Know Your Customer (KYC) is a mandatory procedure for financial institutions, exchanges, and betting companies to identify users.
Cryptocurrency is a digital or virtual form of money that uses cryptography to ensure security and control the creation of new units. It operates based on blockchain technology, which allows for secure storage and transfer of digital assets without intermediaries such as banks or governments. Cryptocurrencies have gained popularity as an alternative means of storing and transferring funds, as well as an investment instrument.
Blockchain is a digital technology that allows for the creation of a sequential list of data (blocks) stored on different computers (nodes) within a network. These blocks are linked together using cryptography, ensuring the security and immutability of the data without the consent of all network participants. Blockchain is used to store cryptocurrency transactions and other digital data, providing trust and transparency among system participants.
Mining in cryptocurrency is the process of processing and confirming transactions on the blockchain.
Miners (individuals or computers) solve complex mathematical problems to confirm transactions and create new blocks of information. In return for their work, miners receive rewards in the form of the cryptocurrency being mined. Mining helps ensure the security of the network and the storage of transaction history.
Cryptography is the science of securing information and data by applying mathematical algorithms that transform text or data into unintelligible forms, understandable only to those with the corresponding key or password. It is used to ensure confidentiality, integrity, and authentication of information in networks and systems.
Transaction is the exchange or transfer of digital assets (money, cryptocurrency, data, etc.) between participants within a system.
Decentralization in cryptocurrency is the principle where the control and management of transactions and ownership of digital assets (such as cryptocurrencies) are distributed among multiple participants within the network, rather than being concentrated in a single central authority or government. All transactions and records are stored on various computers (nodes) in the network, which ensures greater security, reliability, and the absence of centralized control.
Cryptocurrency Mixing, also known as Coin Mixing or Coin Tumbling, is the process by which anonymity and untraceability of cryptocurrency transactions are achieved. It is done by mixing funds from different sources and distributing them to various addresses or outputs. Mixing complicates the tracking of the origin of funds, allowing users to enhance the level of privacy and confidentiality in their financial transactions.
Altcoin (or alternative cryptocurrency) is any cryptocurrency that is not Bitcoin.
The term "
Ticker" refers to a short name given to a project for identification purposes. In the context of cryptocurrencies, it is most commonly used as the name of the token.
BTC is the abbreviation for "
Bitcoin" - the first and most well-known cryptocurrency, created in 2009. It is based on blockchain technology and allows users to conduct secure and anonymous transactions without the involvement of banks or governments. Bitcoin is used as a medium of exchange, an investment instrument, and a store of value. Its symbol is "
₿".
Token is a digital asset or symbol that can represent various values, rights, and functions within blockchain systems.
- An example of a token on the Ethereum platform is DAI.
- DAI is a stable cryptocurrency pegged to the US Dollar. It allows users to store and transfer value on the Ethereum network without significant fluctuations in its price, ensuring stability and reliability.
Ethereum is a decentralized platform for creating and executing smart contracts and decentralized applications (DApps). It is based on blockchain technology and enables developers to build and run programs on a distributed network environment.
Exchange is a platform where various assets such as stocks, cryptocurrencies, commodities, and currencies can be bought and sold. Trading operations take place between buyers and sellers at specific prices on the exchange. This allows investors and traders to exchange assets for profit or wealth preservation. Some well-known exchanges are:
- Binance
- Coinbase
- Kraken
- Bitfinex
- Huobi
Liquidity is a measure of how easily and quickly an asset (such as cryptocurrency, stocks, commodities) can be bought or sold without significantly impacting its price. High liquidity means there is sufficient demand and supply in the market to execute trading operations without significant price changes. Low liquidity can make it challenging to execute trades and may increase the asset's price volatility.
Demand is the quantity of a commodity or asset that people or investors are willing to buy in the market at a certain price.
Supply is the quantity of a commodity or asset that sellers or owners are willing to sell in the market at a certain price.
Quote:These two factors - demand and supply - determine the market price of a commodity or asset. When demand exceeds supply, prices tend to rise, and vice versa, when supply exceeds demand, prices tend to fall.
Volatility is a measure of the price or value fluctuations of an asset over a specific period. High volatility indicates that the price changes rapidly and significantly, whereas low volatility suggests smaller price fluctuations.
Margin, in the context of cryptocurrency trading, refers to the practice of borrowing funds from a broker or exchange to increase the size of a trader's position. Traders can use margin to access larger trading positions than they could with their own capital alone, potentially amplifying both profits and losses. Margin trading involves putting up a certain percentage of the total trade value as collateral, known as the margin, while the rest is borrowed from the exchange or broker. It is important to note that trading on margin carries higher risk due to the potential for significant losses if the market moves against the trader's position.
