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80 Crypto Trading Terms You Must Know

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So, you have started to get acquainted with the crypto market but there are still some crypto trading terms or abbreviations whose real meaning you don’t understand? You came to the right place because, in this article, we will explain the most used expressions in the simplest possible way.

Without further ado, let’s dive into it.

1. Trading Bot

Aa automated software which places buy and sell orders on exchanges on the behalf of the trader.

2. API

API or Application Programming Interface is a way for various components to communicate with each other. In crypto, API is the system that enables a program (for example, trading bot) to communicate with the user’s exchange account or crypto wallet.

3. Automated Trading

In automated trading, traders set up a specific set of rules for entries and exits that are then automatically carried out by a pre-programmed computer.

4. Backtesting

Once a trader devises a trading strategy, he can test it on some past market timeframes, which is called backtesting.

5. Trading Signal

A signal for market action. Be it to place a buy or sell order, a trading signal is always based on some form of analysis (fundamental or technical).

6. Trading Products/Instruments/Features

Crypto trading products are everything you can trade in the market – bonds, stocks, CFDs, ETFs, futures, etc.

7. Leverage

When trading with leverage, a trader who already has funds he’s going to invest, basically borrows the extra cash from the exchange or a broker to enhance his gains.

8. Go long

Going long is buying a cryptocurrency with the intention of selling it at a higher price. One of the most important crypto trading terms.

9. Go short

Going short is selling a cryptocurrency with the intention of re-buying it at a lower price and lock the profit from the price spread.

10. Derivative trading

All types of trading that don’t include owning the traded asset are called derivative trading, such as Bitcoin CFDs, ETFs, BTC futures contracts, etc.

11. Futures trading

Futures trading is when a buyer and a seller make a contract to buy and sell a cryptocurrency at a pre-determined price on a pre-determined date.

12. Swaps trading

Swap trading is when a trader trades an asset without going on a platform owned by a third party (e.g. exchange).

13. Stop loss

A sell order placed below the buying value of the cryptocurrency to stop a trader from losing more money if the price starts declining.

14. Margin Trading

Like leverage trading, margin trading refers to borrowing money to trade an asset.

15. Margin Balance

The amount a trader borrows to do margin trading.

16. Margin Order

Placing a buying or selling order with a certain amount borrowed from an exchange or a broker.

17. Interest rates on leverage trading

Just like with a bank loan, when trading with a borrowed money, a trader needs to return the loaned funds to the broker or the exchange with interests.

18. Liquidation Level

A level (the exact amount of funds in trader’s account) at which liquidation process is automatically executed at the best available exchange rate. One of the most important crypto trading terms.

19. Guarantee Stop loss

A stop-loss order that guarantees that a cryptocurrency will be sold at that exact pre-determined price. Some CFD trading platforms does offer this feature.

20. Auto Deleveraging (ADL)

Or ADL is a case the exchange or a broker automatically deleverages trader #2 if a trader #1 cannot fill the liquidation. This feature can only be found on certain trading platforms and eToro is a great example.

21. Negative Balance Protection

An automatic system which ensures that a trader trading with leverage doesn’t lose more money than he initially deposited.

22. Trading strategies

A pre-determined set of rules by which a trader behaves in the market.

23. Day trading

A strategy where all buy and sell orders are closed inside a single market session (a day).

24. Swing trading

A strategy where traders take longer time (usually more than a couple of weeks) to close their trading plan.

25. Arbitrage trading

A trading strategy implemented by traders which look to profit from a spread between the price of a cryptocurrency on various exchanges or of the differing ration between more than two coins on a single exchange.

26. HODL

Initially a typo but now considered to mean Hold On for Dear Life means buying and keeping a cryptocurrency for a longer period of time (usually more than a year) in a hope that it will reach some pre-determined price. One of the funniest crypto trading terms.

