Glossary

Add-on

An add-on is an addition to a running trade. If one of the take profits of trade is hit, frequently add-ons are described to put some of those profits back in the running trade.

An example; You have 1 BTC bought at $8,000, which you sell 25% at $9,000. At $8,500, you decide to use an add-on, through which you’ll be buying back that 25% in, from which you’ve taken profit previously.

Break-even

Break/even is a common phrase in trading. It means that you got out of the trade without a loss. Frequently, the phrase B/E is used for this meaning.

Buy Range

The buy range is stated as the range you could place buy orders if you want to take a trade. These ranges are very specific in those calls and it’s commonly accepted to follow them strictly. Buying a coin outside of its buy range reduces the potential R/R ratio significantly.

Commodity

A commodity is a raw material or primary agricultural product that can be bought and sold. Frequently, this meaning is used for naming Gold, Silver, and Uranium.

Equity

Commonly used for the legacy or stock markets, in which you can trade companies listed on exchanges as Apple and Amazon.

Fake-out

A fake-out means that a breakout above resistance (or below support) after which the price fails to hold the previous resistance or support, through which the price falls back in the range. An example; https://www.tradingview.com/x/HUS149Cp/

Futures

Futures contracts, often referred to as futures, are agreements that bind traders to buy or sell assets in the future at a specific price and date. These financial instruments are frequently used by both hedgers and speculators as a way to potentially anticipate future price movements, either for hedging against risks or for making profits. Learn how to trade Binance Futures: https://academy.binance.com/tutorials/the-ultimate-guide-to-trading-on-binance-futures

Going Long

Longing Bitcoin (or simply bitcoin long) means buying Bitcoin with the expectation of the price of Bitcoin rising in the future. Essentially longing Bitcoin means buying Bitcoin at the current time to sell them at a higher price in the future.

Example:

You bought 1 Bitcoin at a price of $8,000.

The price of Bitcoin now rose to $10,000 while you still have your 1 Bitcoin.

You can now sell your 1 Bitcoin for $10,000 and you earned $2,000 in the process

Going short

Short selling Bitcoin (or shorting Bitcoin) is a trading strategy that aims to profit from price going down. Short selling Bitcoin means selling Bitcoins with the intention of buying Bitcoins back at a lower price, thus profiting from the price difference between selling point and the buyback point.

Example:

You sold 1 Bitcoin at the price of $10,000.

The price of Bitcoin now dropped to 9,500$ and you have $10,000 in cash on your trading account.

Now you can re-buy your Bitcoins for 9,500$ and end up with 1.052 Bitcoins and essentially making $500 in one trade while the price went down.

Hard stop

A hard stop is a stop/loss to defending your position. A hard stop can be placed through an OCO order or through stop/limit orders and are a defense mechanism to defend your position when it goes the opposite way of your initial trade.

Hedge

An hedge is classified as a trade to cover your initial trade. If you expect the market to reverse in the opposite way of your trade, you can ‘hedge’ your trade by a potential trade in the opposite way. A hedge is never the primary trade.

An example; If you expect the market of Bitcoin to rally from $8,000 to $10,000, you decide to buy 1 BTC. However, at $9,000, you expect the price to drop partially to $8,500. To cover these potential losses, you open a short position of 1 BTC, through which you won’t lose any value in the drop from $9,000 to $8,500.

Higher High (HH)

This is the term you use when the price reaches a higher point than the previous high (see picture). https://www.tradingview.com/x/QzOLlrAN/

Higher Low (HL)

This is the term you use when the price reaches a higher point than the previous low (see picture). https://www.tradingview.com/x/OgMPCTXp/

Invalidation

Invalidation is a very simple meaning. If a trade gets stopped out or loses a significant level, the scenario gets invalidated and we commonly speak of invalidation.

Manual Stop/Loss

A manual stop/loss is not a ‘hard stop’. It states that you are going to watch the markets to see how the daily closes. Sometimes it’s hard to have a stop/loss in place due to deep wicks or coins with a very low sat value. In that case, alerts are placed on the stop/loss level to have full focus on the markets. If the price closes below the level on a Daily timeframe, the manual stop/loss gets activated.