Isolated Margin is a margin collateral in which a limited (allocated by you) amount of margin is used.
Cross Margin is a margin collateral in which the entire futures deposit is used.
Liquidation is the forced closure of a position with the loss of funds from the futures deposit (in the case of Cross Margin) and the loss of the allocated margin for the trade (in the case of Isolated Margin).
ADL (Auto-Deleveraging) is a liquidation method that occurs only when the exchange's insurance fund becomes insufficient to cover the losses from liquidated positions. In this scenario, the exchange automatically deleverages profitable traders' positions, transferring their losses to the counterparties with the highest leveraged positions. This process helps to maintain the stability and integrity of the market, especially during extreme price movements or unexpected market events.
Funding is the regular payments made between buyers and sellers (every 8 hours) based on the prevailing interest rate to regulate the demand and supply between the spot and futures markets. These funding payments ensure that the price of the futures contract remains close to the underlying asset's spot price.
PNL stands for "Profit and Loss," and it refers to a report that shows your realized or unrealized profits or losses from trading or investing activities. This report provides an overview of how your investments or trades have performed over a specific period. Positive PNL indicates a profit, while negative PNL indicates a loss. It is an essential metric for evaluating the success and performance of your trading or investment strategies.
Last Price is the cost of the most recent transaction executed for a particular contract or asset, taken from the order book (also known as the order book "depth" or "level 2 data"). It represents the price at which the most recent trade occurred in the market. Traders and investors often use the last price as a reference point to gauge the current market sentiment and price direction. It is one of the essential pieces of information displayed in real-time on financial platforms and trading interfaces.
Mark Price is the price calculated based on the average price of the asset from several major spot exchanges. It is commonly used in cryptocurrency and other derivative markets to assess the current value of assets and determine margin requirements.
USDT stands for "
Tether," which is a stablecoin or cryptocurrency that is pegged to a currency, such as the US Dollar.
- One USDT is approximately equivalent to one US Dollar.
Fiat in cryptocurrency refers to the term used to denote traditional national currencies such as the US Dollar, Euro, Yuan, and so on, which can be used to purchase or exchange for cryptocurrencies on cryptocurrency exchanges.
Spot Market is a market where assets are bought and sold at the current price for immediate delivery, and transactions are settled instantly. In other words, deals are executed "on the spot" or without delay.
P2P market (Peer-to-Peer) in cryptocurrency is a market where users can exchange cryptocurrencies or engage in trading directly with each other, without the involvement of a centralized exchange. This allows users to conduct secure and direct transactions, avoiding additional fees and limitations that may be associated with centralized platforms. P2P markets provide users with more control over their operations and enable direct interactions with other participants.
Futures Market is a market where agreements are made to buy or sell a future contract for an asset at a specific price and on a defined date. For example:
- Buy BTC at $10,000 and sell at $60,000
- Profit will be $50,000
Leverage in futures – is a financial instrument that allows traders to control a position with a greater value than they have in their account. With the help of leverage, a trader can borrow a portion of funds from the exchange to increase their potential gains (and losses). For example, if a trader has $100 and uses 1:10 leverage, they can control a position worth $1000. In this case, a 1% price movement during this time will affect their account by 10%. Leverage allows increasing potential profits, but it also increases the risk of losses.
Long means that a trader buys a cryptocurrency in anticipation of its price rising. In other words, they expect the price to increase and plan to sell it later at a higher price, making a profit.
Short means that a trader sells a cryptocurrency they do not own, expecting its price to decrease. In this case, they anticipate the price to fall, and they plan to buy it back later at a lower price, making a profit on the price difference.
Bull market is a market condition where cryptocurrency prices (or other assets) are rising significantly over an extended period of time. It is characterized by optimism and investor confidence, with expectations of further price increases.
Bulls - buyers. In the financial markets, "Bulls" refer to investors who have a positive outlook on an asset's price or the overall market. They believe that prices will rise in the future and are optimistic about the potential for profits. The term "bullish" is used to describe a market sentiment that is characterized by increasing prices.
On the other hand, a
bear market is a market condition where cryptocurrency prices are falling significantly over an extended period of time. It is characterized by pessimism and a lack of investor confidence, with expectations of further price declines.
Buy order is an instruction given by a trader to a cryptocurrency exchange to purchase a specific amount of a cryptocurrency at a designated price or better. It will be executed when the market reaches or goes below the specified price.
Sell order is an instruction given by a trader to a cryptocurrency exchange to sell a specific amount of a cryptocurrency at a designated price or better. It will be executed when the market reaches or goes above the specified price.