27. Technical Analysis (TA)

Used for shorter-term trading, Technical analysis is an implementation of various tools on a trading chart in order to discover future market movements. This is an important resource for everyone learning about the crypto market. If you’re interested, you can read our Technical Analysis here.

28. Technical Indicator

A visual representation of an analytical mathematical calculation shown in the cryptocurrency trading chart.

29. Moving Average Convergence Divergence (MACD)

A technical indicator which calculates the difference between cryptocurrency’s 26-day and 12-day Exponential Moving Averages (EMA), with both using closing prices of the measured period.

30. Bollinger Band

A combination of the 20-day Exponential Moving Average (EMA) and two related bands forming a channel which represents the price volatility.

31. Relative Strength Index (RSI)

A momentum indicator, depicted as an oscillator below the trading chart, providing a clear picture if a cryptocurrency is overbought or oversold. It has values between 0 and 100 and moves between those two extremes.

32. Average Directional Index (ADX)

A technical analysis tool used by traders to determine the overall strength of a current trend a cryptocurrency follows in the market.

33. Trading Chart/Graph

A visual representation of a crypto’s price movement, mostly by “candlesticks”.

34. Time interval

The amount of information contained by a single candlestick. In the 15-minutes interval, a single candlestick is going to represent what happened to the price of a cryptocurrency during a period of 15 minutes.

35. Candlesticks

A visual representation of a spread between the opening and closing price of a cryptocurrency during a certain time interval in the chart. A red candlestick means that the price declined while a green one represents positive price movement. This one is among the most important crypto trading terms.

36. Support

The support is the price point where, during the declining price movement, buyers start pushing the price of the cryptocurrency back upwards.

37. Resistance

The price point where sellers, during the rising price movement, start pushing the price back down.

38. Opening price

The price at which an asset begins trading in at the beginning of a trading day. In crypto, since the market is opened 24/7, can refer to the price at the beginning of the calendar day.

39. Closing Price

The price at which an asset ends trading in at the end of a trading day. In crypto, since the market is opened 24/7, can refer to the price at the end of the calendar day in a daily chart.

40. Fundamental Analysis

An analysis performed over the fundamental features of a cryptocurrency and its underlying project to discover its long-term potential (e.g. market competition, development team, regulatory environment, marketing potential, etc.). One of the most important crypto trading terms for those who are learning the trade. You can read our updated Fundamental Analysis here.

41. Social Trading and Copy Trading

Social trading is when investors enable each other to “see” their trades and strategies on online platforms. In turn, that enables copy/mirror trading where investors literally copy each other’s market moves. Etoro is the best example of a social trading platform.

42. Pump and Dump

A market event when the price of a single cryptocurrency suddenly surges pushed up by an unsuspecting buying wave just to be pushed back down by an even heavier selling session, making those that invested near the peak lose a lot of money.

43. Order Book

A section of the exchange where all active buy and sell orders can be seen.

44. Limit Price

Prices at which buyers and sellers place their orders that cannot be immediately filled since they differ from the current market price. One of the most important crypto trading terms.

45. Market Price

The last value a cryptocurrency has been sold/bought for.

46. Fill or Kill

An order which is terminated unless it has been immediately filled.

47. Stop-limit

A conditional trade tactic implemented over an established timeframe combining stop and limit orders with the aim of lowering the risk, mostly implemented in automated trading and trading bots.

48. Trailing Stop

A series of stop-loss orders placed strategically over a declining price range.

49. Order History

Compiled information on all filled orders a trader made on the trading platform.

50. ICO

Initial Coin Offering is a way for companies to fund their ventures by selling their utility tokens to private and institutional investors before releasing them on the open market.

51. Token

Representation of value inside the network. Contrary to coins, tokens enable their owners to participate in the network.

52. Coin

Similarly, to tokes, it is the representation of the value inside the network but does not give the user the power to participate in the network.

53. Ticker Symbol

Abbreviation of the asset’s name (e.g. Bitcoin – BTC).

54. Wallet

A piece of software or hardware which holds private keys that give the user access to his funds.

