Trading Terminology

Learning the terminology of trading can help you understand the specific terms used in trading, which can improve your comprehension of trading materials and communication with other traders.

Support

A price level at which buying pressure is expected to increase.

Resistance

A price level at which selling pressure is expected to increase.

Volume

The amount of a particular asset traded over a given time.

Market Order

An order to buy or sell at the current market price.

Limit Order

An order to buy or sell at a specific price.

Take Profit

An order to sell an asset at a predetermined price to lock in profits.

Stop Loss

An order to sell an asset at a predetermined price to limit losses.

Liquidity

The ease with which an asset can be bought or sold without impacting the market price.

FOMO

Fear Of Missing Out, a phenomenon where traders buy an asset out of fear of missing a potential profit.

FUD

Fear, Uncertainty, and Doubt, negative sentiments that can affect market sentiment.

Order Book

A list of buy and sell orders for a particular asset.

RSI

Relative Strength Index, is a technical indicator used in trading to measure the strength of a security's price action by comparing its upward and downward movements over a specific period of time. The RSI oscillates between 0 and 100 and is considered overbought when above 70 and oversold when below 30. Traders use RSI to identify potential trend reversals and confirmprice trends.

HODL

Hold On for Dear Life, a strategy where investors hold their positions for a long period of time.

Pump And Dump

A market manipulation strategy where traders artificially inflate the price of an asset and then sell it at a profit.

Whale

A trader or investor with a large amount of capital who can influence market prices.

Satoshis

The smallest unit of Bitcoin, named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto. Example: 1 Bitcoin equals to 100 million satoshis

ICO

Initial Coin Offering, a fundraising method used by startups to issue new cryptocurrencies.

Airdrop

A distribution of free tokens or coins to holders of a particular cryptocurrency.

Candlestick

Candlestick is a chart used in trading that displays the opening and closing prices, as well as the highest and lowest prices reached during a certain period of time. It is used to identify price patterns and trends, and make buy and sell decisions based on technical analysis.

Spread

The difference between the highest bid and lowest ask prices.

Slippage

The difference between the expected price of a trade and the actual executed price.

Altcoin

Any cryptocurrency that is not Bitcoin.

Market Cap

The total value of all coins or tokens in circulation.

Wallet

A digital storage space for your assets.

Cold Storage

A method of storing cryptocurrency offline to protect it from hacking or theft.

Gas

The fee paid to miners to process transactions on the blockchain.

Whitepaper

A document that outlines the technical details and goals of a particular cryptocurrency.

Mining

The process of generating new cryptocurrencies by solving complex mathematical problems.

Hashrate

The measure of the computational power used to mine cryptocurrencies.

Fork

A change in the rules of a blockchain that creates a new cryptocurrency.

Smart Contract

Self-executing contracts with the terms of the agreement directly written into code.

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