Crypto trading glossary
Short, clear definitions of the terms you meet when automating a crypto trading strategy.
Crypto basics
Trading
Trading pair
Two assets traded against each other, such as BTC/USDT.
Market order
An order that executes immediately at the best available price.
Limit order
An order that only executes at a price you set, or better.
Liquidity
How easily an asset can be bought or sold without moving its price much.
Spread
The gap between the best buy price and the best sell price.
Indicators
Moving average
An average of price over a period that smooths out market noise.
EMA crossover
A signal that appears when a fast average crosses a slower one.
Momentum
The strength and speed of a price move in one direction.
Trend
The dominant direction of price over time.
RSI
Relative Strength Index, a 0 to 100 oscillator that gauges momentum.
Risk management
Stop-loss
An order that closes a position to cap a loss.
Take-profit
An order that closes a position once a target gain is reached.
Position sizing
How much capital you risk on a single trade.
Drawdown
The drop from a capital peak to the following trough.
Leverage
Trading with borrowed capital to increase exposure.