Before you learn to trade it is important to familiarise yourself with the various terminolagies, here are a few of the most important terms and explanations.
Bitcoin = 100 million Satoshis 1 million bits
Exchange- A market place which permits buying and selling of bitcoin and various other coins.eg Binance, ku coin coinbase etc
FOMO-Fear of missing out on a trade, a common mistake made by all beginers, entering a trade without doing propper research in the fear of missing prifits.
Total supply - The amount limit of coins that will ever exist.
Bull- Is someonbe execting the market price to go higher, bear is the opposite. A bull market is where the prices are seing a continuous uptrend leading to new hights being created ,usually when new investors enter a market.
Bear market, is where there is a long term downtrend leading to a sell off.
Bubble - A situation where the prices are irationaly high as compared to the actual value of the asset.
FUD-Fear uncertanty and doubt
Day trading-Taking a position in the market,either buy or sell and exiting in the same day.
Swing trading-This method looks for buying and seling possitions in a weekly range. Swing traders make two to three trades a week.
Positional Trading - The idea is to buy monthly lows and hold them for days, weeks and even months. This is a longer term trading period.
Leverage - refers to the extra amount assist bought or sold over your capital limit eg: if you by $2000 of bitcoin with a capitial of a $1000 you have a leverage of 2x.
Margin - The amount of funds required to open a leverage trade eg: if you want to open a position of a $1000 with a leverage of 5x your margin requirement would be $200.
$200 x 5 =$1000
Long Position - This is a by position buy with leverage eg: if you have $1000 as capital you could buy $2000 with a bitcoin with leverage or even more. Both profit and loss in this case is multiplied by the leverage you take. Eg: a 10% rice/fall in price in case of a long position with 2x leverage will lead to 20% profit or 20% loss.
Short Position - Exact opposite of long entry. You enter a short entry when you expect the prices to fall.
Shorting allows you to make money in a bare market.
Volatility - It is a percentage movement in price of a asset over a period. A balance volatile asset gives ample opportunity to short and long. Traders look for predictable volatility. A very high volatile or low volatile asset isn't concidered good for trading.
Roe - means return on equity. This is calculated by the actual capital employed in a trade and not through leverage. OHLC - Open, High, Low and close.
Altcoin - All coins except bitcoin.
Bulltrap - a technique used by market makers to buy a huge amount suddenly, spiking the price, this makes everyone else think that this is a breakout and everyone buys. The market makers than sell enormous amounts pushing the price down, in turn liquidating everyone else that had bought, producing a cascading effect on liquidations.
Bear Trap - Is just the opposite of the above for making the price go higher in the end.
Ask/Bid - Sell orders are asks and buy orders are bids.
Spread - The difference between what the sellers are ready to sell at and what the buyers are ready to buy at.
There always exists a small spread on all exchange, the higher the liquidity, the lower the spread.
Support and resistance - A support is a zone/line where we can expect the price to bounce back up. Resistance is a line/zone where we can expect the price to rebound downwards.
Walls - Extremely large orders at a range.
Demand Zone - A zone with huge buy orders. This is determined through the heat map.
Supply Zone - A zone with huge sell orders. This is determined through the heat map.
Stop-loss: Order that is triggered when the price goes below this point. Used to cut losses.
Liquidity - The measure of how actively the coin is being traded in the market.
A high liquidity coin/exchange has many buyers and sellers at the same time, making it easier to acquire or sell the coin at any time.
Uptrend - A price is said to be in an uptrend when it is making higher highs and higher lows. It can be confined in a channel.
Downtrend - Opposite of uptrend, the prices here make lower highs and lower lows.
Consolidation - A period where the price is ranging in a well- defined region. This is a period of indecision and generally leads to a volatile in either directions.
Correction - A correction is a fall in price after making a new peak or an upwards rally. Many authors define the correction as 10% drop from all time high but its arbitrary.
Sideways market - an indecisive market which isn't leading to a breakdwon or a Breakout, and not giving any signals in either way.
Sell off - Profit taking after the rally in price, which leads to lowering of price of the asset.
Rally - An upward trend leading to increase in price of the asset. Can happen in both bear and bull market.
Accumulation: the process by which one builds a position in an asset.
Pattern - A chart pattern is a predefined shape that have been historically studied by technicians. Traders try to use previous performance statistics to predict future price movements.
Eg: A head and shoulders top is considered bearish.
Fractal: A pattern of Price movement which has occurred earlier and might occur again.
Limit Order: Order will execute at a predefined price, if the market reaches that price.
Market order: An order to buy or sell at the current price level, executed immediately.
Time Period/Time Frame - The time spread of each candle stick in a chart.
Common time periods are 15 min, 30min, 1 Hour, 4 Hour, Daily and so on.
ATH - All time high prices.
Average Down: Trying to lower the average entry cost of a position by slowly buying the asset at reducing rates.
Liquidation - When you are stopped out of your position because the trade went in the opposite direction and your margins are not big enough to carry the trade anymore.
Arbitrage: A method of making profit using the pricing difference between exchanges
Eg: If bitcoin is trading a $10,000 on Bitstamp and $10,100 on Bitfinex, People will buy from Bitstamp and sell on Bitfinex.