Trading glossary
Trading Glossary
Plain-English definitions of trading and market terms — from copy trading and technical indicators to risk and market concepts.
- Copy TradingCopy 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 TradingSocial trading is an approach where traders share ideas and market activity within a social network so others can follow, discuss, and learn from them.
- Copy Trading vs Social TradingA 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.
- Signal ProviderA signal provider is the person or account that authors and publishes trade ideas, as distinct from the ideas themselves.
- Trading SignalsTrading signals are published ideas or observations, based on analysis, that point to a possible market opportunity for others to study.
- Mirror TradingMirror trading is an automated brokerage arrangement in which the buy and sell signals of a predefined strategy or algorithm are executed across participating accounts.
- Follower / CopierA follower is a user who subscribes to one or more traders' public feeds to read their posts, ideas, and updates as reading material.
- Trading ReputationTrading reputation is a public measure of a trader's credibility, built over time from their shared activity, consistency, and community standing.
- Support and ResistanceSupport and resistance are price levels where a security has historically found buying interest that slows declines or selling interest that slows advances.
- Order BlockAn 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.
- RSI (Relative Strength Index)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.
- Moving AverageA 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.
- MACDMACD 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.
- Candlestick ChartA candlestick chart displays the open, high, low, and close prices for each period as a rectangular body with thin wicks above and below.
- Trading VolumeTrading volume is the total number of shares, contracts, or units of an asset traded during a given period.
- Market TrendA market trend is the general direction in which the price of an asset moves over a sustained period.
- LiquidityLiquidity is the degree to which an asset can be bought or sold quickly without causing a significant change in its price.
- VolatilityVolatility is a measure of how much and how quickly the price of an asset fluctuates over a given period.
- Market CapitalizationMarket 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 SupplyCirculating supply is the number of a cryptocurrency's units that are publicly available and actively tradable in the market at a given time.
- Trading PairA 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 TradingSpot trading is buying or selling an asset for immediate delivery at its current market price, giving the buyer direct ownership of the asset.
- Perpetual FuturesPerpetual 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.
- WatchlistA watchlist is a personalized list of assets a trader groups together to monitor prices, movements, and key data in one convenient view.
- Portfolio DiversificationPortfolio diversification is the practice of spreading capital across different assets to reduce the impact any single holding has on the overall portfolio.
- Risk ManagementRisk management is the process of identifying, measuring, and limiting potential losses so that no single trade or event can cause outsized damage to capital.
- Stop LossA 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.
- Market Order vs Limit OrderA market order executes immediately at the best available price, while a limit order executes only at a specified price or better.
- Fibonacci RetracementFibonacci 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 BandsBollinger 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.
- TrendlineA 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.
- BreakoutA breakout is when price moves decisively beyond an established support or resistance level, which traders watch as a possible change in market behavior.
- Chart PatternA chart pattern is a recognizable formation created by price movement that technical analysts study when interpreting possible market behavior.
- MomentumMomentum measures the speed and strength of a price move, helping analysts assess whether a trend is gaining or losing force.
- Overbought and OversoldOverbought and oversold describe conditions in which an asset may have risen or fallen sharply enough that momentum indicators flag a possible stretch in price.
- DivergenceDivergence is when price and a technical indicator move in opposite directions, which analysts study as a possible sign of a weakening trend.
- Moving Average CrossoverA moving average crossover is when two moving averages of different lengths cross on a chart, a pattern analysts study for possible shifts in trend.
- AltcoinAn altcoin is any cryptocurrency other than Bitcoin, spanning thousands of coins and tokens with widely varying designs and purposes.
- StablecoinA stablecoin is a cryptocurrency designed to hold a steady value by tracking a reference asset such as a national currency.
- Bid-Ask SpreadThe 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.
- Order BookAn order book is a real-time list of outstanding buy and sell orders for an asset, organized by price and quantity.
- SlippageSlippage is the difference between the price a trader expects for an order and the price at which the order is actually filled.
- LeverageLeverage is the use of borrowed funds to gain market exposure larger than a trader's own capital, magnifying both gains and losses.
- MarginMargin is the collateral a trader deposits to open and maintain a leveraged position, serving as a good-faith deposit against potential losses.
- Long vs ShortA long position aims to benefit from a rising price, while a short position aims to benefit from a falling price.
- Dollar-Cost AveragingDollar-cost averaging is the practice of investing a fixed amount at regular intervals regardless of price, spreading purchases over time.
- Fully Diluted ValuationFully diluted valuation estimates what a crypto asset would be worth if its entire eventual token supply were in circulation at the current price.
- Trading CourseA 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.
- Trading BotA 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.
- Technical IndicatorA technical indicator is a mathematical calculation based on price, volume, or open interest that traders use to study patterns and conditions in a market.
- BacktestingBacktesting 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 TradingPaper 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.
- Trading JournalA 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.
- DrawdownDrawdown 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.
- Risk-Reward RatioThe 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 SizingPosition 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.
Glossary content is educational and is not personalized financial advice. Markets involve risk, including the possible loss of capital.