography.

Cryptography: In order to prevent possible observers from understanding the information being communicated, it must be encoded and decoded using a process known as cryptography.

Cryptosis: This is the unceasing urge to consume all cryptocurrency-related knowledge.

DApps: Decentralized Applications, or DApps for short, are software programs created by developers and installed on a blockchain to perform operations without the need for middlemen.

DAC: Dollar Cost Averaging, also known as DCA, is an investment method in which a person makes a larger investment in a digital asset over time in smaller amounts.

Decentralization: Simply put, decentralization is the process of distributing power in a non-centralized manner.

DeFi: Decentralized Finance, or DeFi, is the abbreviation for financial transactions that are carried out without the assistance of a middleman like a bank, the government, or another financial organization.

Distributed Ledger: A system of storing data that is simply scattered or dispersed among numerous devices is referred to as a "distributed ledger." For instance, the distributed ledger known as the blockchain was first developed to record all bitcoin transactions.

Downtrend: When a market is in a downtrend, prices are still making lower highs and lower lows.

DPoS is an acronym for "Delegated Proof of Stake," a type of Proof of Stake that relies on master nodes or super nodes to verify transactions.

Dump: This is the term for the price collapse of a cryptocurrency asset that is caused by enormous sell-offs following the concomitant spread of fear, uncertainty, and doubt. A gang may employ the pump-and-dump strategy to influence the market sentiment for a crypto asset.

Escrow: When two parties to a transaction may not trust one another, a third party will retain the financial resources offered for the transaction on behalf of the other parties.

Exchange: A virtual market place where cryptocurrency transactions can be made. Specifically, a cryptocurrency marketplace that enables the buying and selling of Bitcoin and other coins Eg.Bybit,Bitmex.

FOMO: "Fear of Missing Out" or "FOMO" is the acronym. Beginners in the crypto currency market frequently rush into trades without doing enough study out of concern that they will lose out on potential rewards.

Fractal: This is a price movement pattern that has already occurred and is likely to do so again.

FUD: Fear, Uncertainty, and Doubt are abbreviated as FUD. This is a psychological ploy designed to sow doubt and anxiety that the value of a particular cryptocurrency asset may fall.

Gas is the term for the cost associated with using a service on a blockchain network. It may also be referred to as a charge made for transaction validation.

Hash: A blockchain's blocks and transactions are identified by a particular string of numbers and letters called a hash.

Hold on For Dear Life, or HODL, is an acronym for the passive investment approach in which investors buy and hold onto a crypto asset or assets rather than trading them in the hopes that their value would rise in the future.

Hot Wallet: A software-based bitcoin wallet with an internet connection is called Hot Wallet.

ICO: This acronym stands for "Initial Coin Offering," which is what businesses operating in the blockchain environment will use to advertise their offerings in order to raise money. A new coin, application, or service will be developed using the ICO launch's proceeds.

KYC: The acronym KYC stands for "Know Your Customer," which mandates that businesses that provide the sale of cryptocurrency assets must confirm the users' identities.

Leverage: This is the amount of an asset that is purchased or sold in excess of your capital. Leverage of 5x, for instance, is defined as purchasing or selling $1,000 worth of BNB with only $200 in money.

Limit Order: A limit order is one that directs the purchase or sale of a cryptocurrency asset at a predetermined or desired price.

Liquidation: This is the term for the forcible closing of a trader's leveraged position as a result of a partial or complete loss of the initial margin required to maintain the leveraged position. When a trade or position moves in the other direction, this occurs.

Liquidity: An indicator of how actively a crypto asset is exchanged in the market is called liquidity. Simply said, a cryptocurrency asset with high liquidity has lots of concurrent buyers and sellers, making it simpler to acquire or sell that cryptocurrency asset at any time.

Long Position: This is just a leveraged buy position. When you anticipate that the price of a crypto asset will increase, you open a long position.

Margin: The sum of money needed to start a leveraged deal is referred to here.

Market Capitalization: The entire value of all the coins that have been mined is referred to as the market capitalization of a cryptocurrency asset. This can be obtained by multiplying the cryptocurrency asset's supply in circulation by its market price right now.

Market Order: A market order is a request to buy or sell a cryptocurrency asset at the best price currently being offered on the market.

A mining incentive is a payment that miners receive in exchange for validating transactions and assembling them into blocks.

A mining rig: is a building that houses the technology used to mine cryptocurrencies.

Mining: New units of a virtual currency are made available through the mining process, which also keeps track of user transactions.

Mooning: A cryptocurrency asset "mooning" when its price and volume surge.

