ATH
All-Time High. is the highest price level that particular cryptocurrency has ever been traded at.
BTFD
Buy the Fucking Dip, rule introduced in trading, especially during bull market that tells to use any price decline (usually 10-30%) to increase exposure (buy) cryptocurrencies.
DCA
Dollar Cost Averaging, is a strategy that allows an investor/trader to buy the particular dollar amount of an cryptocurrency in regular intervals. The purchases occur regardless of the asset’s price, it is a tool an investor/trader can use to build position over a period of time. It is simple way to neutralize short-term volatility, and avoid ‘guessing’ the exact low/high.
DEX
Decentralized Exchange, is a cryptocurrency exchange that does not rely on a third-party service to hold the traders funds. Instead, cryptocurrency exchange occur directly between users (peer-to-peer) through an automated process. It can be established by creating proxy tokens (cryptoassets that represent a certain fiat or cryptocurrency) or through a decentralized multi-signature escrow system, among other solutions.
DYOR
Do Your Own Research
FOMO
Fear of Missing Out
FUD
Fear Uncertainty Doubt
HFT
High Frequency Trader
HODL
Hold your coin long-term
ICO
Initial Coin Offering
MACD
Moving Average Convergence Divergence
POS
Proof of Stake
POW
Proof of Work
REKT
A complete loss on a trade or a portfolio
TA
Technical Analysis
ALTCOIN
Any coin that isn’t Bitcoin
BART
A chart pattern that looks like Bart Simpson Head
FIBS
Fibonacci levels
KEYS
Cryptographic keys to secure your crypto wallet, a string of data that is used to lock or unlock cryptocurrency wallet, including authentication, authorization and encryption.
Moon: When bitcoin takes off to a price somewhere in the six figures
Weak Hand: Traders who panic sell at the first sign of trouble
Whale: Investors and Traders with large accounts
Definitions:
Fundamental Analysis: This method of investing relies on finding a solid stock based on the underlying ‘value’ or financial structure of an asset. What goes into
Technical Analysis: This method is common to ‘traders.’ It uses a combination of statistics, indicators, chart patterns, support & resistance lines along with price targets. The most common tools used include Bollinger Bands, Stochastics, volume signals and candlesticks. Traders uses patterns and signals as a predictor of sorts. The belief is that the past can be an indicator of the future and they use the patterns and signals to ‘play the odds.’
Bear Market – A period of time where the prices of assets or securities fall. It becomes official when prices fall 20% or more from their 52-week high over a time frame of at least two months. It is generally a sign that confidence is low and many investors/traders begin to sell. That fuels a self-perpetuating negative cycle of more selling and downward trends. A bear market should not be confused with a Correction; which is a 10% decrease. Bullish traders should note to be careful of a Bear Market Rally.
Bull Market – A bull market is a 20% rise in prices and it occurs after a 20 percent decline but before another 20% decline. It is a time of high confidence in assets and as such the value trends upward. Typically, they end when exuberance reaches a tipping point where prices exceed the underlying value. Bull markets are difficult to predict and are generally discovered once they have already begun.
Golden Cross: This is a bullish signal that occurs when a short term moving average crosses over a long term moving average. Generally, they are followed with high volume indicators.
Example: Bitcoin from late October 2015. The last instance of a golden cross, occurred around $295 USD
Death Cross: This is a bearish signal that occurs when a short-term moving average crosses under a long term moving average.
Example: The most recent example with Bitcoin was in late March of 2018 at a price of $6,880 USD
The two most commonly used averages for these signals are the 50 day and 200 day moving averages. It should be noted that research is limited in the effects of both crosses. In particular in the short-term (30 days) after one occurs results are minimal. However, in the 12-month period after, results are generally strong.
Support: The support is a lower trendline where a price tends to get rejected and turns upward. If price breaks through and continues, it will signal a trend change and the prior support will now become a resistance.
Resistance: The resistance line is an upper trendline where a price tends to stay or gets rejected downward. If price breaks through and continues it will signal a trend change and the prior resistance line will now become a support.
Bull Trap: Price is showing a strong breakout from a resistance level. Breakout traders jump in only to find that the volume couldn’t sustain the upwards move, the shorts take control and price falls back into the resistance zone. Traders looking long are “trapped” as the price returns lower
Bear Trap: A breakdown in price entices traders to place shorts on the stock only to find that bulls bid up the price or keep the asset flat. In a similar way, the bearish trader is trapped – the difference being that unless the short is covered the loses could theoretically be infinite.
