In this article, we have compiled some of the most important trading terms you should know if you are trading cryptocurrency.
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- Altcoin (alternative coin, alts) - all cryptocurrencies, except for bitcoin. It is worth saying that some Altcoins are very innovative. They offer features that Bitcoin is not capable of.
- Fiat - paper money backed by government obligations (dollar, ruble, euro, yuan, etc.) Most of the world's currencies are fiat. And this money is at risk of depreciation due to inflation, deflation, and hyperinflation.
- Hamsters - novice exchange players who are highly susceptible to mass panic and regularly sell or buy cryptocurrency at the most unfortunate moments.
- Bulls - traders who believe that a market is going upwards. The word "bulls" reflects the fact that they sharply throw their target up.
- Bears - traders who believe that a market will soon drop in value, and will attempt to profit from its drop. The word "bears" reflects the fact that they push the prices down, pressuring them.
- FOMO (Fear of missing out) - means an obsessive fear of missing out on a profitable investment.
- ATH (All time high) - means that the price of any cryptocurrency or token has broken all previous records and is at the highest level for a certain period of its existence.
- ATL (All-Time-Low) - the lowest price of an asset. Breaking an All-Time Low on an asset can lead to a similar effect as when breaking the All-Time High – but in the opposite direction.
- Whale/ Bull-Whale or Bear-Whale - a term came to the cryptocurrency world from speculation. A whale is a trader with huge financial opportunities who is optimistic/pessimistic about a certain cryptocurrency and is trying to influence its dynamics.
- Hodl - a term is derived from a misspelling of "hold." It's the cryptocurrency equivalent of the buy and hold strategy.
- FUD (Fear, Uncertainty, and Doubt) - an acronym refers to investors who are unsure of their decisions.
- ROI (Return On Investment) - a ratio that shows the profitability or loss of a particular investment, in other words, the payback ratio.
ROI = Current Value - Original Cost / Original Cost
- DYOR (Do Your Own Research) - an advice for investors to do their own research into their investments not relying on others to do it for them. "Don't trust, verify" is a commonly used phrase in the cryptocurrency markets with similar meaning. The term is closely related to the Fundamental Analysis (FA).
- DD (Due Diligence) - ensuring due diligence, independent collection of objective information, and expert assessment of information about the asset. This procedure allows you to quickly receive a reasoned answer about the advisability of financial investments in the planned object.
- KYC (Know Your Customer) - the principle of activity of financial institutions, crypto projects, obliging them to verify the identity of the counterparty before conducting a financial transaction. The goal of such a policy is to better understand the clientele, reduce the risks of clients, and minimize the risk of money laundering.
- AML (Anti-Money Laundering) - a number of regulations that aim to prevent fraudsters from disguising their illegally obtained money as legitimate income. The procedures make it much harder for criminals to "launder" their money clean by hiding it or disguising it as coming from legitimate sources.
Closing LineKnowing the terms can help you navigate the materials and market news and understand some of the subtleties and nuances of the crypto industry. Read informative articles, expert reviews, follow the news, and communicate with traders. This will allow you to understand all the details even faster. The trader's vocabulary is much simpler than it might seem at first glance. Good luck with trading!