Crypto Trading Terms

When a person first enters a crypto exchange, it seems like they have stepped into another world. Charts everywhere, order books, strange abbreviations and words like “taker,” “funding,” “FOMO.” Understanding this language is the first step to stop being afraid of trading and start seeing what is really happening in the market.

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The order book is a list of all buy and sell orders.

-At the top — sellers’ orders (ask),

-At the bottom — buyers’ orders (bid).

When prices meet, a trade takes place. The more orders are in the book, the “thicker” (more liquid) the market is, and the harder it is to move the price with a single large trade.

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To trade, a trader places a request — an order. There are several types:

• Limit Order — an order at your price. For example: “buy BTC at 60,000.” It waits for its time in the book.
  
• Market Order — a deal “here and now” at the best available price. It’s fast, but may cost more.
  
• Stop-Loss — an order that limits losses: once the price reaches the set level, the position is closed.
  
• Take-Profit — automatic profit-taking when the price reaches the target.
  
• Stop Orders (trigger orders) — are activated only when the trigger price is reached. This is the main parameter that “turns on” the order.
  
  

• Maker — places a limit order and waits. They “make the market” because their order adds liquidity.
  
• Taker — takes someone else’s order from the book. For example, buys at market.
  
  

Example:
If you placed “buy at 60,000 and wait” — you are a maker.
If you clicked “buy now” and took at the seller’s price — you are a taker.

Exchanges have different fees: makers usually pay less, takers more, because makers add liquidity, and it’s beneficial for the exchange to have more orders in the book.

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Liquidity is the ability of an asset to be bought and sold quickly without sharp price jumps. There are different ways to look at it:

• The order book shows the depth of the market. The more money is standing at different levels, the more stable the price looks. But if there are many stop orders in a certain zone, once they trigger, the price can suddenly “shoot” up or down.
  
  
• Trading volume shows how many coins were actually bought and sold in a day or another period. For example: Bitcoin’s daily volume can be tens of billions of dollars — that is high liquidity. But a small altcoin may have only a few hundred thousand, and any large trade will immediately move the price.
  
  

Example:
In a big supermarket you can buy a box of apples — and the price won’t change. In a small shop, if you buy everything, the price for the next buyer will already be different. Same with markets: highly liquid assets allow calm trading, while illiquid ones often see sharp moves.

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Slippage is when a trade is executed at a worse price than planned.
For example, you wanted to buy at 60,000, but there were few orders in the book. While your order was being filled, the price “slid” to 60,050. The difference is slippage.
The lower the liquidity, the higher the chance of slippage.

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A squeeze is a sharp price move up or down when stop orders are triggered en masse.
Imagine the price is moving sideways, and traders have placed stops on both sides. Then comes an impulse — and both the long stops and the short stops are taken out. The price jumps sharply, and traders are left with losses.
Squeezes happen more often where liquidity is low and the order book is “thin.”

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• Spot market — simple trading: you buy a coin — it’s yours; you sell — the money is in your account.
  
  
• Futures — here you trade not the coin, but its price. You can earn both on growth and on decline, use leverage.
  
  

Leverage is the ability to trade with an amount larger than your deposit. The exchange “lends” you capital to increase potential profit. For example, with 10× leverage, having $100, you can open a $1,000 trade.
But along with profit, risk grows: if the price moves against you by just 10%, the deposit is completely gone. This is called liquidation.

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On futures, there is a settlement between traders. It keeps the balance between the contract price and the spot price, so there is no big divergence. Sometimes you pay, sometimes you receive.

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• Candlestick Chart (Japanese candles) — each candle shows movement for the chosen timeframe. Green means growth, red means decline. The body of the candle shows the main movement, the wicks show price extremes.
  
  
• Tick Chart — built not by time, but by the number of trades. For example, a new candle appears every 100 trades. This shows market activity.
  
  
• Timeframe — the scale of the chart: M1, H1, D1. Scalpers use small ones, investors use large ones.
  
  

• Consolidation — sideways movement, the market is “building up strength.”
  
  
• Support & Resistance — zones where price often stops or reverses.
  
  
• Volatility — the strength and speed of price changes.

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Altcoin — any cryptocurrency other than Bitcoin. Examples: Ethereum, Solana, Cardano.

Stablecoin — a coin with a fixed price, most often pegged to the US dollar (USDT, USDC, DAI).

Market Cap — the total value of all coins of a project: price × number of coins in circulation.

Volume — how many coins were bought and sold in a given period. The higher the volume, the more liquidity.

Token — a digital asset issued within a blockchain (for example, ERC-20 tokens in Ethereum).

Coin — a coin that is the “native” currency of a blockchain (BTC, ETH, ADA).

Utility Token — a token used to pay for services within a project.

Security Token — a token that grants rights to a share or profit.

Governance Token — a token that allows voting on project decisions.

Wrapped Token — a version of a coin in another blockchain (for example, WBTC — Bitcoin on Ethereum).

