Cryptocurrency Trading Glossary

Crypto Trading Glossary

Crypto trading, like any other sphere where humans work together, has its own lingo. Hearing (or reading) it can be really confusing for novice traders. Since traders work with money, any misunderstanding can lead to losses. To help you avoid such losses, we decided to compile our own crypto trading glossary.

Airdrop

A free of charge crypto distribution method. Usually happens during the beginning of a hard fork attempt to attract more users or retain already existing. 

Altcoin

Any other crypto coin other than Bitcoin, though some argue that Ethereum should also be excluded from the list.

AML

Anti-money-laundering laws, regulations, and procedures that aim to end the unlawful income practices.

Arbitrage

A method of getting profit by using price differences between various exchanges. For example, if Bitcoin costs $9,000 on one exchange and $9,080 on another one, then the arbitrage profit would be $80 if you buy at the first one and sell at the second.

Ashdraked

Being ‘Ashdraked’ means losing all your money by shorting Bitcoin. It comes from the name of a Romanian investor who insisted on shorting Bitcoin and, as a result, lost all his investments.

Ask Price

A price that the seller is willing to accept for their crypto.

ATH

‘All-time High’. In the context of cryptocurrencies, it marks the maximum price ever reached by the crypto.

Bagholder

A person who either holds a crashing coin or altcoin after it was Pumped and Dumped.

Bear 

A bear is a trader who banks on the market value going down. A bear market is a period during which the price of the asset goes down,

Bear Trap

A situation when the price of the asset goes down, prompting bears to sell their positions, and then starts to rise again, thus ‘trapping’ them.

Bid Price

A price that the buyer is willing to pay for the crypto. Opposite of the ‘Ask Price’

Bitcoin ATM

ATM that allows people to purchase Bitcoin using a debit or credit card.

Blockchain

The technology behind the crypto, it is a public database protected by cryptology, that can only be updated by its owners.

Bollinger Band

Bollinger Bands

Bollinger Band (BBand), is a margin around the price of a certain cryptocurrency, that allows seeing whether it is being overbought or oversold.

BTD

‘Buy the dip’ – used as an advice to buy an asset during the price dip.

Bubble

A crypto bubble is a state when crypto’s price remains stable for a long time before its price explodes and goes up. When the ‘burst’ of a bubble happens, its price starts to drop as quickly as it rose. 

Bull

Opposite of a bear, a bull is a trader who bets on the market value going up. A bull market is a period of time when the price of an asset goes up.

Bull Trap

Opposite of a Bear Trap, this is a situation when the price of an asset goes up, prompting bulls to buy it, and then starts to fall.

Candle/Candlestick Chart

Candlestick Chart

It is one of the most popular price charts that shows the highest crypto price, the lowest one, and the prices at the opening and the closing of the trade during a certain time period.

Close

The end of a trading session when the financial markets close. It also has another meaning: the closing of a certain deal.

Cold Storage

A way to store your cryptocurrency offline, usually on hardware or paper wallet.

Dead Cat Bounce

A small, brief recovery of a crypto’s price, followed by further decline.

Deposit Fee

A fee that most exchanges take when you deposit fiat currency on the platform. It can be either a fixed fee, or depend on the sum in question.

Depth Chart

Depth Chart Cryptocurrency trading

A display showing the total number of buy and sell orders. It is usually split in two, allowing to show buy and sell orders at the same time.

Derivatives Market

A market for financial derivatives, like futures and options.

Deterministic Wallet

It is a wallet that needs to be backed up only once. It generates all your keys and addresses and can be recovered from the “seed”.

ETF

An Exchange-traded Fund, an investment fund that users trade on exchanges and trading platforms.

Bitcoin Dominance

The ratio between the market share of Bitcoin and that of altcoins.

Double-spending

A successful attempt to use the same crypto coins for multiple payments at once.

Exchange

A platform that allows you to swap your crypto coins for another crypto or fiat money.

Fiat Currency

It is a currency controlled by the government and declared by it to be a legal one, while not being backed by a commodity. Good examples of fiat are USD, EUR, and GBP.

