Trading Glossary

Copy trading is following one specific trader and using their ongoing published positions, sized proportionally to your own account, as a reference model for your decisions.

Social trading is an approach where traders share ideas and market activity within a social network so others can follow, discuss, and learn from them.

A comparison of two ways to frame following others: copy trading narrows attention to one trader's positions, while social trading treats the surrounding community as the unit of study.

A signal provider is the person or account that authors and publishes trade ideas, as distinct from the ideas themselves.

Trading signals are published ideas or observations, based on analysis, that point to a possible market opportunity for others to study.

Mirror trading is an automated brokerage arrangement in which the buy and sell signals of a predefined strategy or algorithm are executed across participating accounts.

A follower is a user who subscribes to one or more traders' public feeds to read their posts, ideas, and updates as reading material.

Trading reputation is a public measure of a trader's credibility, built over time from their shared activity, consistency, and community standing.

Support and resistance are price levels where a security has historically found buying interest that slows declines or selling interest that slows advances.

An order block is the specific candle range that immediately preceded a strong directional move, which some traders mark to study how price behaves if it returns.

The Relative Strength Index is a momentum oscillator that measures the speed and magnitude of recent price changes on a scale from 0 to 100.

A moving average is a calculation that smooths price data by averaging it over a chosen period, producing a line that updates as new data arrives.

MACD is a momentum indicator that tracks the relationship between two moving averages of a security's price to describe changes in trend strength and direction.

A candlestick chart displays the open, high, low, and close prices for each period as a rectangular body with thin wicks above and below.

Trading volume is the total number of shares, contracts, or units of an asset traded during a given period.

A market trend is the general direction in which the price of an asset moves over a sustained period.

Liquidity is the degree to which an asset can be bought or sold quickly without causing a significant change in its price.

Volatility is a measure of how much and how quickly the price of an asset fluctuates over a given period.

Market capitalization is the total value of an asset's outstanding units, calculated by multiplying the current price by the number of units in existence.

Circulating supply is the number of a cryptocurrency's units that are publicly available and actively tradable in the market at a given time.

A trading pair is two assets quoted against each other, showing how much of the quote asset is needed to buy one unit of the base asset.

Spot trading is buying or selling an asset for immediate delivery at its current market price, giving the buyer direct ownership of the asset.

Perpetual futures are derivative contracts that track an asset's price with no expiry date, using periodic funding payments to stay close to the spot price.

A watchlist is a personalized list of assets a trader groups together to monitor prices, movements, and key data in one convenient view.

Portfolio diversification is the practice of spreading capital across different assets to reduce the impact any single holding has on the overall portfolio.

Risk management is the process of identifying, measuring, and limiting potential losses so that no single trade or event can cause outsized damage to capital.

A stop loss is an order that triggers a sell or buy once an asset reaches a set price, used to limit the potential loss on a position.

A market order executes immediately at the best available price, while a limit order executes only at a specified price or better.

Fibonacci retracement is a charting tool that marks potential support and resistance levels using horizontal lines drawn at key percentages of a prior price move.

Bollinger Bands are a volatility indicator consisting of a moving average with an upper and lower band placed a set number of standard deviations away from it.

A trendline is a straight line drawn across two or more price points on a chart to help visualize the direction and slope of a trend.

A breakout is when price moves decisively beyond an established support or resistance level, which traders watch as a possible change in market behavior.

A chart pattern is a recognizable formation created by price movement that technical analysts study when interpreting possible market behavior.

Momentum measures the speed and strength of a price move, helping analysts assess whether a trend is gaining or losing force.

Overbought and oversold describe conditions in which an asset may have risen or fallen sharply enough that momentum indicators flag a possible stretch in price.

Divergence is when price and a technical indicator move in opposite directions, which analysts study as a possible sign of a weakening trend.

A moving average crossover is when two moving averages of different lengths cross on a chart, a pattern analysts study for possible shifts in trend.

An altcoin is any cryptocurrency other than Bitcoin, spanning thousands of coins and tokens with widely varying designs and purposes.

A stablecoin is a cryptocurrency designed to hold a steady value by tracking a reference asset such as a national currency.

The bid-ask spread is the difference between the highest price buyers offer and the lowest price sellers accept for an asset at a given moment.

An order book is a real-time list of outstanding buy and sell orders for an asset, organized by price and quantity.

Slippage is the difference between the price a trader expects for an order and the price at which the order is actually filled.

Leverage is the use of borrowed funds to gain market exposure larger than a trader's own capital, magnifying both gains and losses.

Margin is the collateral a trader deposits to open and maintain a leveraged position, serving as a good-faith deposit against potential losses.

A long position aims to benefit from a rising price, while a short position aims to benefit from a falling price.

Dollar-cost averaging is the practice of investing a fixed amount at regular intervals regardless of price, spreading purchases over time.

Fully diluted valuation estimates what a crypto asset would be worth if its entire eventual token supply were in circulation at the current price.

A trading course is a structured set of educational lessons that teach market concepts, analysis methods, and risk practices to people who want to understand trading.

A trading bot is a software program that applies a predefined set of rules to market data, typically to analyze conditions or generate signals based on that logic.

A technical indicator is a mathematical calculation based on price, volume, or open interest that traders use to study patterns and conditions in a market.

Backtesting is the process of applying a trading strategy or set of rules to historical market data to study how that approach would have behaved in the past.

Paper trading is the practice of simulating trades with virtual funds in current market conditions, letting a person test ideas and workflows without risking real money.

A trading journal is an organized record of a person's trades and the reasoning behind them, used to review decisions and study patterns in behavior over time.

Drawdown is the decline in value from a peak to a subsequent low in an account, strategy, or asset, usually expressed as a percentage of the peak.

The risk-reward ratio compares the amount a trader risks losing on a position to the amount they could potentially gain, helping frame a trade before entering it.

Position sizing is the process of deciding how much capital to commit to a single trade, usually based on a defined level of risk rather than on conviction alone.