Cryptocurrency, Forex and Stock Trading Terms You Must Know About – Technical Analysis

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Trading terms can be mind-boggling to non-traders or people that just want to start trading. This article is dedicated to explaining what those terms mean.

 

Trading Terminology:

  • Altcoin – Alternative Coin. Bitcoin is a coin and other cryptocurrencies are Altcoins.
  • FIAT – Money issued by governs (USD, EUR, GBP).
  • Leverage Trading – Trading with borrowed assets, resulting in a higher profit. It’s very risky because you can lose your money. For example, one has $100 and wants to trade with 100% leverage($200 in total). If the asset goes down by 50%, he will lose his $100. If it wasn’t a leveraged trade, he would still have $50 worth of assets left. In conclusion, the higher the leverage, the riskier it gets.
  • Margin Trading – Asset borrowing account on an exchange. One is allowed to trade with more value than he can buy. It works like a debt. If one has $ 100, he will be able to trade with $1000 worth of assets as an example. It depends on the leverage amount(the higher the leverage, the higher the risk).
  • Market Order(buy and sell) – Instant purchase of assets at the current market price.
  • Limit Order(buy and sell) – Instant sell of assets at the chosen price.
  • Stop Limits – An order will be executed if a certain price is met.
  • HODL – It means not to sell an asset.
  • Sell Wall – Is an Indicator of the exchanges that shows whether the buyers or sellers are currently in control.
  • ROI – Return of Investment.
  • Trend – A direction in which a market is going.
  • Trend reversal – A shift in the market direction(sentiment).
  • FUD – Fear, Uncertainty and Doubt. The feeling of the market, people selling. It can be due to bad news.
  • FOMO – Fear Of Missing Out.
  • ATH – All-Time High. It means the highest price an asset has ever reached(usually due to the bull runs).
  • ATL – All-Time Low. It means the opposite of ATH, the lowest price an asset has ever reached(usually due to the bear runs, or when an asset is new on the market).
  • The Bottom – Is the lowest price reached after a correction. Usually looks like a V shape.
  • Swing High –  Is a Higher high than the previous one, in a downtrend. In a downtrend, it would be a lower high.
  • Swing Low – Higher Low than the previous one, in an uptrend. In a downtred, it would be a lower low.
  • Pump – Someone buying large amounts of an asset, resulting in a price increase. The pumps can be long term positions either reaction to news or bull traps.
  • Dump – Someone selling large amounts of an asset, resulting in a price decrease.
  • Whales – Someone holding enough assets to impact the markets.
  • Bag Holder – Someone that owns a significant amount of a specific asset bought at a low price.
  • A Shill/Shiller – Is someone that is promoting an asset. It’s not necessarily a bad thing but usually occurs as a bad thing in chats. One should not listen to shillers and do their own due diligence instead.
  • Moon – “We are going to the moon” is often used when a significant price increase will occur.
  • Correction – A price decrease after a strong move.
  • Consolidation – A flat area in which the price is moving in a certain range before deciding for the next move.
  • Dip – A decrease in price. “Buy the dip or the discount ” often used after a bottom or dump has occurred.
  • Bear – Someone that believes the price will go down.
  • Bull – Someone that believes the price will go up.
  • Bear market – These are periods in markets when there is not much price activity beyond certain levels and with the potential of setting new lows. It happens after a big correction and it means that there is no confidence in a market.
  • Bull market – The confidence in a market is restored after a big correction had occurred. It means that the bottom has been reached and the price will recover. Possibly setting new ATHs.
  • Dead Cat Bounces – It’s when a market recovers for a short period after a fall before falling again.
  • Going Short – It means that one believes a market will lose values and he/she will sell.
  • Going Long – It means that one believes a market will gain value and he/she buy.
  • Support – An area where the price will be stable for a period of time.
  • Resistance – An area where the price may find difficult to get past.
  • Stable coin – A coin that is not affected by Inflation or Deflation. It will stay at the same price.
  • Pattern – Harmonics, Triangles, Wedges, Etc. Basically, when similar patterns/shapes occur, the market reacts to them. They can be bullish or bearish.
  • Bullish Engulfing/Hammer/Shooting Star – It’s a candle pattern, that has a big wick. It looks like a hammer pointed upwards, and it can be a pretty strong indicator to buy.
  • Bearish Engulfing/Hammer/Shooting Star – It’s the same as a bullish hammer, but it’s upside down and it indicates a move down.
  • Doji Candle – Is a candle with wicks on both sides and it indicates indecision in a market.
  • Arbitrage Trading — Basically, buying at a cheaper price from an exchange and selling at a bigger price on others.
  • Tendl Lines – Lines that are drawn in the direction of the trend by connecting as many wicks and candles a possible.
  • Channel – Two trend lines that are drawn above and below the current candle.
  • Frow/trend – It will result in something that looks like a channel.
  • MACD – Moving Average Convergence Divergence.
  • RSI – Relative Strength Index.
  • Volume – The amount of an asset getting traded.
  • Volatility – Price swings, big volume.
  • Bolinger Bands – An indicator that shows the volatility in a market.
  • MA – Moving Averages.
  • EMA – Exponential Moving Averages.
  • Indicator Divergence – The chart may look a bit different than how it looks on the indicator. RSI divergence can show us whether the bulls or bears are in control, for example.
  • TA – Technical Analysis.

The terms mentioned above can be used in Forex Trading, Stocks and Crypto markets.

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