Crypto Trader's Glossary

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Exchange

An exchange is a virtual marketplace where people trade different types of investments, such as Bitcoin, Ethereum and other crypto-currencies. Example: Binance

Peer-to-peer exchange

A peer-to-peer exchange is a service that allows individuals to trade their assets with others without the involvement of third party processing. Example: Bisq

Broker

A broker is a person who allows his customers to trade investments, in exchange for a set price.

What is social trading?

Social trading is the act of interacting and sharing trading ideas with other individuals on a trading network. Example: Wunderbit Trading

What is mirror trading / shadow trading?

Mirror trading is a strategy, in which an individual replicates the trades of a more experienced trader.

What is copy trading?

Copy trading is the act of copying the actions of another trader, which in turn allows the individual to replicate the trader's performance.

What is technical analysis?

Technical analysis is a trading strategy that utilizes the analysis of current charts and their patterns in order to predict the future growth of an asset's price.

What is fundamental analysis?

Fundamental analysis is a trading strategy in which one examines and analyses a wide range of data in order to determine the long-term viability and value of an asset. Read more: Investopedia on Fundamental Analysis

What is trading strategy?

A trading strategy aims to achieve the most profitable results when buying or selling trade-able assets.

Bid price

Bid is the price a buyer is willing to pay for the seller's assets.

Ask price

Ask is the price the seller is willing to accept for their assets.

Bid-Ask Spread

A bid-ask spread is the difference between the bid price and the ask price.

Bull Market

A bull market is the state of the market in which its share prices are expected to rise.

Bear Market

A bear market is the state of the market in which its share prices are expected to fall.

Good 'Til Cancelled Order

A good 'til cancelled order is an order that will be executed when the asset reaches your set price. The order will remain active until you cancel it yourself.

Day Order

A day order is an order that expires at the end of the day if the set price is not reached.

Volatility

Volatility measures by how much an asset's value has changed over time.

Liquidity

Liquidity measures how quickly an asset can be bought or sold.

Trading Volume

Trading volume is the number of assets being traded each day.

Going Long

Going long is the intention of selling an asset at a higher price in the future.

Averaging Down

Averaging down is the act of buying an asset as it's price drops.

Market Capitalization

Market capitalization is how valuable a company is to the market. 

Public Float

Public float is the number of a company's shares that are held by public investors. 

Authorized Shares

Authorized shares are the highest number of shares that a company can distribute.

IPO

IPO, or initial public offering, is the first-time sale of a company's shares to the public.

Secondary Offering

A secondary offering is the sale of new shares to the public with the intention of raising money after it has made an IPO.

Blue Chip Stocks

Blue chip stocks are the shares of reputable, well-established and financially stable companies.

Forex

Forex is the market in which foreign currencies are exchanged.

Hedge Funds and Mutual Funds

Both hedge funds and mutual funds are types of investments that collect money from investors with the intention of quickly multiplying it.

ETF

An ETF - or "exchange-traded fund" - is a collection of securities that track an index and can be traded on exchanges.

ADRs

ADRs - or "American depositary receipts" - are securities of a foreign company that trades in the U.S. 

Beta

The beta is the sensitivity of a stock to the market's movements.

Day Trading

Day trading is the act of trading multiple times within the same day in an attempt to profit from small changes in a market.

Dividend

A dividend is a sum of money earned by a company that is distributed to its shareholders.

Execution

An execution is the completion of an order.

Margin

Margin is the money that an investor has borrowed from a broker in order to purchase an investment.

Moving Average

A moving average the average price of a stock over a certain period of time.

Portfolio

A portfolio is the collection of assets an investor holds.

Quote

A quote is the latest trading price of a stock.

Rally

A rally is an increase in the price of a stock.

Sector

A sector is a set of businesses that operate in the same industry.

Stock Symbol

A stock symbol is a set of letters assigned to a company on a stock exchange.

Yield

The yield is the amount of money received after an investment as well as the interest earned. 

Fiat

Fiat is a currency that is issued by the government.

Sell Wall

A sell wall is a large number of sell orders at a specific price.

Buy Wall

A buy wall is a large number of buy orders at a specific price.

Resistance

Resistance is the expectation of an asset's price rise to stop due to a decrease in demand, followed by the decline of the asset's price. 

Support

Support is the expectation of an asset's price decline to stop due to an increase in demand, followed by the rise of the asset's price. 

Blockchain

Blockchain is a decentralized system that is linked together using a network of computers. It’s goal is to maintain a public record of transactions made using a cryptocurrency.

Node

A node is a computer that is connected to a blockchain network and is used to maintain it.  

Hot Storage

Hot storage is a type of cryptocurrency wallet that is used online.

Cold Storage

Cold storage is a type of cryptocurrency wallet that is not connected to the internet.

Software Wallet

A software wallet is a software program in which cryptocurrency is stored.

Hardware Wallet

A hardware wallet is a hardware device that stores the individual's cryptocurrency private keys. 

Trading: Types of order to know

Limit order

A limit order is an order on an exchange that allows a trade to be executed only at a certain price or above it. 

Market order

A market order is an order on an exchange that executes the transaction immediately at the current best price.

Trailing stop order

A trailing stop is an order that is set at a certain percentage below the current market price.

Iceberg order

An iceberg is a large single order that has been split up into smaller orders with the intent of hiding the total number of assets.

Stop Limit (aka trigger order)

A stop-limit order is executed at a specified price point after it has reached a certain stop price.

Trail order 

A trail order allows the execution of trades based on the market's predefined swings.

TWAP order

A TWAP order - or a "time-weighted average price" order - is a strategy in which trades are executed evenly over a specified time period. 

VWAP order

A VWAP order - or a "volume weighted average price" order - is a strategy that utilizes a schedule to plan the execution of a larger order while at the same time avoiding unnecessary impact on the market price. 

Trading strategies

Bollinger bands

Bollinger Bands is an analysis tool that uses a price margin to define if a crypto-currency is excessively bought or sold.

Ichimoku clouds

The Ichimoku Cloud is an analysis tool that uses indicators to show a price trend's support and resistance levels, direction and momentum.

Elliott waves

The Elliott wave principle is an analysis tool that uses price dips and rises, as well as investors' psychology to predict future market trends.

Price action

Price action is the movement of a stock over a specific time period.

Trading chaos

Trading chaos is a strategy that uses indicators that act as averages which are used to notify the trader of the presence of a trending market or a market range. 

Keltner channel

A Keltner Channel is an analysis tool that uses indicators, or bands, to follow the expansion and contraction of volatility.