Below are commonly-used trading terms in crypto and traditional markets. Each term includes a brief definition to help users understand core concepts quickly.
- Altcoin
- Any cryptocurrency other than Bitcoin.
- Ask Price
- The lowest price a seller is willing to accept
- Arbitrage
- Profiting from price differences across markets
- Bear Market
- A market trend where prices are falling
- Bid Price
- The highest price a buyer will pay
- Bid-Ask Spread
- The difference between bid and ask prices.
- Block
- A set of transactions recorded on a blockchain.
- Blockchain
- Decentralized ledger of linked blocks.
- Bull Market
- Market trend with rising prices.
- Crypto Commodity
- A token representing a commodity or backed asset.
- Consensus
- Protocol for agreeing on a blockchain's state.
- DeFi
- Decentralized finance services on public blockchains.
- Exchange
- Platform to buy, sell, or trade crypto assets.
- Fibonacci Strategy
- Trading approach based on Fibonacci retracement levels.
- Fill or Kill (FOK)
- An order executed immediately in full or cancelled.
- HODL
- Hold crypto long-term; acronym for "hold on for dear life".
- Limit Order
- Order to buy or sell at a specified price.
- Leverage
- Using borrowed funds to increase trade size.
- Liquidity
- Ease of buying or selling without affecting price.
- Market Order
- Order executed immediately at current market price.
- Market Maker
- An entity providing liquidity via continuous buy/sell orders.
- Market Taker
- An entity that consumes existing liquidity via market orders.
- Momentum
- Indicator of price trend strength or speed.
- Mempool
- Pool of unconfirmed blockchain transactions.
- Perpetual Futures
- Derivative contracts without expiry, settled continuously.
- Pump and Dump
- Fraudulent scheme inflating price then selling off.
- Slippage
- Difference between expected and executed trade price.
- Smart Contract
- Self-executing contract stored on a blockchain.
- Stablecoin
- Cryptocurrency pegged to fiat or other assets.
- Swing Trading
- Short-term trades held over days/weeks to capture gains.
- Token
- Digital asset created on a blockchain.
- Volatility
- Measure of price variation intensity.
- VWAP
- Volume-Weighted Average Price indicator.
- Wallet
- Tool for storing public/private crypto keys.
- Whale
- A trader or entity holding large amounts of crypto.
- Whitepaper
- Formal documentation describing a crypto project.
- Activity Risk
- Risk due to operational errors or system issues.
- Algorithmic Trading
- Automated trading using preprogrammed strategies.
- Annualized Return
- Yearly percentage gain based on investment performance.
- Anti-Money Laundering (AML)
- Regulations to prevent illicit financial flows.
- Arbitrage Bot
- A bot executing arbitrage opportunities automatically.
- At-the-Money (ATM)
- An option whose strike price is equal to the underlying asset.
- Auction Market
- Market where prices are determined through bidding.
- Backfill
- Historical data used to fill missing records.
- Bar
- A visual representation in charting, showing OHLC data.
- Basis Point (bps)
- One one-hundredth of a percent (0.01%).
- Beta
- Measure of an asset’s volatility relative to the market.
- Blockchain Explorer
- Tool for viewing on-chain transaction data.
- Breakout
- Price moves beyond resistance or support level.
- Broker
- Entity that facilitates buy/sell orders to the market.
- Brute Force Attack
- Cycling through many guesses to breach credentials.
- Carry Trade
- Strategy exploiting rate differentials between currencies.
- CFD
- Contract For Difference, derivative allowing trading on price changes.
- Centralized Exchange (CEX)
- Platform like Binance managing custodied assets.
- Certificate of Deposit (CD)
- Time-bound bank deposit with fixed return.
- Chart Pattern
- Observable formation in price charts used for analysis.
- Clearing
- Settlement process post-trade between parties.
- Cone of Uncertainty
- Range projecting potential future price paths.
- Correlation
- Statistical measure of how two assets move together.
- Cross-Exchange Bot
- A bot trading across multiple exchanges simultaneously.
- Dark Pool
- Private trading venue with hidden orders.
- Day Trading
- Opening and closing positions within a single day.
- Dead Cat Bounce
- Temporary price rise after steep decline.
- Decentralized Exchange (DEX)
- Non-custodial on-chain exchange.
- Derivative
- Financial instrument deriving value from an underlying asset.
- Diffusion
- Spread of price changes gradually across markets.
- Discount Rate
- Interest rate used to present-value future cash flows.
- Drawdown
- Peak-to-trough decline in an investment account.
- Dummy Order
- Test order executed to verify system connectivity.
- Efficient Market Hypothesis
- Theory that asset prices reflect all known information.
- Entry Signal
- Indicator triggering a trade initiation.
- Exit Signal
- Indicator triggering a trade closure.
- Exchange API
- Programmatic interface for trading and data access.
- Exposure
- Total amount at risk in active positions.
- Fair Value
- Theoretically correct price based on fundamentals.
- Fill Price
- Actual price at which a trade executes.
- Funding Rate
- Fee paid between longs/shorts in perpetual futures.
- Gaussian Distribution
- Bell-shaped probability distribution of returns.
- Grid Bot
- Bot placing regular buy/sell orders across price levels.
- Hedging
- Reducing risk by offsetting potential losses.
- High-Frequency Trading (HFT)
- Extremely fast algorithmic trading.
- Hot Wallet
- Crypto wallet connected to the Internet for trading.
- Hydrostatic
- Indicator measuring network congestion in crypto, e.g. gas fees.
- Impermanent Loss
- Loss from providing liquidity vs. holding assets.