Limit order is a type of order where a trader specifies the price at which they are willing to buy or sell a cryptocurrency. It remains on the exchange until the specified price is reached, and the order is executed at that price or better.
Market order is an order to buy or sell a cryptocurrency at the best available price in the market. It is executed immediately, and the trader accepts the prevailing market price.
Order book (or "exchange order book") is a list of limit orders present in the market at the current moment. It provides a real-time display of buy and sell orders for a particular trading pair on an exchange, showing the prices and quantities at which traders are willing to buy and sell the asset.
Maker refers to traders who work with limit orders. They add liquidity to the exchange by placing orders that are not immediately matched with existing orders in the order book. These limit orders sit on the order book until they are filled by "
taker" orders (orders that are matched with existing orders on the book). Makers typically provide liquidity to the market and help ensure that there are enough orders available for other traders to execute against. In return for adding liquidity, some exchanges may offer lower fees or other incentives to makers.
Stop Loss is a risk management tool used in cryptocurrency trading (and other financial markets) to limit potential losses. It is a predefined order placed by a trader to sell a cryptocurrency when its price reaches a certain level below the current market price. The purpose of a Stop Loss is to prevent further losses and automatically exit the trade if the price moves unfavorably. It helps traders protect their capital and minimize potential risks associated with price fluctuations.
Take Profit is another risk management tool used in cryptocurrency trading (and other financial markets) to secure profits. It is a predefined order placed by a trader to sell a cryptocurrency when its price reaches a certain level above the current market price. The purpose of a Take Profit order is to lock in gains and automatically close the trade at a favorable price point. It helps traders capitalize on price movements and ensures they don't miss out on potential profits by staying in the trade for too long.
Trailing Stop Order is an order type used to close a position with either a profit or a minimal loss in case of a price reversal. It is designed to protect gains and limit potential losses as the price of an asset moves in a favorable direction. The trailing stop order is dynamic and adjusts according to the price movement, trailing the price by a certain distance or percentage.
OCO (One-Cancels-the-Other) order is a type of order that involves two linked orders: a stop-limit order and a take-profit order. When one of the orders is executed, the other order is automatically canceled. This type of order is useful for managing risk and potential profit in a trade.
Indicator in the context of cryptocurrency trading refers to a mathematical calculation or graphical representation based on historical price and volume data. It is used to analyze market trends, identify potential entry and exit points for trades, and to gain insights into market sentiment. Indicators help traders make informed decisions by providing visual or numerical cues about the current and past market conditions. Examples of indicators include Moving Averages, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Bollinger Bands.
Technical Analysis is a method used in cryptocurrency trading (and other financial markets) to evaluate past market data, such as price and volume, to forecast future price movements. It involves studying charts, patterns, and various technical indicators to identify trends and potential trading opportunities. Traders who use technical analysis believe that historical price patterns and market behavior can provide insights into the future direction of asset prices. It is mainly focused on analyzing the price action and does not consider the intrinsic value of the asset.
TradingView is a web-based service for technical analysis of trading charts.
Timeframe (TF) is the time interval within which one candle is formed on a price chart.
Paper Trading, also known as "trading on paper," is a tool used to test a trading system or strategy without risking real money. It is a form of simulated trading where traders can practice executing trades, monitor performance, and assess the effectiveness of their strategies in a risk-free environment.
Trend - the primary market direction.
Sideways Movement or Sideways Trend - refers to the price movement of an asset within a limited or narrow range without showing a clear upward or downward direction. In this type of market, the price moves predominantly horizontally, indicating a lack of strong bullish or bearish sentiment. Traders often refer to it as a period of consolidation or ranging, where the asset's price remains relatively stable, typically between support and resistance levels.
High (also known as "High Price") - the maximum price level.
Low (also known as "Low Price") - the minimum price level.
HTF (Higher Time Frame) - refers to the longer time frame in the context of analyzing price charts. Traders often use multiple time frames to gain a better understanding of market trends and price movements. The higher time frame typically shows a broader view of the market, while the lower time frame provides more detailed information. By analyzing both higher and lower time frames, traders can make more informed trading decisions and identify potential trading opportunities.
LTF (Lower Time Frame) - refers to the shorter time frame in the context of analyzing price charts.
Fibonacci Numbers - are elements of a numerical sequence in which the first two numbers are 0 and 1, and each subsequent number is the sum of the two preceding numbers. The Fibonacci sequence begins as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on. This sequence has various mathematical properties and is found in various natural phenomena, art, and financial markets, where it is used in technical analysis to identify potential support and resistance levels.
ОТЕ (Optimal Trade Entry) - is a zone that specifies the corrective movement within a trend. It refers to a price level or region that traders consider as an optimal entry point to open a position in the direction of the prevailing trend.