Futures

Futures, or a futures contract, is an agreement to buy or sell an asset on a certain date at a predetermined price.

FUD

Negativity and panic spread by someone who wants to profit from it (a FUDster).

Going Long/Short

Going Long/Short is a margin trade situation that happens when the trader profits from the rising/falling price of the crypto. 

Hardware Wallet

A device that can safely store cryptocurrency.

Hot Wallet

A wallet that can be accessed from the internet. Less secure than their Cold Storage counterparts.

JOMO

‘Joy of missing out’, a trading concept when traders should sometimes take a time-out to carefully assess the situation, without worry that they will miss a good deal.

KYC

Know Your Client’. A procedure when a trading platform or exchange would require you to confirm your identity in order for you to use them.

Limit Order

An order placed by a trader to make a deal when the crypto’s price reaches a certain threshold.

Liquidity

An ability of crypto to be sold without causing a significant price change, or a value loss.

MACD

MACD

The Moving Average Convergence/Divergence indicator. This is a technical indicator used in the technical analysis assessment of forecasts and fluctuations in the cryptocurrency market.

Margin Call

A situation when one or more securities in the trader’s account have fallen below a certain threshold, prompting the trader to either deposit more money or sell some assets.

Margin Trading

A type of trading, when you add leverage to your trades. It works by borrowing money to increase your buying power.

Market Capitalization

A total value of the cryptocurrency, calculated by multiplying the price of a single coin on the total amount of coins.

Mooning

In terms of crypto trading, mooning means a rapid rise of a crypto price to record heights. 

One Cancels The Other Order

A pair of orders with a stipulation that if one of the orders is executed, another should be immediately canceled. Used for risk mitigation and to enter the market.

Open/Close

Opening position means that the trader entered the market and holds a certain amount of the crypto. To close the position, a trader should either sell or buy that crypto, depending on whether he chose a close or long one.

OTC

OTC, or ‘Over The Counter’ is trading that happens directly between two parties, with no exchanges or trading platforms involved.

Pair

Pair trading is a strategy when a trader opens two opposing positions in related assets, to ensure that they will win no matter what happens on the market.

Paper Wallet

A wallet that is produced by directly printing the keys and addresses on the paper (hence the name).

Pump and Dump

A tactic of inflating the price of altcoin by getting more people interested in it, followed by the crash.

Resistance

A certain price limit that the crypto in question will rarely, if ever, exceed.

ROI

Return on investment, a percentage that shows the amount of profit made compared to the initial investment.

RSI

Relative Strength Indicator, a way to ascertain whether the crypto is being oversold or overbought, allowing you to find the best entry and exit points.

Sig/Signature

An encrypted authentication key.

Software Wallet

Storage for cryptocurrency that works entirely as a program on the trader’s computer. 

Spread

A price difference between asking and selling prices of the asset.

Stop Loss Order

It is an order designed to limit possible losses by stopping the trade on reaching a certain level. It could be set on any desired threshold.

Support

The opposite of Resistance, it is a threshold that crypto’s price doesn’t fall below.

Technical Analysis

A trading strategy that evaluates investments and trading potential of cryptocurrencies based on the statistical data.

Think Long Term

It is common advice for traders, prompting them to invest more in long-term trading, allowing them to get more profit later, instead of some profit now.

Trading Volume

The total number of crypto was traded during a certain period of time.

Trading Fee

A fee that you pay for a transaction on the exchange or a trading platform.

Volatility

The intensity of the crypto’s price fluctuations, the currency is considered volatile if its price changes significantly on a daily basis.

Whale

A person who holds enough cryptocurrency to be able to significantly influence its price dynamics.

Withdrawal Fee

A fee that exchanges or trading platforms receive on the withdrawal of money from the deposit.

While it is by no means a complete glossary, since new terms keep appearing, we hope that you will find it useful. If you need more information on crypto trading, you can always find it on our blog. Stay tuned for more!

Now that you know what those terms mean, you can enter trading armed and ready. To start, you can always buy some crypto via Changelly:


About Changelly

Changelly is a secure instant crypto exchange that has 160+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2015, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.

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