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Introduction
Knowing the terms of cryptocurrency trading is essential for anyone who wants to enter the crypto trading market. Because you will encounter these terms in all educational articles, technical and fundamental analyses, crypto news, etc. Given the importance of this issue, in the rest of this article we will examine some of the most commonly used cryptocurrency trading terms in this field.
Basic and basic terms of cryptocurrency trading
First, we will start by introducing trading terminology with some basic things.
Fear of missing out (FOMO)
FOMO, or Fear of Missing Out, is a term that, as the name suggests, refers to the fear of being left behind. In the crypto trading community, we call it an irrational and sometimes unfounded fear of missing out on profitable opportunities.
FUD (FUD)
FUD is an acronym for Fear, Uncertainty, and Doubt. FUD is a term used to describe the pessimistic views of traders and investors regarding financial markets. For example, sometimes negative news is published that is not accurately and reliably supported, but can still manipulate market sentiment and even cause prices to fall.
Bull Market
Another cryptocurrency trading modification that may have a confusing name is a “bull market.” A bull market is a situation in which stock prices are rising and the market is growing. Bull markets usually occur when the price of major cryptocurrencies such as Bitcoin or Ethereum is trending upward.
You may have heard the term “plowmen” in Forex , but these terms are not related to each other. Plowmen are people who want to conquer the trading market solely with the help of algorithms and technical analysis!
Bear Market
If prices fall by at least 20% for three consecutive months, the market is called a “bear market.” During this period, supply increases and, just like traditional financial markets, the stock market declines.
Pump & Dump
Pump and Dump in cryptocurrency is a strategy used to manipulate the market. A “pump” is a situation in which the value of a cryptocurrency is artificially increased in the market. This causes many investors to be deceived and buy this currency. Then, in the “dump” phase, the price of the currency falls. In order for the pump and dump strategy to work, FOMO and FUD are usually awakened in investors.
Market value (Market Cap)
Market Capitalization is another common cryptocurrency trading term. Market capitalization is the total value of a particular cryptocurrency’s tokens in the market. This is calculated by multiplying the total number of tokens in existence for that currency by the price of one of its tokens.
Liquidity
What does liquidity mean? What is a liquidity provider? The better and higher the liquidity of a cryptocurrency, the less its value and price will change if we want to convert it to another cryptocurrency or to cash.
Market Order
In cryptocurrency trading terms, a market order means placing an order to buy or sell a cryptocurrency at the best current market price. This method is one of the fastest ways to buy or sell and is finalized immediately after being placed.
Limit Order
A limit order, in basic cryptocurrency terminology, is the opposite of a market order. Your order will not be finalized until the currency in question reaches a specific price.
Highest Price Level (ATH)
All-Time High means the highest price a cryptocurrency has reached since its inception.
Lowest Price Level (ATL)
In trading terms, an all-time low is the lowest price a cryptocurrency has reached throughout its trading history.
Familiarity with specialized cryptocurrency trading terminology
Now, let’s look at some examples of cryptocurrency trading terms that are specific to this financial market and are of great importance.
Order Book
An order book in cryptocurrency trading generally refers to a list of orders to buy and sell a particular currency. The order book shows the price that buyers and sellers are willing to pay. It also shows the volume of orders and other details related to them.
Stop Loss
By setting a stop loss, we determine how low the token price will fall before the trade is closed to prevent further losses.
OCO order
OCO orders in trading terms are a type of conditional order where the execution of one cancels the other. This method is used for risk management purposes.
Leverage
What is leverage? Leverage is one of the first questions every new trader asks. Leverage is a tool that helps investors enter into a trade with a larger amount than their actual assets. In this way, you can enter into a large position by paying a small portion of the total value of the trade.
Margin
Margin trading means borrowing money from brokers. In these transactions, you borrow an amount from a broker or exchange and thereby increase the volume of the transaction. The ratio between the amount you can borrow and the amount you have on hand is called leverage. Don’t forget to review the margin trading tutorial on Binance and other exchanges before entering them.
Indicator
Indicators are mathematical calculations that are performed on the price or value of a cryptocurrency. These calculations are used to identify trends, measure volatility, and provide reliable signals for trading.
Oscillator
An oscillator is a technical analysis tool that helps traders better understand market conditions.
Final summary
In this article from Farhad Moghadam Salimi’s Crypto School, we learned about cryptocurrency trading terms. Please note that the explanations provided are brief and useful. If you want to complete your knowledge in this field, you need to continue reading further.
