Crypto definitions

Accumulation

Market phase where smart money buys coins.

Altcoin/Alt

Any cryptocurrency that isn’t Bitcoin.

ATH

All-time High.

Bear market

Period of long-term price decline.

Bear trap

Traps sellers to think the price will decline.

Bull market

Market with continuous price uptrend leading to new highs created over a sustained period

Bull trap

where prices rise significantly during a bear market, triggers buying before a larger decline.

Bid/Ask

Bid is buy order, Ask is sell order.

Breakout

Price movement past range boundaries.

Chop

Price moves sideways with no clear direction → causes trades to change their mind frequently and lose moeny

Consolidation

Price chop in a defined region. This is a period of indecision and generally leads to a volatile movement in either direction

Correction/Pullback

Price reversion after rally. Also known as a ‘pullback’.

Day Trading

Turning large investment account into a smaller one.

Demand

Investors' desire for an asset.

Downtrend

Opposite of uptrend, price here makes lower highs and lower lows.

Distribution

The market phase in which smart money sells coins.

Dump/Crash/Nuke

Rapid price decline.

Exchange (Centralised/CEX)

An online marketplace which allows buying and selling of BTC and Altcoins through a centralised company who custody your assets E.g Coinbase, Binance.

Exchange (Decentralised/DEX)

An online marketplace hosted on a blockchain which allows buying and selling of BTC and Altcoins in a trustless manner (no middle man). You retain custody of your assets E.g. Uniswap, Sushiswap.

EV

Expected value. A term used in probabilistic thinking when estimating potential returns of a trade.

Fade

To take a position that is counter to the current trend of a coin. The position is established at the end of an up or down leg

Fiat

Currencies minted by central banks.

Flat/Get Flat

Close position and remain neutral.

FOMO

Fear Of Missing Out in trading.

FUD

Fear, Uncertainty, and Doubt in markets.

Front Running

Taking a position in a coin based on non-public information such as an impending transaction by another person in the same or related coin

HTF

High Time Frame → Referring to a candlestick chart on a longer term basis (Daily, Weekly, etc)

KYC

“Know Your Customer”. Many jurisdictions have KYC regulations, which require verification of new customers when joining an exchange before they can buy or sell crypto.

Leverage

Extra asset bought/sold over capital limit.

E.g. If you want to go long $10000 worth of Bitcoin with an account balance of $1000, you would have to use leverage of 10x. Leverage opens you up to risk of liquidation on sudden price moves.

Long/Going Long/Long Trade

A buy order to open a position on perpetual futures. ‘Buy’ and ‘Long’ are often used interchangeably

Liquidity

The measure of how much demand and supply (bids and asks) there is on the order books for a particular coin. A high liquidity coin has many available buyers and sellers at the same time

Limit Order

Executes at predefined price if reached by market.

LTF

Low Time Frame in candlestick charts.

Liquidation

When you are stopped out of your position because the trade went in the opposite direction and your margins are not sufficient to carry the trade anymore.

Market Cap

Current supply (coins available) multiplied by price.

Market Order

Buy/sell at current best price.

Margin/Initial Margin

Funds needed for leveraged trade.

Maintenance Margin

Amount of account balance (collateral value) required to avoid a margin call. If your balance falls below the maintenance margin, your positions will be liquidated. Note the Margin and the Maintenance Margin are not the exact same number. Always check your specific exchange for the required % of maintenance margin

Moon/Mooning

Sharp rise in coin value.

OHLC

Open, high, low, close in candlestick charts.

Open Interest

Open Interest (OI) is the total number of derivatives contracts currently open for a particular asset. OI is calculated by adding the total number of longs and shorts.

Overbought (OB)

A technical opinion that the market price has risen too steeply and too fast in relation to underlying fundamental factors.

Oversold (OS)

Market price declined too steeply.

P&L/PnL

Profit & Loss in trading.

Pump and Dump

Manipulation to inflate and sell.

Pump/Rip

Rapid price increase.

RoC

Rate of change. The first derivative of a non-stationary time series. Generally calculated as: (Current Period / Previous period)-1.

Rekt

Slang for losing substantial money.

Rally

Upward price trend.

Range/Ranging

Difference between high and low price. Ranging means we are going up and down with no clear trend

Risk

Potential loss in a trade.

Reward

Potential gain in a trade.

RR

Risk Reward ratio in trading.

Scalping/Scalp Trade

Short timeframe trading.

Seed phrases

Words to recover a lost wallet.

Selling off

Coin price going down and thought it will continue to do so.

Slippage

The difference between estimated fill price for a trade and the amount paid due to market conditions, poor execution etc.

Swing Trade

Position in the market held over days, weeks, or months.

Short/Shorting/Short Trade

Profit from falling prices.

Short Squeeze

Short positions being liquidated in the upwards direction. Forces rapid and uncontrolled buying activity which leads to dramatic increases in price.

Spread

Difference between seller and buyer prices. (higher liquidity → lower spread)

Supply

Amount of something for sale.

Stablecoin

Cryptocurrency tied to another asset.

Stop-Loss

Order to limit losses in a trade.

Support

Area where price is expected to hold.

Token

Unit of digital currency.

Time Frame

Spread of each candlestick in a chart.

Trend

General price direction.

Uptrend

Price making higher highs and lows.

Volatility

Percentage price movement.

Volume

Total coins/contracts traded.

Whale

Trader making large bets.

UTC

Coordinated Universal Time for charting.