Trading glossary: crypto and stock terms A–Z

Glossary of trading terms

A

Altcoin

Any cryptocurrency other than Bitcoin.

Ask

The lowest price a seller is willing to accept.

B

Bear market

A prolonged decline, commonly defined as a fall of 20% or more from a recent high.

Bid

The highest price a buyer is willing to pay.

Breakout

A move of price through a defined support or resistance level.

Bull market

A prolonged rise in prices and optimism.

C

Candlestick

A chart bar showing the open, high, low and close for a period.

Cold wallet

A crypto wallet that keeps private keys offline.

D

DCA (dollar-cost averaging)

Investing a fixed amount at regular intervals regardless of price.

DeFi

Decentralised finance: financial services run by smart contracts on blockchains.

Dividend

A share of company profits paid to shareholders.

Drawdown

The decline from an account's peak value to its subsequent low.

E

EPS

Earnings per share: a company's net profit divided by its shares outstanding.

ETF

Exchange-traded fund: a basket of assets that trades like a single share.

F

FDV

Fully diluted valuation: a token's price multiplied by its maximum supply.

FOMO

Fear of missing out, an emotional urge to chase a moving price.

Funding rate

Periodic payment between long and short traders on perpetual futures.

G

Gap

A jump in price between one session's close and the next session's open.

H

Halving

The roughly four-yearly cut in new Bitcoin issuance to miners.

HODL

Crypto slang for holding long term rather than trading.

L

Leverage

Borrowed exposure that magnifies both gains and losses.

Limit order

An order to buy or sell at a specific price or better.

Liquidation

Forced closure of a leveraged position when margin runs out.

Liquidity

How easily an asset can be bought or sold without moving the price.

M

MACD

Moving average convergence divergence, a trend and momentum indicator.

Margin

Collateral deposited to open a leveraged position.

Market cap

Total value of a company's shares or a coin's circulating supply.

Market order

An order that fills immediately at the best available price.

Moving average

The average price over a set number of periods, used to show trend.

P

P/E ratio

Share price divided by earnings per share, a valuation measure.

Paper trading

Simulated trading with virtual money.

Position size

How many shares, coins or contracts you hold in a trade.

R

R-multiple

Trade result measured in units of initial risk (1R = amount risked).

Resistance

A price level where selling has repeatedly stopped advances.

RSI

Relative strength index, a momentum oscillator from 0 to 100.

S

Seed phrase

The 12 or 24-word backup that restores a crypto wallet.

Short selling

Selling an asset you have borrowed to profit if its price falls.

Slippage

The difference between expected and actual fill price.

Spread

The gap between the bid and ask price.

Stablecoin

A crypto token designed to track a fiat currency such as the US dollar.

Stop loss

An order that closes a position at a set price to cap losses.

Support

A price level where buying has repeatedly stopped declines.

T

Take profit

An order that closes a position at a target price to lock in gains.

Trailing stop

A stop that moves with price in your favour by a set distance.

V

Volatility

How much and how quickly prices move.

Volume

The number of shares, coins or contracts traded in a period.

VWAP

Volume-weighted average price over a session.

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