The vocabulary of the crypto trader

APR (Annual Percentage rate): Annual unfunded rate of return.

APY (Annual Percentage Yield): Real rate of return obtained in one year if interest is compounded. Compound interest is periodically added to the total invested, increasing the balance.

Arbitrage : Taking advantage of the price discrepancy that may exist between numerous “exchanges” to purchase on one and sell on the other. Prices tend to equalize on all marketplaces as a result of arbitrage. When considerable differences persist, it is frequently because the fees imposed (to the transaction or the withdrawal) are not the same.

ATH : All Time High,  highest price ever reached.

Bear market: market with a downward trend.

Bear Market meme - Source: Telegram
Bear Market meme – Source: Telegram

BTFD (Buy The Fuckin’ Dip): Basic principle of trading:  “buy when everyone is selling and the price seems to be at its lowest”.

Buy the dip - Meme using Waren Buffet - Source: Telegram
Buy the dip – Meme using Waren Buffet – Source: Telegram

Bull market: market with a positive trend This scenario is also qualified by the term “bullish.”

CEFI (Centralized Finance): A company with a platform that sells stacking items. In contrast to DeFi, society establishes the rules.

CeDeFi : Centralized platform that allows investing in DeFi (decentralized finance).

Chart: Price chart.

Correction: After a reasonably extended period of growth or decrease, the price returns to (or approaches) its prior level.

Healthy correction meme Crypto - Source: Telegram / 9gag
Healthy correction meme Crypto – Source: Telegram / 9gag

Day Trading: Short-term speculative activity characterized by frequent purchasing and selling. The “day trader” is the polar opposite of the “hodler,” or long-term investor.

Dark pool : practice intended at allowing whales, particularly institutional investors, to conduct anonymous transactions on a platform, that is, without being visible to the rest of the market As a result, the market trend is not altered as much as it could be by the publishing of a significant number of operations, while the latter add liquidity to the platform. In the event that transactions are disclosed, this approach might result in a dramatic drop in prices.

DeFi (Decentralized Finance): A DAO governs a decentralized program built on the Blockchain protocol (Decentralized Autonomous Organization).

Dip (fall): A abrupt and temporary drop in pricing that quickly regains its worth. This might be a large sell by a single player. Dips might be profitable for individuals who have placed purchase orders.

DCA (Dollar-cost averaging): Investment technique for major entrants in illiquid markets that consists of purchasing in installments to lessen the impact of volatility in particular.

Exchange (exchange platform) : marketplace dedicated to crypto-currencies: Paymium, Kraken, Coinbase, Poloniex, etc.

FOMO (fear of missing out): Fear of missing out on an opportunity when the price rises. When it comes to a collective phenomenon, this fear might cause bubbles.

Fomo meme - Source: Telegram
Fomo meme – Source: Telegram

Front running: For a broker, manipulation consists of profiting from the price fluctuation caused by the execution of one of its clients’ orders. He can, for example, place multiple modest purchase orders on his own account immediately before placing a large order for his client, increasing the asset’s value and making an attractive financial gain.

FUD (Fear, Uncertainty and Doubt): Fear, uncertainty, and skepticism A method of communicating negative, frequently ambiguous, and fear-inducing information with the goal of decreasing the price and/or discrediting a project.

FIAT (Fiat money): currency issued by central banks, which is based on the confidence that we have in these issuing institutions. Example: $, €, £…

HODL: comes from the word “hold”, which means to hold. The “hodler” invests for the long term.

ICO Initial Coin Offering : Raising funds in cryptocurrency by issuing and selling a token.

Kijun : In technical analysis, it is the curve formed by averaging the high and low prices of the previous 26 sessions. It is regarded as an equilibrium line and gives useful information when it is near significant support or resistance.

Lending : The activity of lending cryptocurrency using a smart contract in order to earn interest. A deposit from the borrower secures the loan.

Limit buy : Buy trigger order placed by the investor to buy crypto-currencies at a price fixed in advance.

Limit sell : Trigger order to sell at a price fixed in advance.

Lock-up : at a minimum period during which the investor undertakes not to withdraw the crypto-assets invested on a CEFI platform.

Long position : Use margin trading to gamble on the growth. That is, borrowing cryptocurrency in the hope of a rise that will both repay the loan and make a profit.