Long Squeeze

Long squeeze means that the value of a cryptocurrency such as bitcoin is dropping fast within a short time. This happens if there is a high supply in the short term, but low demand. If you have taken a long position, it will be closed. Does that happen to many traders at the same time? Then you speak of a long squeeze. https://www.tradingview.com/x/z83vUDGC/

OB (Order Block)

An order block is a compression of price movements before the asset starts to accelerate again. These order blocks frequently act as support/resistance levels as well.

An example; https://www.tradingview.com/x/pOKNfgoG/

Reject

A rejection is a confirmation of support or resistance in which the price refuses to fall through a certain support level or refuses to break through a certain resistance level.

An example; https://www.tradingview.com/x/r9eLn394/

Resistance

Resistance consists of a level in which the price of an asset fails to breakthrough due to strong selling pressure. In some cases, the occurrence of resistance levels may also be related to big sell walls, that prevent the price from rising further.

So a resistance level is expected to act as a “ceiling,” caused by a large supply of sellers in that price area. As such, traders can interpret resistance as a level that can only be surpassed with significant buying pressure.

Resistance, or a resistance level, is the price at which the price of an asset meets pressure on its way up by the emergence of a growing number of sellers who wish to sell at that price. https://www.tradingview.com/x/8nuxcMAo/

Retest

A retest is a price movement of the asset through the previous keypoint prior to a breakout. In the example, a retest is done of the previous resistance, through which confirmation of support is found and a support/resistance flip is done. https://www.tradingview.com/x/mAOmAOci/

Risk Level

The risk levels are defined through ‘Low, Medium, High, Very High’ in which a low-risk profile says that there’s not much risk involved, while a very high-risk level states that there’s a significantly higher amount of risk involved. The latter always confirms a reduction of sizing of your trade, due to the higher risk.

Risk / Reward Ratio (R/R)

The risk/reward ratio helps traders to manage their risk accordingly.

An example; If you decide to buy 1 BTC at $10,000 with a stop/loss at $9,500, your potential loss is $500. However, if your target is $11,000, your potential profits are $1,000. Then we can do the calculation; $1,000 / $500 = 2. The Risk / Reward Ratio is 2.

The higher the risk/reward ratio, the lower the success rate is needed to become profitable.

Sell Range

The sell range is stated as the range you could place sell orders if you want to take a trade (frequently a short). These ranges are very specific in those calls and it’s commonly accepted to follow them strictly. Selling a coin outside of its sell range reduces the potential R/R ratio significantly.

Short Squeeze

Short squeeze means that the value of a cryptocurrency such as bitcoin is rising rapidly within a short time. This happens if there is a low supply in the short term, but high demand. If you have taken a short position, it will be closed. Does that happen to many traders at the same time? Then you speak of a short squeeze.https://www.tradingview.com/x/lQLreVbc/

Scalp

This method typically involves creating many small trades very quickly. The initial gains for one of these trades may not seem like much, but they all add up. If you’re patient enough to complete a strategy like this, then the gains could be substantial for you when they’re added up at the end of the trading day.

Spot

Spot trading is simply buying or selling a commodity or, in this case, a crypto asset at the moment of the trade. Learn how to spot trade on Binance here: https://www.binance.com/en/support/articles/115003765031

Stop / Loss

A stop/loss is an insurance policy in case of a wrong trade. The markets can’t be predicted and trading is a probabilities game. Once a trade goes the wrong way, a stop/loss trigger can close the position on a certain level, through which the potential loss is reduced of this position.

Support

Support refers to a level that tends to hold the price of an asset, preventing it from going down. The occurrence of support levels is caused by a strong buying pressure at that price zone, but it may also be related to big buy walls that can make it harder for the price to drop further.

As such, a support level is expected to act as a “floor,” and it’s usually caused by a large supply of buyers in a certain price region. So we may consider support levels as points in which the price can only break down with strong selling pressure. https://www.tradingview.com/x/mFOsjWsz/

Support/Resistance Flip

A support/resistance flip identifies itself through the confirmation of resistance becoming support. The asset has been moving below a certain price level (resistance), after which it breaks through that level. After such a breakout, the most likely cause is a retest of the previous resistance level for confirmation of support and then the support/resistance flip is identified. https://www.tradingview.com/x/aM7eNtSP/

Target / Take Profit / TP

The take profit or target is a clear level stated in the calls where people take their profits of the trade. A full-blown strategy for taking profits is also given in the channels.