Cryptocurrency Trading 101


Den Silva



Due to the enlargening popularity of cryptocurrency, it has become necessary to develop a epistel guide for trading vaktaal. What goes after is an outline of the basic terminology used by major cryptocurrency exchanges. Virtually all of thesis terms are used te conventional securities trading spil well.

Overheen the last few months, cryptocurrencies have become frantically popular. Anytime there’s a chance to make a quick profit, a fresh generation of speculators crawls out of the woodwork. Unluckily, this means that many are ill-informed. The rash of impatient traders and crypto-novices has driven much of the latest bull market. Spil cryptocurrencies have taken a unexpected swan dive, many have panicked.

Sometimes, it’s raunchy to admit not knowing trading terms. Nobody wants to look foolish ter vuurlijn of their friends. This chunk defines some basic trading terminology of the cryptocurrency ecosystem. Please realize that this guide is directed toward crypto-rookies. That being said, even if you’ve bot trading for a while, maybe it will help pack te a few blanks.

Rather than forsake cryptocurrency speculation altogether, it’s key for newcomers to learn a few tricks of the trade. Preparing one’s self with some financial education may help alleviate losses and hopefully augment gains.

General Terms

Order: an investor’s instruction to a broker or exchange to purchase or sell a specified amount of a cryptocurrency.

Pack: the activity of completing an order.

Order book: an electronic list of buy and sell orders for a specific cryptocurrency.

Brokerage toverfee: the amount charged by an exchange for the service of packing an order (usually a plane rate or a percentage of the order value).

Market order : an order to buy or sell cryptocurrency instantaneously, this ensures that the order will be executed, but does not ensure a certain price since “,slippage”, may occur.

Market capitalization (or “,market cap”,): the total dollar value of a cryptocurrency’s outstanding units, market cap is calculated by multiplying ,total units by the current market price of one unit.

Note: CoinMarketCap provides thesis details for each cryptocurrency.

Trading volume: the number of units of cryptocurrency traded during a designated time period, often measured ter 24-hour increments (weekly and monthly measurements are also common). ,

Note: Unlike securities markets, cryptocurrency markets do not have set open/close times. Ether ,and bitcoin trade 24/7.

Buy Orders

Buy limit order: an order to purchase cryptocurrency at or below a specific price, ,the order may or may not be packed since the market voorwaarde reach the selected price before being executed.

Buy-stop order: an order to purchase cryptocurrency when the market price reaches a specified level above the current suggesting price, if ,the price reaches or exceeds the specified value, then the buy-stop becomes a market order .

Note: This order type may seem bizarre on its face. Traders may use this tactic to take advantage of momentum swings (i.e., “,buy high, sell higher”,). Ter some cases, a buy-stop may be used to protect a brief position.

Sell Orders

Sell limit order: an order to sell cryptocurrency at or above a specific price.

Sell-stop order (aka “,zekering loss order”,): an order to sell cryptocurrency when the market price drops to a specified level, if the price falls to or below the specified value, then the sell-stop becomes a market order .

Note: this is one of the investment/trading strategies which caused suffering for many cryptocurrency holders during the GDAX “,flash crash”, last week.

This plain terminology ought to provide the naked bones for cryptocurrency trading or investment. Of course, there are further intricacies to discuss with regard to margin trading and potential derivatives markets. Nonetheless, this primer may serve spil the very first step ter your cryptocurrency research.

Matthew Den Silva

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