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.
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.
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.
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.
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.
Slippage
The difference between the expected price of a trade and the actual executed price.
Cold Storage
A method of storing cryptocurrency offline to protect it from hacking or theft.
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.
Smart Contract
Self-executing contracts with the terms of the agreement directly written into code.