Stop Limit: A Stop Limit works in a manner that combines the specific price of a limit order with the triggering mechanism of a stop loss. A stop limit will execute an order once the price of a security reaches the specified amount the trader entered – though the price entered is usually higher than the current market price (as opposed to lower than the market price with a limit order). The benefit of a Stop Limit is to catch a price movement on a breakout. An example would by at the 3% increase to confirm a pattern. A downside would be setting one and being caught in a fake breakout of a bull trap.
Trailing Stop Loss: A trailing stop loss works in a similar fashion to a traditional stop loss except that it triggers based on one of two criteria that you choose: percentage or monetary decrease. A trailing stop loss will move in conjunction with the current market price. If the price continues to move up the stop loss will follow by the amount the trader specified. If the price falls back, the stop loss will stay in place and trigger if the price falls below. The benefit of this is that it allows a trader to lock in unrealized gains as a security moves up and exit a position by protecting capital as a normal stop loss would. The danger is setting the trailing stop too tight in a volatile asset.
Falling Knife: This is where an asset suffers a sharp selloff and price rapidly begins to fall. This is a dangerous time for traders and investors – either the holder of the asset or someone who had been watching and was looking for a time to get in. Even when it seems that the decline has stopped, some traders try to catch the bounce, but if you hold it too long, price may still be on the decline. The saying goes, that a falling knife is only safe once it is resting on the floor.
Torpedo Stock: This is where an asset is rapidly losing market value and has suffered significant damage in the eyes of traders and investors. There can be any number of underlying causes for why an asset would collapse: poor management, paradigm shift in the industry, bankruptcy, etc. Whatever the case, you don’t want to be holding the bag on this. The name originates from the way a ship would sink upon being struck by a torpedo. A current example is $HMNY – the parent company of MoviePass.
Wash Sale: Under IRS rules, a wash sale occurs when an investor sells an asset at a loss and in a relatively short time frame after that buys back a similar asset. The time frame is generally 30 days. This is to prevent investors who try to claim a loss for tax purposes but then try to buy back the asset at a low price. Remember you must hold an asset for at least one year to claim a loss for tax purposes.
Average True Range Indicator: This is used by some traders a measure of volatility in a particular commodity or stock and a tool used to execute stop losses and profit targets. Most traders who use the ATR adhere to the 3:1 profit-to-risk rule. They utilize the ATR when the indicator begins to spike by measuring the current level and multiply it by three: that is the profit unit. That same level is utilized at a multiple of one for the stop loss.
Detrended Price Oscillator: (This is a favorite of Bob Loukas) The DPO is designed to remove trend from price. The purpose is to find cycle highs, cycle lows and potential duration of the cycle. The way the oscillator works is by measuring a simple moving average against past prices. You will notice in TradingView that the oscillator is offset to the left to help you remove price and analyze date in the state of the cycle. – (I will encourage Bob to explain how he uses it in his next video)
Basis Points: A basis point is the smallest unit of measurement in investing. 1% is equal to 10 basis points. The equivalent in Crypto is Satoshi’s. The key difference with Satoshi’s is that they can be broken down as a far as one hundred millionth 0.00000001 whereas Basis Points only break down to thousands .01
Price Action: Price Action is as much art as it is science. It is about reading the price change of an asset in relation to prior candlestick movements and how it relates to support and resistance. While it is often described as a form of technical analysis, it really is a skill in-and-of itself.
Exponential Moving Average: The exponential moving average places a greater emphasis on the recent price movements of an asset. For example, the 9 Day EMA puts more weight on the 8th and 9th days in the average in relation to the movement of price. It is very reactive to price movements and traders who like to employ price action as a primary strategy often use it for spotting ideal entries.
Acronyms:
ATH: All-Time High
BTFD: Buy the Fucking Dip
DCA: Dollar Cost Averaging
DEX: Decentralized Exchange
DYOR: Do Your Own Research
FA: Fundamental Analysis
FOMO: Fear of Missing Out
FUD: Fear Uncertainty Doubt
HFT: High Frequency Trader
HODL: Hold your coin long-term
ICO: Initial Coin Offering
MACD: Moving Average Convergence Divergence
PoS: Proof of Stake
PoW: Proof of Work
REKT: A complete loss on a trade or a portfolio
TA: Technical Analysis
XRP: Ripple’s token – otherwise known as ‘zerp’ coin
Slang:
Altcoins: Any coin that isn’t Bitcoin
Bart: A chart pattern that looks like Bart Simpson
Fibs: Fibonacci levels
Keys: Your crypto keys to secure your hardware wallet
Leverage: Trading on margin, using a loan to increase your buying power.
Long: Buying for bullish moves
Moon: When bitcoin takes off to a price somewhere in the six figures
Short: Trading for bearish moves
Wallet: Your crypto wallet
Weak Hand: Traders who panic sell at the first sign of trouble
Whale: Investors and Traders with large accounts
