TRW Crypto Trading - Terminology
GLOSSARY
Accumulation
The market phase in which smart money buys their coins.
Altcoin / Alt
Any cryptocurrency that isn’t Bitcoin.
ATH
All-time High.
Bear Market
A period where the prices are seeing a long term downtrend.
Bear Trap
The opposite of the above - designed to trap sellers instead of buyers.
Bid/ Ask
A Bid is a buy order, and an Ask is a 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.
Bounce
When a coin, or the market itself, starts to go up after a down move.
Breakout
A Breakout is a price movement that pierces the upper or lower boundaries of a trading range.
Bull Market
A market where prices are seeing a continuous uptrend, leading to new highs being created over a sustained
period.
Bull Trap
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.
Chop / Choppy
A period where the price is moving sideways with no clear direction, usually causing traders to change their mind
frequently and lose money.
Consolidation
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.
Confirmation
Traders often look for more than one signal to confirm their opinion on the price direction of a coin. Confirmation
refers to a subsequent signal that validates or reinforces the traders opinion on where the coin is heading.
Correction / Pullback
Also known as a ‘pullback’, a correction is a fall in price after making a new peak or an upwards rally.
Day Trading
Taking a position in the market (buying or selling, long or short) and exiting it the same day.
Demand
An area or level with significant buying interest/ support.
Downtrend
Opposite of uptrend, price here makes lower highs and lower lows.
Distribution
The market phase in which smart money sells their coins.
Dump / Crash / Nuke
Price goes down rapidly.
Exchange (Centralised / CEX)
An online marketplace which allows buying and selling of BTC and Altcoins through a centralised company who
custody your assets. E.g. Coinbase, Binance.
Exchange (Decentralised / DEX)
An online marketplace hosted on a blockchain which allows buying and selling of BTC and Altcoins in a trustless
manner (no middle man). You retain custody of your assets. E.g. Uniswap, Sushiswap
EV
Expected Value. A term used in probabilistic thinking when estimating potential returns of a trade.
Fade
To take a position that is counter to the current trend of a coin. The position is established at the end of an up or
down leg.
Fiat
Currencies that have value because they are minted by a central bank. Examples include USD, GBP, EUR.
Flat / Get Flat
To close out a position and remain neutral.
FOMO- Fear Of Missing Out
That feeling you get when the market pumps and you’re not in a long trade. Learn to ignore it.
FUD
Fear, Uncertainty and Doubt.
or project.
A term used to describe negative news articles or other information about a coin
Front Running
Taking a position in a coin based on non-public information such as an impending transaction by another person in
the same or related coin.
HTF
Shorthand for High Time Frame - referring to a candlestick chart on a longer term basis (Daily, Weekly etc.)
KYC
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.
Leverage
The extra amount of asset bought or sold, over your capital limit.
E.g. If you want to go long $10000 worth of Bitcoin with an account balance of $1000, you would have to use
leverage of 10x. Leverage opens you up to risk of liquidation on sudden price moves.
Long / Going Long / Long Trade
A buy order to open a position on perpetual futures. ‘Buy’ and ‘Long’ are often used interchangeably.
Liquidity
The measure of how much demand and supply (bids and asks) there is on the order books for a particular coin. A
high liquidity coin has many available buyers and sellers at the same time.
Limit Order
An order will execute at a predefined price, if the market reaches that price.
LTF
Shorthand for Low Time Frame - referring to a candlestick chart on a near term basis (5min, 30min, 1 hour etc.)
Liquidation
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.
Market Cap
Current supply (number of coins available) multiplied by current price of said coin.
Market Maker
A professional dealer or person with trading privileges on an exchange who has an obligation to buy when there is
an excess of sell orders and to sell when there is an excess of buy orders.
Market Order
An order to buy or sell at the current best price available, executed immediately.
Margin / Initial Margin
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 = $10000
Maintenance Margin
Maintenance margin is the amount of account balance (collateral value) required to avoid a margin call. If your
balance falls below the maintenance margin, your positions will be liquidated. Note that Margin and Maintenance
Margin are not the exact same number. Always check your specific exchange for the required % of maintenance
margin.
Moon/Mooning
When a coin ‘moons’, that means it rises sharply in value. For example, a crypto trader could talk about how an
altcoin is going "to the moon!"
NY
New York.
OHLC
Open, high, low and close. Refers to candlestick charts.
Open Interest
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.
Overbought
A technical opinion that the market price has risen too steeply and too fast in relation to underlying fundamental
factors.
Oversold
A technical opinion that the market price has declined too steeply and too fast in relation to underlying fundamental
factors.
PA / Price Action
Analysis of the basic price movements to generate trade entry and exit signals that ignores fundamentals and
focuses solely on what price is telling us.
P&L / PnL
Profit & Loss. What a trader has made or lost in a given timeframe.
Position Trade
Taking a position in the market over a period of multiple weeks or even months.
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.
Pump / Rip
Price goes up rapidly.
Rekt
The term "rekt" is crypto trader slang for "wrecked." Basically, it means that a trader lost substantial amounts of
money.