55. CFD trading

CFD trading is when a broker and a trader sign a contract agreeing to exchange the difference in the value of a cryptocurrency at the end of the contract.

56. Demo trading account

AN account on a trading platform showcasing the user experience and interface where traders can trade fake (worthless) money in the real market conditions.

57. Fiat currencies

Inconvertible currencies made legal by governments (e.g. US dollar, Euro, etc.).

58. ID verification

Verification on the trading platform or similar third party service by personal identification.

59. KYC

Know your customer/client policy implemented usually by trading platforms to be able to trace deposited and withdrawn funds.

60. AML

Anti-money laundering policy also implemented usually by trading platforms in order to prevent illegal practices.

61. Multisig

Multi-signature means that something needs more than one permission to be used.

62. 2FA (two-factor authentification)

A software way of ensuring the safety of a trading account by connecting it with some other device (e.g. smartphone) through an ever-changing series of digits.

63. Private keys

A secret phrase of numbers and letters that allows an owner to access his funds on the blockchain.

64. Market Maker

A person who trades by not taking already placed trade orders but making his own which will be fulfilled in the future (maybe a minute, an hour, or even longer period of time). These individuals usually enjoy lower trading fees.

65. Market Taker

A trader who takes already placed trade orders.

66. Spread

The difference between the highest bid price and the lowest sell price. One of the most important crypto trading terms.

67. Deposits SEPA, Wire transfer

Traditional ways of money transfer. Usually, from a bank to exchange.

68. Proof of Work

PoW is a consensus reaching mechanism on the blockchain-based network used by some of the biggest cryptocurrencies like Bitcoin, Ethereum, etc. Needs a lot of computational power in the form of mining rigs and ASIC miners.

69. Proof of Stake

PoS is a consensus reaching mechanism on the blockchain-based network. Used in various forms by EOS, NEO, etc. Owners stake their coins/tokens in their wallets to secure the network and, in turn, receive rewards in crypto.

70. Volatility

Liability to rapidly change value. Small market caps tends to have greater volatility.

71. Liquidity

The degree to which a cryptocurrency can quickly be bought or sold in the market. The more people trade an asset the more liquid it is.

72. Bull market

A prolonged period of a positive market sentiment when prices tend to rise.

73. Bear market

A prolonged period of a negative market sentiment when prices tend to decline.

74. Market cap

Market capitalization is a number we get when we multiply the number of units of the cryptocurrency present in the open market with the price of a single unit. Represents the “power” of the cryptocurrency.

75. Inflation

A decrease in the purchasing power of the asset caused by new units entering the market. Usually expressed in percentages. Mineable cryptocurrencies have an inflation while pre-mined doesn’t.

76. Hard fork

An event when a single blockchain, through a certain software upgrade, gets split into two and both versions remain relevant in the market. Can happen when a development team behind the project disagrees on the future of the project and decides to go separate ways (e.g. Bitcoin – Bitcoin Cash or Bitcoin ABC – BItcoin SV).

77. Mining

Using hardware to solve mathematical tasks in order to validate transactions on the network in PoW systems and, in turn, receive rewards for the service.

78. Mining Reward

A cryptocurrency reward that’s given to an individual for verifying transactions on the blockchain-based network.

79. Mining Difficulty

A value representing how hard it is to validate a transaction on the blockchain and is determined by an overall hash rate on the network and network’s global mining difficulty.

80. Network fee

A fee paid by an individual for doing transactions on the network. This is usually received by the miners or those who stake their coins or lock them up in a masternode.

The post 80 Crypto Trading Terms You Must Know appeared first on Cryptocointrade.

Source: https://www.cryptocointrade.com/crypto-trading-blog/crypto-trading-terms-glossary/?utm_source=rss&utm_medium=rss&utm_campaign=crypto-trading-terms-glossary

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North America and Europe Control 88% of All Lightning Network Nodes, Research Finds

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As Bitcoin adoption grows more and more, concerns about the need for scalability solutions increase. Lightning Network is the most important layer-two development currently available on the Bitcoin blockchain, and it seems that North Americans are the favorite demographic for this efficiency-focused micropayment solution.