Market Buy : purchase order at the market price.

Market cap : Theoretical value of a cryptocurrency’s money supply. The “market cap” is calculated by multiplying the number of tokens in circulation by the price of one unit.

Market sell : order to sell at the market price.

Margin trading  : Margin loans allow lenders to use dormant money without danger of default; however, you may only borrow in proportion to your assets on the platform. The only risk that the lender must bear is the security of the transaction. “The benefit of margin lending is that it adds liquidity to the market; the disadvantage is that it is simple for investors to lose money.” OTC trader Zhao Dong

Moon (moon): The most optimistic use this word to describe the direction of pricing.

To the moon meme - crypto. Source: Telegram
To the moon meme – crypto. Source: Telegram

Panic Sell : panic and massive selling when the price starts to fall.

Pumping : artificially pushing a project or a cryptocurrency in order to induce others to invest, inflate prices, and sell advantageously

Pump & Dump : Market manipulation, often carried out by a significant player or group of major players, consists of purchasing massive amounts of a cryptocurrency in order to artificially inflate prices with the intention of instilling a sense of “FOMO” in prospective purchasers. When this goal is met, the pumper transforms into a “dumper,” selling everything before the others to maximize profit.

Rekt : The term “wrecked” is derived from the English word “annihilated.” It’s a phrase that signifies you lost a lot of money on a poor investment, or perhaps your whole investment in the case of a margin loan.

Popular crypto character. Pepe. This time he got rekt. Source: Telegram
Popular crypto character. Pepe. This time he got rekt. Source: Telegram

ROI (Return on Investment): Return on investment is measured by dividing profit by investment. A return on investment of 100 percent signifies that you have twice your initial wager.

Sell ​​wall / buy wall : Some participants prefer to put sell or purchase orders on exchanges. A trade (an exchange) occurs when the sale price meets the buy price. All of these orders are recorded in a “order book.” A “sell wall” is literally a sale wall: a massive sell order or a series of minor orders at the same price. A “buy wall” is the inverse.

Short position : Margin trading allows for low-risk wagering. That is, borrowing cryptocurrencies and selling them in the hopes of receiving more than the original amount in order to repay the cost of borrowing and profit.

Spoof trading : Manipulation in which an asset is offered for sale or buy with the goal of canceling the order shortly before it is completed in order to provide misleading market dynamics, display liquidity, and get a positive price movement.

Stablecoin: A digital asset that aims for a 1:1 equivalency with a legal tender money (dollar or euro for example). This stability is ensured by a centralized organization that is meant to keep the collateral in the bank.

Algorithmic stablecoins : Decentralized digital assets whose value is automatically adjusted against a reserve coin in response to an algorithm and smart contracts. For instance, the Terra USD (UST) operates through an adjustment mechanism with its native Luna coin.

Stack : refers to all of an investor’s cryptocurrency capital.

Staking : Immobilization of an amount of cryptocurrency in order to confirm transactions on a proof-of-stake blockchain (PoS / DPoS) and collect rewards in the form of cryptocurrency in return.

Stop Buy : Order executed when the price crosses a specific threshold in order to avoid being out of the market when a bullish phase appears to begin.

Stop Loss: When the price falls below a given level, an order is executed to quit the market as a bearish phase appears to commence.

TA  (Technical Analysis): Technical analysis. A graphical depiction of the price that attempts to forecast future market movements based on previous market movements.

TVL (Total value locked): Amount of capital locked in a smart contract.

Token: A digital asset-specific accounting unit. Bitcoins are the Bitcoin network’s tokens, whereas ethers are the Ethereum network’s tokens. Certain tokens are produced and distributed on the Ethereum network as part of ICOs. They typically adhere to a standard known as “ERC20.”

Tokenomics: A collection of regulations that determines the maximum amount (commonly referred to as total supply), monetary issuance, and distribution of a digital asset.

Trading bot: The software is in charge of buying and selling without human interaction, according to a strategy established by the programmer.

Wash trading: Manipulation aimed at purchasing and selling the same crypto-asset at the same time in order to create a fake market excitement for the asset and persuade other purchasers to position themselves on it.

Whale : An important player with a large capital and whose orders can have an impact on the price.

Yield farming : Depositing cryptocurrency on a lending and borrowing platform or a liquidity pool of a decentralized marketplace to create interest.

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