Want to Be a Qualified Crypto-currency Investor? You Need to Know These Trading Terms
These days many people take crypto-currency as one of their important investments, in order to be a qualified investor, you need to know the following crypto-currency trading terms.
Exchange
Platforms where you can buy and sell crypto-currencies. Such as Coinbase, Binance and CoinTiger.
FIAT
Government-issued currency, such as the US dollar, CNY.
Whale
Someone that owns absurd amounts of crypto-currency.
Limit order / limit buy / limit sell
Orders placed by traders to buy or sell a crypto-currency when the price meets a certain amount. They can be thought of as ‘for-sale’ signs. These orders are what are bought and sold against when traders place market orders.
Sell wall / buy wall
Using a depth chart, traders can see the current limit buy and sell points. The graphical representation on the depth chart looks like walls: https://www.cointiger.pro/#/trade_center
Market order / market buy / market sell
A simple purchase or sale on an exchange at the current price. Market buys purchase the cheapest ETH available on the order book, and market sells fill the most expensive buy order on the books.
Ask price
Selling price.
Bid price
Buying price.
Bid-Ask Spread
The price gap between the sell and buy price.
Margin trading
The act of ‘magnifying’ the intensity of your trades by risking your existing coins. (NOTE: Very risky, only for experienced traders and only on certain exchanges even then)
Going long
A margin trade that profits if the price increases.
Going short
A margin trade that profits if the price decreases.
Bullish
An expectation that price is going to increase.
Bearish
An expectation that price is going to decrease.
ATH
All-Time-High. The highest price point in the history for a certain crypto-currency.
Altcoin
Generally any crypto-currency other than Bitcoin or Ethereum. (Though some Bitcoin folks would probably still say Ethereum is an altcoin)
Tokens
Refers to the ‘currency’ of projects built on the ethereum network that have raised money via issuing their own tokens. Examples:
AIT — AITOKEN
REP — Augur
BAT — Basic Attention Token
ICN — Iconomi
ICO
Initial Coin Offering, somewhat similar to an IPO in the non-crypto world. Startups issue their own token in exchange for ether. This is essentially crowd funding on the ethereum platform.
Shilling / pumping
Someone essentially advertising another crypto-currency. If a coin is promised to cure cancer or be the second coming of Jesus, it’s being shilled.
Stable coin
A crypto-currency with extremely low volatility that can be used to trade against the overall market.
Arbitrage
Taking advantage of a difference in price of the same crypto-currency on two different exchanges. Often mentioned when it comes to comparing ETH prices on Korean exchanges against US exchanges.
FOMO
Fear of Missing Out. The overwhelming sensation that you need to get on the train when the price of something starts to skyrocket.
FUD
Fear, Uncertainty, and Doubt. Baseless negativity spread intentionally by someone that wants the price of something to drop.
FUDster
Someone that is spreading FUD.
Pump And Dump
The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash.
Bagholder
Someone still holding an altcoin after a pump and dump crash. Can also just refer to someone holding a coin that is sinking in value with few future prospects.
Market Cap
The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit.
ROI
Return on Investment. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money).
TA
Trend Analysis or Technical Analysis. Refers to the process of examining current charts in order to predict which way the market will move next.
MACD
Moving Average Convergence Divergence. A trend indicator that shows the relationship between two moving averages of prices.
Bollinger Band
A margin around the price of a crypto that helps indicates when a coin is overbought or oversold.
Average Down
Buying more coins when the price is decreasing to average the overall price. It is an investment strategy.
BTD
Buy the dip. Another phrase for buy low.
Futures
Contracts that an investor buys/sells at the designated price in the future. There are futures markets for oil, crops, and Bitcoin. Most happen in the Chicago Mercantile Exchange (CME), and Chicago Board Options Exchange (CBOE).
Hedge
An investment strategy to decrease risk.
Margin Trading
Borrowing money from others to invest
Market Order
Buying or selling at the best price determined by the community.
Portfolio
A collection of coins you’ve invested.
Rally
A period of sustained increases in the prices
Signals
Another word for sending action. When someone gives a signal, he/she tells you what to buy or sell.
To the moon
A phrase used to indicate the price is going up — till the outer space.
Trollbox
A group chat that resides on the exchange to shill or spread FUD/FOMO.
Vaporware
A product with no meaning and purpose.
Volatility
Another word for price fluctuation.
Weak hands
An investor who panic-sells during tough days.