The Lightning Network is a layer-two solution currently under development. It focuses on the creation of channels between peers that allow for almost instant and extremely cheap transactions without the need to record it on the blokchain. The money is locked on a wallet in order for it to be available on the Lightning Network, and once a user needs to have its tokens on the Bitcoin blockchain, the channel is closed and the blockchain registers one transaction from the original wallet to the final one without registering what happened in between.

Graphic representation of how the Lightning Network works. Image: TheBlockPro
Graphic representation of how the Lightning Network works. Image: TheBlockPro

North America and Europe Rule the Lightning Network

According to a report from the University of Vienna, 45% of all Lightning Network nodes run in North America, with a large majority in the United States. Lightning Labs, the leading developer of this scaling solution, is registered in that country. Blockstream, Bitcoin’s largest development company, is registered in Canada.

Europe is the second region on the list, with 43.1% of the world’s nodes. The rest of the nodes are distributed among Asia (6.2%), Oceania (2.2%), with South America and Africa sharing a small fraction of 0.8% and 0.6%, respectively.

The contrast between the number of nodes and the adoption of Bitcoin is remarkable. Latin America has a high adoption rate of Bitcoin, according to data compiled by Chainalysis. However, it has just under 1% of Lightning Network nodes. Africa is also showing a similar picture, with a high volume of trading and adoption, but with little interest in the micro-payment system.

Channels Share Cultural Ties

Another important finding is that Lightning Network has become very popular in large urban centers. Researchers believe that this is mainly due to the better infrastructure and connectivity, which facilitates the operation of the nodes:

We could observe that LND is popular in almost all countries and also showed that within a country nodes form clusters around cities and expand into their metropolitan areas. Also infrastructure plays a significant role in the distribution of nodes within a continent or country.

They also realized that many of the nodes open channels with peers who speak the same language or have similar cultures. For example, 80% of Argentina’s payment channels are shared with Uruguay, 10% with Peru, and about 4% with Chile and Venezuela.

Most of the nodes are from large cities in Europe and North America. Image: University of Vienna
Most of the nodes are from large cities in Europe and North America. Image: University of Vienna

A similar cultural phenomenon happens in other latitudes: Kenya, for example, shares more than 70% of its channels with South Africa, while China has to share channels with Taiwan and Hong Kong, Croatia with Czechia and Bulgaria and Mexico with Colombia, Chile, Puerto Rico and Argentina.

Ethereum Grows Faster Than The Lightning Newtork

Despite being overshadowed by the DeFi hype, Lightning Network continues to grow steadily. According to data from the Lightning Network tracking site 1ML, there are currently over 14200 Lightning Network nodes in operation. The network has a capacity of over 1039 BTC.

Some of the Real-Time statistics of Bitcoin's Lightning Network. Image: 1ML
Some of the Real-Time statistics of Bitcoin’s Lightning Network. Image: 1ML

However, these statistics were recently exceeded by a somewhat heterodox solution: The number of synthetic Bitcoin tokens running on the Ethereum network already exceeded the total value of tokens moving on the Lightning Network.

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Source: https://cryptopotato.com/lightning-network-popular-north-america-europe/

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Beware: Latest Ledger Email Phishing Scam Making The Rounds

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Consumers who have purchased Ledger hardware wallets have been waking up to nasty emails claiming that their crypto assets are in danger of being stolen. It is the latest in a long list of phishing attacks designed to lure the uninitiated into divulging their secret phrases or downloading malware.

The first round of spurious emails was asking for the 24-word recovery phrase and Ledger responded with a warning emailed to customers confirming that it would never ask for this.

The second round of emails is a little more insidious as they claim that a data breach on Ledger servers has affected the wallet associated with the target email account. It asks users to download the latest version of Ledger Live, via an email embedded link, and reset their PIN numbers.

