Crypto Trading Glossary
Trading crypto is hard, and the various definitions and terms don’t make it any easier. Knowing trading terms makes it easier to communicate with other crypto traders, which is a must if you’re trying to be successful in trading. Before you jump into the world of Crypto Trading, we recommend you read up on the different terms in our or another glossary to fully understand what you’re doing.
We have compiled a glossary of the most common crypto trading terms, both easy and hard.

A
Airdrop: Free distribution of cryptocurrency to users, usually as a promotion or reward.
Altcoin: Any coin besides Bitcoin.
Arbitrage: Buying in one market, selling in another for a profit because of price differences.
ATH (All-Time High): The highest price a cryptocurrency has ever reached.
ATL (All-Time Low): The lowest price a cryptocurrency has ever reached.
B
Bear Market: A market where prices are down 20% or more, bearish. If a trader is bearish they expect the market to go down.
Blue-chip: Big established companies or coins with a track record.
Bond: Loan to an entity (like a government or corporation) that pays interest periodically and repays the principal at maturity.
Bull Market: A market where prices are up, bullish. If a person is bullish they expect the market to go up.
C
Centralized Exchange (CEX): Exchange run by a company or organization where users trade through a middleman. Centralized exchanges require verification of identity or KYC.
Circulating Supply: Amount of a cryptocurrency in the market.
Collateral: Assets used to back a loan or position.
Crypto Exchange: Where you can buy, sell or trade coins.
Custodial Wallet: A wallet where a third party holds the private keys. Every crypto you store at a CEX is a Custodial Wallet.
D
Day Trade: Buying and selling on the same day to profit from short term price movements.
Decentralized Exchange (DEX): Peer-to-peer marketplace where users trade cryptocurrencies without a middleman. If you trade using a self-custody wallet you need to use a DEX.
Derivatives: Financial instruments that get value from an underlying asset, like futures or options.
Double Spending: Spending the same cryptocurrency multiple times, using the same tokens for multiple transactions.
DYOR (Do Your Own Research): Research before you invest in a project.
E
ETF (Exchange-Traded Fund): A fund that tracks an index or asset and trades on stock exchanges.
Expiration: The date when a derivative contract, like an option or future, ends or settles.
F
Fair Launch: A launch where everyone has equal chance to participate without pre-mining or early access.
Fork: A change or split in a blockchain that creates a new version or coin.
FUD (Fear, Uncertainty, Doubt): Bad news or rumors that cause panic or insecurity in the market.
Futures: Contracts to buy or sell an asset at a set price on a specific date without ownership of an asset.
G
Gas Fee: Transaction fee paid to miners or validators for a transaction on a blockchain.
Genesis Block: The first block in a blockchain.
H
Head and Shoulders: Common trading pattern that traders use to make predictions. The pattern is a negative reversal pattern at highs and a positive reversal pattern at lows.
Hedge Fund: Investment fund that uses advanced strategies to maximize returns while minimizing risk.
HODL: A typo of “hold”, meaning to hold long term despite price changes.
I
ICO (Initial Coin Offering): Way for new coin projects to raise funds by selling their tokens.
Impermanent Loss: Short term loss for liquidity providers due to price changes in the assets they pool.
Insider Trading: Using non-public information to make profitable trades which is illegal. Insider trading is very common in the crypto trading world.
Isolated Margin: Your margin is limited to a single position. Isolated margin implies less risk, since you only lose the margin capital you used to open the position if you get liquidated.
K
KYC (Know Your Customer): Verification process where users provide personal information to comply with crypto regulations.
L
Layer 2: Solutions built on top of a blockchain to speed up and reduce costs.
Leverage Trading: A way to trade different cryptos with borrowed funds to increase buying power. Requires a collateral.
Limit Order: Order to buy or sell at a specific price or better.
Liquidity: Measurement of available capital in a token. The more liquidity, the more traders can buy and sell.
Liquidity Pool: A pool of funds locked in a smart contract to trade on a DEX.
Liquidation: When your position is closed due to a loss of your margin funds. If the losses exceed the margin capital you have you’re closed out of the position taking a 100% loss.
Longing: Bets that an asset will go up. Longs profit when the price of a crypto goes up.
M
Mainnet: Live blockchain network.
Margin: Term that refers to your deposited capital. The amount of buying power you have when trading with leverage is calculated on your initial margin.
Margin Call: A warning from the broker you’re trading at that you’re running out of margin. While leverage trading you deposit initial margin funds which are used as risk capital.
Market Cap (Market Capitalization): Total value of a coin or asset.
Market Order: Order to buy or sell at the best available price.
Meme Coin: A token created with no real utility, often inspired by internet trends and memes. Typically low market cap and low liquidity.
Mining: The process of validating and adding transactions to the blockchain and earning rewards.
N
NFT (Non-Fungible Token): Unique digital asset that represents ownership of items like art, music or videos. The NFT is stored on the blockchain to confirm your ownership.
O
Order Type: Instructions on how and when to execute a trade (e.g., market, limit, stop orders).
Orderbook: List of buy and sell orders for an asset on an exchange.
P
Perpetual Futures: Futures contracts with no expiration date, designed for continuous trading. You don’t need to own a crypto to trade futures.
Proof of Stake (PoS): Consensus mechanism where validators are chosen based on the amount of cryptocurrency they hold and stake.
Proof of Work (PoW): Consensus mechanism where miners solve complex problems to validate transactions.
R
Risk Management: Ways to minimize losses and protect your investments.
Rug Pull: Scam where developers abandon a crypto project after taking investor funds. Rug pullers typically hold a large amount of an asset and then sell when their happy with their profits.
S
Scalping: Very short term trading strategy to make a quick profit. Scalpers are only in the market for a few minutes usually with positions using high leverage.
Shorting: Bets that an asset will go down. When a crypto or asset goes down in price short bets increase in value.
Slippage: Difference between expected and actual price when executing a trade.
Spread: Gap between the highest bid and the lowest ask price for a crypto or asset. The tighter the spread the better the liquidity is.
Stablecoin: Cryptocurrency pegged to a stable asset on a 1×1 basis. Stablecoins are Fiat-backed with the most popular being USDT, pegging the US dollar.
Stop Loss: Order to sell an asset at a specific price to limit your losses. Stop losses automatically sell when the price reaches your set threshold.
Swing Trade: Medium term trades to profit from price swings over a couple of days or weeks. Not very active traders compared to scalpers or day traders.
T
Taker: Trader who fills an order that matches an existing order in the order book.
Technical Analysis: Using historical price data and patterns to predict future price movements.
Tokenomics: The economic model of a cryptocurrency, supply, distribution and utility.
Trading Range: Range between the highest and lowest prices over a specific time frame. If a token has been trading between $0.01 and $0.02 for a certain time, then that is considered the trading range.
U
Underlying Asset: Asset that a derivative is based or derived from. .
V
Validator: Participant in a blockchain network that validates transactions and secures the network.
Vesting Period: Time when tokens are locked and cannot be sold.
Volatility: Rate of price change, risk.
Volume: Total traded over a period.
W
Whale: Trader or investor who holds a large amount of cryptocurrency and can move the market, typically owning around 10% of a token.
Whitepaper: Document that describes the purpose, technology and roadmap of a cryptocurrency project.
Y
Yield: Return on investment, usually expressed as a percentage.
Yield Farming: Earning rewards by lending or staking in DeFi.
Yearn: Platforms that optimize yields across DeFi protocols, like Yearn Finance.