Cross-chain — technology for interaction between different blockchains.

Bridge — a service for transferring coins from one network to another.

Cold Wallet — a wallet without internet access (for example, Ledger).

Hot Wallet — an online wallet. Convenient, but more vulnerable.

Seed Phrase — a set of words to restore access to a wallet.

Private Key — the main key to a wallet. If you lose it or show it, you lose your money.

HODL — a strategy of “buy and hold despite fluctuations.”

ATH (All Time High) — the historical maximum price of an asset.

ATL (All Time Low) — the historical minimum.

Airdrop — free distribution of tokens to users.

Burn — the destruction of tokens to reduce the amount in circulation.

Mining — the process of generating coins using computing power.

Staking — freezing coins for rewards.

Tokenomics — the economics of a token: issuance, burning, rewards, etc.

ICO (Initial Coin Offering) — initial token offering, the crypto equivalent of an IPO for stocks.

IEO (Initial Exchange Offering) — the launch of a coin through a centralized exchange.

IDO (Initial DEX Offering) — the launch of a token through a decentralized exchange (DEX).

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DeFi (Decentralized Finance) — financial services on blockchain without intermediaries: lending, exchanges, staking.

Proof of Work (PoW) — a consensus mechanism through mining (Bitcoin).

Proof of Stake (PoS) — a consensus mechanism through staking (Ethereum 2.0).

Validator — a network participant who confirms transactions in PoS.

Node — a computer that stores the blockchain and participates in its operation.

Hashrate — the network’s computing power in PoW. The higher, the stronger the protection.

Block Reward — a reward for creating a new block.

Halving — an event when the block reward is halved (every ~4 years in Bitcoin).

Layer 1 (L1) — the main blockchain (Bitcoin, Ethereum).

Layer 2 (L2) — solutions for faster and cheaper transactions (Arbitrum, Optimism).

Sharding — splitting the blockchain into parts to increase throughput.

Rollups — technology that bundles transactions and uploads them to the main blockchain.

Atomic Swap — direct exchange of coins between different networks.

Oracles — services that bring external data into the blockchain (for example, asset prices).

Smart Contract — a program in the blockchain that executes automatically when conditions are met.

Gas Fee — a fee for a transaction in the blockchain (especially noticeable in Ethereum).

Liquidity Pool — a pool of coins for swaps on DEX.

Yield Farming — a strategy of earning through liquidity pools and staking.

Impermanent Loss — the risk of losses when providing liquidity to pools.

DEX (Decentralized Exchange) — an exchange without intermediaries (Uniswap, PancakeSwap).

DEX Aggregator — a service that finds the best rates across different DEXs (for example, 1inch).

NFT (Non-Fungible Token) — unique tokens confirming ownership of digital objects.

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Trading and Price Behavior

Bull Market — a long-term rise, the market is “strong.”

Bear Market — a long-term price decline.

Sideways / Flat — the market is moving sideways, without a clear trend.

Pump — a sharp price increase.

Dump — a sharp price drop.

Squeeze — an impulse move that takes out stop orders.

Whipsaw — the market suddenly moves one way, then quickly reverses, taking traders out.

Slippage — a trade executed at a worse price than planned.

ATH (All Time High) — historical maximum.

ATL (All Time Low) — historical minimum.

Rekt — losing a deposit, a complete wipeout.

Overleveraged — a trader who took on too much leverage.

Liquidation — forced closing of a position in futures.

Margin Call — a warning that funds are insufficient to maintain a position.

Scalping — a strategy of quick trades on small timeframes.

Swing Trading — trading on medium-term price moves.

Day Trading — trading within a single day without holding overnight.

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Emotions and Memes

HODL — “hold the coin no matter what.”

FOMO (Fear of Missing Out) — fear of missing out on profit.

FUD (Fear, Uncertainty, Doubt) — fear, uncertainty, and doubt.

Bagholder — someone stuck in a losing coin.

Moon — a strong rise (“the coin goes to the moon”).

Diamond Hands — a holder who doesn’t sell even during a crash.

Paper Hands — an investor who sells too quickly.

BTFD (Buy The Dip) — “buy on the dip.”

Aping — recklessly entering a trade or project.

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Risks and Scams

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Shitcoin — a coin without value, often created for hype.

Ponzi Scheme — a financial pyramid.

Exit Scam — when a project team disappears with investors’ money.

Dusting Attack — sending tiny amounts to track wallets.

Scam — any fraudulent project.

Shill — aggressive promotion of a token for profit.

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‍The crypto market seems chaotic until you begin to understand its language. Each term is like a key: liquidity explains market strength, a squeeze shows its sharpness, while HODL and FOMO remind us of the trader’s psychology.
A glossary turns chaos into a map. And with this map, you are no longer just a tourist in a noisy bazaar, but someone who knows where to buy, where to wait, and where it’s better to walk away.

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