It was reported that Ledger did suffer a data breach in July resulting in 9,500 users having their personal information compromised.

Ledger scam email

Sneaky Social Engineering

On initial glance, the email looks genuine but there are a number of key giveaways that are easy to spot for the trained eye. Firstly, the domain name is not from ledger.com but legder.com

Secondly, hovering over the link in the box (but being careful not to click it) reveals a dodgy URL; http://url9594.legder.com which is likely to result in the downloading of malware which may be able to log keystrokes, steal credentials, or mine cryptocurrency.

Crypto investors and traders have already taken to twitter to share this phishing scam and warn others about it;

Additionally, Ledger itself has published a list confirming knowledge of these phishing attempts and reinforcing the premise that funds are safe providing the recovery phrase is;

The company stated that nobody, including Ledger, should ever ask for the PIN number of recovery phrase, but this latest email was a call to action prompting the clicking of a malicious link.

Risk Mitigation

Hardware wallets, such as those produced by Ledger or Trezor, take an extra step to mitigate these risks. Ledger stated that crypto assets cannot be sent from a Ledger device unless the user physically connects it to the computer and verifies the transaction on both the computer and the device.

If malware is controlling the PC or smartphone, it cannot control the Ledger wallet, even when it is plugged into the computer.

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Source: https://cryptopotato.com/beware-latest-ledger-email-phishing-scam-making-the-rounds/

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After The Storm: Bitcoin Holds $13K Despite Wall Street Monday’s Plunge

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Despite a brief price slump to $12,800, Bitcoin has perhaps indicated signs of decoupling from the stock markets. Wall Street bled out rather viciously yesterday, while BTC has risen above $13,000 again.

Bitcoin Decouples From Stocks?

During the past several weeks, Bitcoin’s price performance has resembled that of the US stock markets. For example, when news broke out that US President Donald Trump tested positive for the COVID-19 virus, both asset groups tanked. Shortly after, when Trump left the hospital, BTC, and the stock market surged.

However, Bitcoin displayed a few yearly signs of decoupling last week. The three most prominent US-based stock indexes, namely the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average, lost value, while BTC went on an impressive roll, resulting in a fresh yearly high of above $13,350.

Yesterday’s trading session was also quite negative for Wall Street. The growing COVID-19 confirmed cases and concerns regarding the new US stimulus brought massive drops. The S&P 500 and Nasdaq declined by nearly 2%, while the Dow closed with a 2.3% decrease.

Initially, Bitcoin also followed the adverse performance. BTC was trading high above $13,200, but it vigorously tanked to its daily low of about $12,800. However, the primary cryptocurrency has recovered most of its losses since then and trades closely to $13,100.

btcusdt_char
BTC/USDT. Source: TradingView

Red Dominates The Altcoin Market

On a 24-hour scale, most altcoins have lost significant chunks of value. Ethereum has dived by 3% and trades well below $400. Just a few days ago, ETH touched $420.

Ripple (-1.8%) has dipped beneath $0.25. Bitcoin Cash (-3.1%), Chainlink (-4.6%), Cardano (-1.5%), and Litecoin (-2%) are all in the red from the top 10.

There’re two obvious exceptions – Binance Coin and Polkadot. BNB has jumped by over 1% to $31.26, while DOT has surged by 9% to $4.7.

heatmap
Cryptocurrency Market Heatmap. Source: Quantify Crypto

Further losses are evident from lower and mid-cap altcoins. Quant leads the way with a 13% decrease. Reserve Rights (-10.3%), HedgeTrade (-10%), CyberVein (-10%), Elrond (-9%), and Ampleforth (-8.5%) follow.

Nevertheless, a few coins are deep in green as well. Kusama is the most impressive gainer with a 26% surge, Ocean Protocol (14%), and Velas (9%) are next.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/after-the-storm-bitcoin-holds-13k-despite-wall-street-mondays-plunge/

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