NFTs, also known as "Non-Fungible Tokens," are monetary units that are intended to denote ownership of special digital goods like works of art or collectibles.

Node: A computer that is connected to a blockchain network is referred to as a node.

Noob: In the crypto world, a noob is a newcomer who doesn't have in-depth knowledge of crypto currencies.

OHLC: "Open, High, Low, Close" is the abbreviation for this phrase.

OTC : OTC stands for Over the Counter Trade. This refers to purchasing a cryptocurrency asset in bulk without first checking the order books.

P2P stands for "Peer to Peer," which refers to two users communicating directly for the purpose of conducting a transaction without the involvement of a third party.

Pattern: Technical analysts or chart analysts have historically examined preset shapes known as patterns or chart patterns. These historical performance metrics are used by traders to forecast future price changes. A head and shoulders top, for instance, is seen as a bearish pattern.

POS is an acronym that stands for "Proof of Stake," a different way to verify transactions. The majority of digital currencies that employ this method of verification deliver all of their tokens up front, and miners are chosen based on the number of units they possess, which represents their stake.

Positional Trading: This style of trading entails purchasing crypto assets with the intention of holding them for a considerable amount of time.

POW stands for "Proof of Work," an acronym for a technique for demonstrating that a digital currency transaction has been confirmed.

Private Key: This term describes a code that is encrypted and provides access to your coin. Your private key is something you should never share with anyone, just like your bank account password.

Public Key: This is the address you use for your wallet, which is similar to your bank account number.

Pump and dump: A group of people will utilize the pump and dump technique to amass a low volume coin, promote it to shops, and then sell it at a large profit after receiving a significant amount of pre-existing sell orders. This is also known as a form of investment strategy when numerous people collaborate to artificially raise the price of a cryptocurrency asset so that they can sell it at a higher price. This is referring to the cryptocurrency asset's price skyrocketing.

Rally: This describes an ongoing upward trend that raises the value of a crypto asset.

REKT: To experience losses from crypto assets that have fully lost their worth. to having your portfolio decimated. Slang for "wrecked," "REKT" is derived from that word.

Resistance: Simply put, resistance is the point at which the price of a crypto asset typically encounters supply pressure that is sufficient to prevent or revert the price from advancing upward in an uptrending market.

ROE: The acronym for "Return on Equity" is "ROE."

Sell Off: This occurs when investors take profits following a price rally, which lowers the asset's price.

Short position: Simply said, a short position is a sell position with leverage. When you anticipate that the price of a crypto asset will decline, you establish a short position.

A sideways market is one that is completely unresponsive and not moving toward a collapse or breakthrough.

A smart contract is an algorithmic program that automatically implements a contract's provisions based on its code.

Spread: The price differential between what sellers are willing to sell for and what buyers are willing to pay. Every exchange has a tiny spread; the higher the liquidity, the smaller the spread. E.g. The spread in the scenario below is $10. The order book in the picture below explains the aforementioned terms.

Statistics: This is the abbreviation for Satoshi, the smallest Bitcoin unit. The value of one Satoshi is 0.00000001 Bitcoin.

Stop Loss: This is an advanced order used to sell a cryptocurrency asset when its price reaches a certain level. It is designed to prevent losses to both capital and to previously earned profits from trading. order that is put into motion when the price falls below this threshold. utilized to reduce losses

Supply Zone: There are numerous large sell orders in this zone.

Support: This is just a price level where a cryptocurrency asset's price tends to find demand pressure that is sufficient to prevent additional price declines in a downward trending market.

Support and resistance: A support is a region or line where we can anticipate a price reversal. Resistance is a line or area where we can anticipate a downward price comeback. This will be covered in the upcoming lessons.

Swing trading: In this type of trading, positions are taken over the course of several days or weeks in expectation of swift market moves.

Time frame: The term "time frame" describes the predetermined periodicity at which price action is shown on a chart. For instance, the 15-minute, 1-hour, and 1-day time frames, among others.

The total supply: This is the finite quantity of coins or tokens that will ever be produced.

Uptrend: Markets that are in an uptrend are those where prices keep hitting higher highs and higher lows.

Volatility: The measurement of the level of a cryptocurrency asset's future price uncertainty OR the pace at which the price of a cryptocurrency asset rises or falls for a specific set of returns.

Wallet: This is a term used to describe a location where your cryptocurrency holdings may be kept. Wallets can be either hot (software-based or online) or cold (offline which is usually on a device).

Whale: A trader who, in comparison to a retail trader, has an extremely huge position.

White Paper: This term refers to written materials produced by a particular digital asset's creators. These publications provide in-depth details on both the underlying technology and the digital asset.