- Indicator
- Mathematical tool for predicting market movements.
- Initial Margin
- Collateral required to open a leveraged position.
- Integration Risk
- Failure in system interoperability causing issues.
- Institutional Investor
- Large organizations-investing large sums.
- Intraday
- Term referring to within one trading day.
- Investment Grade
- High-quality, low-risk asset classification.
- KYC (Know Your Customer)
- Verification process for compliance.
- Leverage Ratio
- Ratio of borrowed funds to own capital.
- Limit Down/Up
- Maximum price movement cap per session.
- Liquidity Pool
- Funds locked in DEX for trading and swaps.
- Long Position
- Buying expecting price to rise.
- Mark Price
- Calculated fair price for margin/liquidation.
- Margin Call
- Demand for additional collateral to maintain position.
- Market Cap
- Total market value of a cryptocurrency.
- Market Depth
- Volume available at various price levels.
- Mean Reversion
- Price returning to its average over time.
- Middleware
- Software layer enabling Bot ↔ API communication.
- Minimum Tick
- Smallest price movement increment.
- Mobile API Key
- Restricted key only allowing mobile-level access.
- Mission Critical
- Systems whose failure would cause severe loss.
- Monte Carlo Simulation
- Testing strategies under random market conditions.
- Momentum Straddle
- Options strategy capturing directional moves.
- Multi-Exchange Bot
- Bot trading simultaneously on multiple platforms.
- Nonce
- Unique number ensuring request authenticity.
- Node
- Computer running blockchain software.
- Notification Service
- Component sending alerts to phone/email.
- Off-Chain Transaction
- Trades recorded outside the blockchain.
- On-Chain
- Transactions recorded on the blockchain.
- Order Book
- List of active buy and sell orders.
- OTC (Over‑the‑Counter)
- Direct trades between two parties, off-exchange.
- Overfitting
- Strategy tuned too tightly to historical data.
- Paper Trading
- Simulation trading without real money.
- Payoff Diagram
- Graph showing profit/loss vs. price movement.
- PnL (Profit and Loss)
- Total realized and unrealized gains/losses.
- Position
- Holdings in a security or asset.
- Position Sizing
- Determining trade size based on risk.
- Precise Trading
- Trading focusing on small price movements.
- Protocol Risk
- Risk of failure in smart contract code.
- Quote Currency
- Currency in which value of asset is quoted.
- Real Money (Fiat)
- Government-issued currency like USD.
- Rebalancing
- Adjusting portfolio to target allocation.
- Rehypothecation
- Reuse of client assets by brokers.
- Regulatory Risk
- Potential losses due to legal changes.
- Rent-Seeking Behavior
- Extracting value without contributing.
- Resilience
- Ability to maintain operations under stress.
- Rollback
- Reversing incorrect or failed operations.
- ROI (Return on Investment)
- Gain or loss percentage over invested amount.
- Run Extension
- Automatic bot restart on error or crash.
- Sandbox
- Secure testing environment separate from production.
- Scalping
- Making many small trades for incremental gains.
- Scheduled Task
- Automated operations (e.g., daily scans).
- Session Token
- Short-lived authentication token for API sessions.
- Shadow Ban
- Sneaky API usage limitation by exchanges.
- Signature
- Cryptographic proof of API request authenticity.
- Smart Stop‑Loss
- Trailing stop-loss that locks profits automatically.
- Soft Fork
- Blockchain protocol change backward-compatible.
- Solid Liquidity
- High volume ensuring low slippage.
- Social Trading
- Copying strategies of other traders.
- Solidity
- Programming language for Ethereum smart contracts.
- Spot Market
- Market for immediate asset settlement.
- Spread Trading
- Simultaneous buy/sell to profit from differential.
- Standard Deviation
- Statistical measure of return dispersion.
- Stochastic Oscillator
- Indicator comparing closing price to range.
- Stop-Limit Order
- Order that turns into limit upon price trigger.
- Support and Resistance
- Price levels preventing further direction moves.
- Switch‑Mode Bot
- Bot that switches strategies based on conditions.
- Symbol Pair
- Two assets representing a trading pair (e.g., BTC/USDT).
- Systemd Service
- Linux service for managing bot as background daemon.
- Takeover Risk
- Loss due to hostile acquisition or fork.
- Technical Analysis
- Price and volume-based forecasting technique.
- Tokenomics
- Economic model of token supply and valuation.
- Trailing Stop
- Stop-loss that moves as price moves.
- Transaction Fee
- Cost incurred for executing trades.
- Transfer Function
- Mathematical model of trading system response.
- Trend Line
- Line showing current trajectory of prices.
- Triangular Arbitrage
- Profits earned by exploiting three-symbol price mismatch.
- Trigger Level
- Threshold causing pre-defined actions or trades.
- TWAP
- Time-Weighted Average Price algorithmic benchmark.
- Uniswap
- Popular decentralized automated market maker (AMM).
- Uptrend
- Market characterized by rising prices.
- Validation
- Confirming correctness of transactions or data.
- Vault
- Secure smart contract storage for funds.
- Volatility Index (VIX)
- Measure of market fear or risk.
- Volume
- Number of units traded over a period.
- Wallet Address
- Public identifier to receive cryptocurrency.
- Whitelist
- List of trusted IPs or accounts allowed access.
- Withdrawal Fee
- Fee charged to move funds off-exchange.
- XLM
- Stellar's native cryptocurrency tickerexample.
- Yield Farming
- Strategy to earn by staking or lending crypto.
- Zero-Knowledge Proof
- Cryptographic method preserving secrecy while proving truth.