The terms every trader should know.

Trading via pre-programmed rules that execute without manual intervention — covers high-frequency, market-making, and statistical-arbitrage strategies.

Automated market maker — a smart contract that prices trades algorithmically against a liquidity pool, replacing the order book.

The lowest price a seller is willing to accept for an asset. Paired with the bid; the difference is the spread.

A prolonged decline in prices, typically defined as a drop of 20% or more from recent highs across major indices.

A measure of a stock's volatility relative to the overall market. Beta > 1 means more volatile than market; < 1 means less.

The highest price a buyer is willing to pay for an asset. Paired with the ask.

A large, well-established company with a history of reliable performance and often dividends.

A volatility indicator plotting standard deviations above and below a moving average.

An intermediary who executes buy and sell orders for clients in financial markets.

A sustained period of rising asset prices, typically 20% or more from a recent low.

A long-horizon strategy of owning assets through volatility rather than timing entries and exits.

A chart element showing open, high, low, and close for a given period. Green = up, red = down.

An automatic trading halt triggered by extreme market moves to prevent panic selling.

A crypto wallet that stays offline — hardware devices or paper backups. Safer from hacks, slower to use.

A statistical measure of how two assets move relative to each other. +1 = perfect together; -1 = perfect opposite.

Opening and closing all positions within a single trading session — no overnight exposure.

Buying fixed amounts at regular intervals regardless of price, smoothing entry timing risk over many purchases.

Decentralized finance: lending, borrowing, and trading on blockchain protocols without intermediaries.

A payment from a company to its shareholders, typically issued quarterly from profits.

A monetary-policy stance favouring lower interest rates to support growth, even at the cost of higher inflation.

The peak-to-trough decline of an asset or portfolio over a specific period.

A company's net profit divided by outstanding shares. A core profitability metric.

Earnings before interest, taxes, depreciation, and amortisation — a common operating-cashflow proxy.

Exchange-traded fund: a basket of assets (stocks, bonds, commodities) that trades like a single stock.

The Federal Open Market Committee — the Fed's policy arm that sets US interest rates.

The global market for trading currencies, open 24/5, the most liquid market in the world.

Cash a business generates after capital expenditures. Drives dividends, buybacks, and debt reduction.

Valuing an asset by examining its underlying economics — earnings, revenue, macro conditions.

The transaction cost paid to a blockchain network to process a trade or contract call. Denominated in the chain's native coin.

Gross domestic product: the total value of goods and services produced in a country.

An order that stays active until filled or manually cancelled. Opposite of day orders, which expire at session close.

A billionth of an ether — the standard unit for quoting Ethereum gas fees.

A pre-scheduled cut to the rate at which new Bitcoin is mined, occurring every 210,000 blocks (≈ four years).

A monetary-policy stance favouring higher interest rates to fight inflation, even at growth's cost.

Taking an opposite position to offset risk in another holding. Bounds downside at the cost of capping upside.

Crypto slang for holding through volatility instead of trading. Originally a typo of 'hold'.

A crypto wallet connected to the internet — mobile apps, exchange accounts. Convenient but more exposed to hacks.

The loss a liquidity provider takes versus simply holding when the deposited assets diverge in price.

The rate at which the general price level of goods and services rises, eroding purchasing power.

Borrowed capital used to increase position size — amplifies both gains and losses.

An order to buy or sell only at a specified price or better. Price control but no execution guarantee — may sit unfilled.

How quickly an asset can be bought or sold without significantly affecting its price.

A smart contract holding paired assets that traders swap against. Providers deposit and earn fees.

Owning an asset expecting price to rise — profit on appreciation.

Moving Average Convergence Divergence — a momentum indicator showing the relationship between two moving averages.

Borrowed funds from a broker used to trade. A margin call demands more capital when positions move against you.

Share price multiplied by outstanding shares. The total market value of a company.

An order to buy or sell immediately at the best available price. Fast but no price control — slippage can hurt on illiquid assets.

The largest peak-to-trough loss a portfolio has ever experienced. A useful tolerance check before sizing positions.

A trading style that bets on extremes — buying oversold, selling overbought — assuming prices revert to a long-term average.

Validating blockchain transactions in exchange for newly minted coins plus fees. Used by Proof-of-Work chains like Bitcoin.

A trading style that buys recent winners on the thesis that trends persist over short horizons.

Non-Farm Payrolls — the monthly US jobs report that often moves markets.

Non-fungible token: a unique cryptographic asset representing ownership of a specific item.

An order that only executes part of the requested size at the requested price. Common on limit orders against thin books.

Price-to-earnings ratio. Share price divided by EPS. A common (but imperfect) valuation metric.

The smallest unit of price movement in forex — typically the fourth decimal place (or second for JPY pairs).

The full collection of investments held by an individual or institution.

Choosing how much capital to allocate to a single trade or asset. Most traders underestimate this lever.

A long-horizon style that holds for months to years on fundamental or macro theses.

An organised manipulation that inflates a token's price on hype, then dumps on followers. Common in low-cap crypto.

Central-bank policy of buying assets to inject liquidity and lower long-term rates.

A significant decline in economic activity lasting more than a few months. Commonly defined as two consecutive quarters of negative GDP.

Potential gain divided by potential loss on a trade. 2:1 means risking $1 to make $2.

Return on investment — net gain divided by cost, expressed as a percentage.

Relative Strength Index — a momentum oscillator (0–100). Above 70 = overbought, below 30 = oversold.

A scam where developers abandon a project after raising funds, leaving holders with worthless tokens.

A high-frequency style aiming for small profits on many trades, often within seconds to minutes.

A 12–24 word backup that can reconstruct a wallet's private keys. Lose it and you lose access; share it and you lose funds.

A risk-adjusted return metric: excess return divided by volatility. Higher = better return per unit of risk.

Borrowing an asset to sell now and buy back later — profit on declines.

Borrowing an asset to sell now and buy back later at a lower price — profiting from price declines.

The difference between expected price and actual fill price, usually worse on volatile or illiquid assets.

Self-executing code on a blockchain that runs when conditions are met. Powers DeFi, NFTs, and DAOs.

A central-bank policy outcome where rate hikes slow inflation without triggering recession.

The difference between the bid and ask price. Tighter spreads = more liquid markets.

A cryptocurrency pegged to a stable asset like the US dollar (e.g., USDC, USDT).

Locking crypto to help secure a Proof-of-Stake network in exchange for yield.

A stop order that converts to a limit (not market) once triggered. Avoids slippage but may not fill in fast moves.

An order that automatically closes a position when price reaches a specified level, limiting losses.

An order that becomes a market order once a trigger price is hit. Used to cap losses or enter on momentum.

Price levels where an asset tends to find buyers (support) or sellers (resistance).

Holding positions for days to weeks to capture intermediate price swings.

An order that automatically closes a winning position at a target price.

Analysing price action and chart patterns to forecast future moves, distinct from fundamentals.

A stop order that follows the price up by a fixed amount or percentage, locking in gains as it climbs.

The dollar value of crypto held in a DeFi protocol's contracts. A common health and scale metric.

CBOE Volatility Index — the 'fear gauge' of US equities, derived from S&P 500 options.

The degree of price variation over time. Higher volatility = larger swings, more risk and opportunity.

Software or hardware that stores the private keys controlling crypto. Custody = control.

A holder large enough to move prices with single trades. Their on-chain moves are often tracked publicly.

Income return on an investment, expressed as a percentage of cost or current price.

A line plotting yields of bonds with different maturities. Inverted curves often precede recessions.

Moving crypto across DeFi protocols to capture incentive rewards. High yield, high smart-contract risk.