Swing High - refers to a structural peak or a local maximum in a price chart. It is a term used in technical analysis to identify a point where the price reaches a high, followed by a decline, and then by another high that is lower than the previous one. Swing highs are often used by traders to identify potential resistance levels and to analyze price patterns, such as "
lower highs" in a downtrend or "higher highs" in an uptrend. They play a crucial role in understanding market dynamics and making trading decisions.
Price Action (PA) - is a method of analysis based on studying the price chart using candlestick formations. It involves analyzing the raw price movement of an asset without relying on traditional technical indicators. Traders who use price action look for specific candlestick patterns, chart patterns, and key support and resistance levels to make trading decisions.
Bullish Candle - is a candlestick that indicates an upward price movement. It typically has a closing price higher than its opening price, suggesting that buyers have been more active than sellers during the time period represented by the candle.
Bearish Candle - is a candlestick that indicates a downward price movement. It usually has a closing price lower than its opening price, indicating that sellers have been more dominant than buyers during the time period represented by the candle.
Candlestick Formation - a graphical pattern of several candlesticks on a price chart that indicates the market sentiment. Each candlestick formation has unique characteristics and can signal different trading patterns, such as trend reversals, trend continuations, or indications of a neutral market.
Patterns - graphical formations observed on a price chart in the form of shapes that indicate the market sentiment. Some popular patterns include various formations such as "head and shoulders," "double bottom," and "triple bottom" in a bullish context, or "head and shoulders reversed," "double top," and "triple top" in a bearish context.
Risk Management - the process of making and executing managerial decisions aimed at reducing the probability of unfavorable outcomes and minimizing potential losses resulting from their realization. In trading, "R" is used to denote the potential risk.
Discipline - strict and precise adherence to rules established by an individual for execution.
RR - Risk to Reward - represents the ratio of risk to potential profit in a trade. For example, RR 1:5 means that a trader is risking 1 to potentially make 5.
R - a conditional unit representing the amount a trader is risking in a trade.
Win Rate - a measure of a trader's success, expressed as a percentage.
PFP (Profile Picture) - NFT used as an avatar in platforms like Twitter, Discord, Telegram, featuring various images such as punks, monkeys, and more.
Looks Rare (Rare) - rarity that increases the value of an NFT.
Holding, in the context of cryptocurrency, refers to the act of owning and retaining a cryptocurrency for an extended period without actively trading or selling it. Investors who "HODL" (a term derived from a misspelling of "hold") believe in the long-term potential of the cryptocurrency and are not concerned with short-term price fluctuations. The strategy is based on the belief that the cryptocurrency's value will increase over time, and investors aim to profit from its long-term growth rather than making frequent trades.
Hedging is a tool that allows reducing risks by trading in different markets. These risks are taken on by speculators - those who buy and sell futures contracts and other derivative assets.
Cold Wallet is a method of storing cryptocurrency where the private keys (access keys) are kept in an offline environment not connected to the internet. This provides a higher level of security, since hacking into such a wallet from the network is much more challenging. A cold wallet can be a physical device (e.g., hardware wallet) or store private keys in a paper or other offline format.
Hot Wallet is a cryptocurrency wallet that is connected to the internet and readily accessible for quick access to the cryptocurrency. It is convenient for frequent use and fast transactions, but it can be less secure since hacking into such a wallet from the internet is more feasible.
Minting - the process of creating an NFT token. The best example is when a project launches a new NFT collection to develop its ecosystem. Participants visit the project's website, connect their wallet with the required amount of funds for minting the NFT, and pay a transaction fee. When the trading opens, it allows creating the token for money.
Reveal - the process of revealing the actual image of an NFT. During the launch of a collection, participants often receive a blurry image that is revealed after a certain time. After the reveal, they can see the characteristics and rarity of their NFT.
Flip - buying an NFT with the intention of reselling it later. In simpler terms, it is regular speculation. People look for NFTs at a lower price and sell them at a slightly higher price.
Floor Price - the lowest price point of an NFT collection. By tracking this information, one can monitor the interest dynamics in the collection.
JPGs - NFTs that can be in the form of JPG, PNG, GIF, audio/video files, or computer games.
Delist - the process of removing an NFT from a marketplace.
Roadmap - a set of actions that an NFT project plans to undertake to increase the value of the community.
Gas War - a sharp increase in gas (transaction fee) costs in the Ethereum network when a massive project enters the market, and everyone wants to participate. To take part in such projects, transactions need to be carried out from their wallets, which increases network load and transaction fees.
DYOR (Do Your Own Research) - conducting individual research on a project. A person who includes this disclaimer takes responsibility for their advice.