Resistance
An area/line where traders expect the price to stop moving up and reverse downwards.
Rally
An upward trend leading to an increase in price of the coin.
Range / Ranging
The difference between the high and low price of a coin during a given time period. Ranging means we are going up
and down with no clear trend.
Risk
How much you will lose if your trade fails.
Reward
How much your trade will return if it wins.
RR
Risk reward, shorthand for how much profit you stand to make per unit of risk.
Scalping / Scalp Trade
Taking a position on a very short timeframe (minutes) aiming to capture a fast profit on a move.
Selling off
When a coin is going down and the thought is that it will continue to do so.
Slippage
The difference between estimated fill price for a trade and the amount paid due to market conditions, poor execution
etc.
Swing Trade
Taking a position in the market over a period of 2-7 days.
Short / Shorting / Short Trade
A sell order to open a position on perpetual futures. ‘Sell’ and ‘Short’ are often used interchangeably.
Short Squeeze
When those that are short have to cover (close their position) to avoid excessive losses. Leads to a seemingly
unexplainable up move.
Spread
The difference between the price sellers are willing to sell at (best ask/offer) and buyers are willing to buy at (best
bid). There always exists a spread on exchanges, the more liquidity an exchange has, the lower the spread will
be.
Supply
An area or level with significant sell orders.
Stop-Loss
An order that is triggered when price goes above/below a set price. Used to limit losses when a trade goes against
expectation.
Support
A support is an area/line where traders expect the price to hold above or bounce back up from.
Sweep
Where price goes above or below a consolidation range and reverses back into the range. “Sweep the lows” or
“sweep the highs” typically refers to a price move designed to hit the stop-losses of traders.
The Tape / Reading the Tape
Known as Time and Sales – this is the list of trades that have been executed on a particular coin. Tells you the price
the trade went off at and the number of contracts/ coins that were traded.
Token
A digital token is a unit of a digital currency, such as a bitcoin. Interchangeable with ‘coin’.
Time Frame
The time spread of each candlestick in a chart. Common time periods are 5min, 30 min, 1Hour, 4 Hour, Daily etc.
Trend
The general direction, either upward or downward, in which prices has been moving.
Trendline
In charting, a line drawn across the bottom or top of a price chart indicating the direction or trend of price movement.
If up, the trendline is called bullish; if down, it is called bearish.
Uptrend
When price is making higher highs and higher lows over a given timeframe.
Volatility
The percentage movement in price of an asset over a specific time period.
Volume
Total number of coins or contracts traded in a particular time period.
Whale
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.
NON-CRYPTO
CPI
Consumer Price Index. A monthly data release that analyses and estimates Inflation as it relates to consumers
spending habits.
DXY
The ticker for the US Dollar index
ES
The ticker (stock symbol) for S&P 500 Futures, which can be bought and sold through the Chicago Mercantile
Exchange.
FOMC / FOMC Meeting
Federal Open Market Committee. A group of members representing US reserve banks who meet to decide on
monetary policy.
Federal Reserve / Fed
The board sets Fed policy regarding monetary policy (interest rates, credit, etc.), and monitors the economic health
of the country.
Inflation
The rate at which the general level of prices for goods and services in an economy is rising.
NQ
The ticker (stock symbol) for Nasdaq 100 Futures, which can be bought and sold through the Chicago Mercantile
Exchange.
PPI
Producer Price Index. A monthly data release that analyses and estimates Inflation through the prices domestic
producers receive for their output.
SEC
Securities & Exchange Commission. The Federal regulatory agency established in 1934 to administer Federal
securities laws.
Tradfi
Shorthand for “traditional finance” and refers to the legacy stock, bonds, currency markets etc. (Example: S&P500)
TIME
UTC
Coordinated Universal Time - the timezone used for crypto charting.
Daily Open / Asia Open - UTC 00:00
The start of a new daily session, and new daily candle on the charts. Also when the Asian markets begin to open
(Mon - Fri)
Weekly Open - UTC 00:00 on Monday AM
The start of a new week, and a new weekly candle on the charts.
NY Open – 9:30A.M (New York Time)
When the NYSE (New York Stock Exchange) opens for the trading session. Mon - Fri excluding public holidays.
NY Close - 4:00 P.M (New York Time)
When the NYSE (New York Stock Exchange) closes for the trading session. Mon - Fri excluding public holidays.
London Open - 8:00 A.M (London Time)
When the LSE (London Stock Exchange) opens for the trading session. Mon - Fri excluding public holidays.
London Close - 4:30 P.M (London Time)
When the LSE (London Stock Exchange) closes for the trading session. Mon - Fri excluding public holidays.
CME Open – 6:00 P.M (New York Time) every Sunday (excluding holidays)
When the US futures markets open for pre-market trading. This is important as there are BTC and ETH futures on
the CME.
Candlestick abbreviations
M1 = 1 minute candle
M5 = 5 minute candle
H1 = 1 hour candle
H4 = 4 hour candle
1D = 1 day candle