Innan du börjar din resa inom krypto – så kommer du vilja lära dig dessa begrepp och koncept.
The process by which one builds a position in a coin.
Any cryptocurrency that isn’t Bitcoin.
Profiting from the pricing difference between exchanges.
E.g. If Bitcoin is trading at $30,000 on FTX and $30,200 on Binance, People will buy from FTX and sell on Binance.
Trying to lower the average entry cost of a position by slowly buying the asset at reducing rates.
Many digital currencies make use of blocks, which contain transactions that have been confirmed and then combined together.
A distributed ledger system, consisting of a series of blocks. These blocks contain verified transactions. The blockchain was designed to be not only decentralised, but also immutable, meaning that entries could not be erased once placed on this distributed ledger.
A market where prices are seeing a continuous uptrend, leading to new highs being created over a sustained period.
A period where the prices are seeing a long term downtrend.
When large player(s) buy aggressively, causing price to rise sharply. Traders think that this is a Breakout and they start to buy. The large player then flips bias, and starts selling large amounts into these new buyers, pushing the prices down, liquidating many overleveraged traders.
The opposite of the above – designed to trap sellers instead of buyers.
A Bid is a Limit Buy order, and an Ask is a Limit Sell order. Think of it like an auction, where a Bid is the price somebody wants to pay for the asset, and an Ask is the price somebody wants to sell their asset for.
The network for a digital currency reaches consensus when the network’s nodes agree that a transaction took place. This agreement is crucial if the varying network participants (nodes) are to have the same information.
A period where the price is ranging in a well-defined region. This is a period of indecision and generally leads to a volatile movement in either direction.
Also known as a ‘pullback’, a correction is a fall in price after making a new peak or an upwards rally.
A currency that relies on cryptography. Bitcoin, for example, leverages cryptography in order to verify transactions.
The process of encoding and decoding information so that observers are unable to understand the information being sent.
Taking a position in the market (buying or selling, long or short) and exiting it the same day.
These are bets where you don’t own the token, but can make money from it moving up or down because the price is ‘derived’ from the token it tracks. (BTC-PERP, BTC-0624)
An area or level with significant buy orders.
Opposite of uptrend, price here makes lower highs and lower lows.
The process by which one sells their coins.
A system of recording information that is simply spread across many different devices.
An online marketplace which allows buying and selling of BTC and other Cryptocurrencies (Altcoins). E.g. FTX, Binance.
Currencies that have value because they are minted by a central bank. Fiat means ”by decree,” and these currencies have value because some central authority has decreed that they have monetary value. Examples include USD, GBP.
A fork is a change in a digital currency’s rules or protocol. Developers update a cryptocurrency’s protocol from time to time. A fork can be either a hard fork or a soft fork. A hard fork is a change to a digital currency’s protocol that makes blocks created using the old protocol incompatible with the new chain.
FOMO- Fear Of Missing Out
The emotional response to entering a trade without research or on impulse because you fear missing out on the move.
Fear, Uncertainty and Doubt.
Like derivatives, a contract where you can make a profit from the price of an asset going up or down, but you do not own the underlying asset. (BTC-PERP, BTC-0624)
A slang term for an investor who holds cryptocurrencies. The acronym originally came from a misspelling of the world ”hold.” Crypto can be highly volatile, so when they start experiencing significant price fluctuations, some market participants state that they should simply ”HODL.”
Shorthand for High Time Frame – referring to a candlestick chart on a longer term basis (Daily, Weekly etc.)
Initial Coin Offering (ICO)
An ICO is where an organisation offers digital tokens to the public in an effort to raise money. New projects hold these offerings so they can finance projects.
KYC stands for ”know your customer.” Many jurisdictions have KYC regulations, which require verification of new customers when joining an exchange before they can buy or sell crypto.
The extra amount of asset bought or sold, over your capital limit.
E.g. If you buy $10000 of Bitcoin with an initial capital of $5000, you have a leverage of 2x. Sites like FTX allow leverage as per your choice.
This is a buy position with leverage.
E.g. If you have $1000 as capital, you could buy $2000 worth of Bitcoin with leverage, or
Both profit and loss in this case is multiplied by the leverage you take.
E.g. A 10% rise/fall in price in case of a long position with 2x leverage will lead to 20% profit or 20% loss.
The measure of how much supply and demand there is on the market for a particular coin. A high liquidity coin has many buyers and sellers at the same time.
An order will execute at a predefined price, if the market reaches that price.
Shorthand for Low Time Frame – referring to a candlestick chart on a near term basis (5min, 30min, 1 hour etc.)
When you are stopped out of your position because the trade went in the opposite direction and your margins are not sufficient to carry the trade anymore.
The size of the market for that cryptocurrency. Equal to the current supply (number of coins available) multiplied by current price of said coin.
An order to buy or sell at the current best price available, executed immediately.
The amount of funds required to open a leveraged trade.
E.g. If you want to open a position of $10000 with a leverage of 5X, your margin
requirement would be $2000.
2000 x 5 = $1000
Mining is the process for creating new units of a digital currency. For example, the bitcoin network releases new bitcoins every time a block is mined. In this instance, mining involves confirming transactions and combining them into blocks. This verification requires hardware and electricity, and miners are rewarded with digital tokens for contributing these needed resources.
When a digital currency moons, that means it rises sharply in value. For example, a crypto trader could talk about how an altcoin is going ”to the moon!”
Open, high, low and close
Open Interest (OI) is the total number of derivatives contracts currently open for a particular asset. OI is calculated by adding the total number of longs and shorts.
POW is an acronym for ”proof of work,” which is a system of proving that a digital currency’s transactions have been verified. Many digital currencies, including bitcoin, use POW. Under such a system, miners must do ”work” in the form of difficult mathematical problem solving in order for them to contribute, but easy for the broader network to verify.
POS stands for ”proof of stake,” which is another method of confirming transactions. The digital currencies that use this approach to verification frequently provide all their digital tokens up front, and miners are selected based on how many units they have (their stake). In these cases users who confirm transactions receive transaction fees for their contributions.
Taking a position in the market over a period of Weeks or even Months.
A private key is a piece of information—presented as a string of numbers and letters—that an investor can use to access their crypto.
A public key is an address where an investor can receive crypto. This public key, like the private key, is a combination of numbers and letters.
Pump and Dump
A ”pump and dump” is a type of market manipulation where a market participant—or several—work together to inflate the price of an asset so they can sell it when its value is artificially high.
The term ”rekt” is crypto trader slang for ”wrecked.” Basically, it means that a trader lost substantial amounts of money.
ROI is short for ”return on investment.”
Return-on-Equity. This is calculated by the actual capital employed in a trade and not through leverage.
An area/line where traders expect the price to stop moving up and reverse downwards.
An upward trend leading to an increase in price of the coin.
Satoshi Nakamoto is the pseudonym for the creator of bitcoin, and more than one individual has claimed to be Nakamoto. However, none of these claimants have managed to convince the broader cryptocurrency community that they are, in fact, the creator of bitcoin.
Taking a position on a very short timeframe (minutes) aiming to capture a fast profit on a move.
Taking a position in the market over a period of Days to 1-2 Weeks.
Opposite of Long Entry. You enter a short entry when you expect the prices to fall.
This is where you buy and own the token you’ve bought. (BTC/USD, BTC/USDT)
The difference between the price sellers are willing to sell at and buyers are willing to buy at. There always exists a spread on exchanges, the more liquidity an exchange has, the lower the spread will be.
An area or level with significant sell orders.
An order that is triggered when price goes above/below a set price. Used to limit losses when a trade goes against expectation.
A support is an area/line where traders expect the price to hold above or bounce back up from.
A digital token is a unit of a digital currency, such as a bitcoin. It is worth noting that some of these tokens are used for specific ecosystems, and those are frequently referred to as utility tokens.
The time spread of each candle stick in a chart. Common time periods are 5min, 30 min, 1Hour, 4 Hour, Daily etc.
When price is making higher highs and higher lows over a given timeframe.
This is the amount of money flowing in and out of a token.
The percentage movement in price of an asset over a specific time period.
The term ”whale” is used to describe a trader who makes sizable bets. Market participants with the ability to execute very large transactions can potentially manipulate the market
The developers who create digital currencies usually provide white papers for these assets. These documents generally offer comprehensive information on the digital token in question, as well as its underlying technology.