Read on for a comprehensive list of common cryptocurrency terms you'll encounter.
Common crypto terms
Blockchain: A distributed ledger technology that records transaction information about a cryptocurrency in a chronological order.
Bitcoin (BTC): The first decentralized digital currency created in 2009.
Ethereum (ETH): Ethereum is a blockchain-based decentralized platform that enables the creation of smart contracts and decentralized applications (DApps). It's the second-largest cryptocurrency by market capitalization after Bitcoin.
OKB: OKB is the global utility token of the OKX exchange. OKB provides trading fee discounts on OKX.
Cryptocurrency: Cryptocurrency is a digital asset that's secured by cryptography and operates independently of a central authority.
Digital asset: A digital asset refers to any asset that exists in digital form, such as cryptocurrencies, digital art, or virtual real estate. It can be traded or transferred digitally, and ownership is recorded on a blockchain or other distributed ledger technology.
Wallet: A software program for securely storing and managing cryptocurrency.
Address: A unique string of letters and numbers used to receive and send cryptocurrency.
Public key: A cryptographic code that allows someone to receive cryptocurrency.
Private key: A cryptographic code that must be kept secret to secure one's cryptocurrency.
Mining: The process of creating new blocks and verifying transactions on a blockchain network.
Hash: A mathematical function used to secure the blockchain by creating a unique representation of data.
Altcoin: Any cryptocurrency other than Bitcoin.
Token: A digital asset created on a blockchain that represents ownership, utility, or asset.
Nodes: Computers on a blockchain network that process and validate transactions.
Decentralization: Decentralization refers to the distribution of control and management among a network of users, rather than being centralized in a single entity like a bank or government. This results in a decentralized system for cryptocurrencies.
Smart contract: Self-executing contracts with the terms of agreement between buyer and seller.
DApp (decentralized application): An application built on a decentralized network using smart contracts.
ICO (initial coin offering): A method of crowdfunding for blockchain-based projects.
FOMO (fear of missing out): The fear of missing out on potential gains from a trade.
HODL (hold on for dear life): A long term investment strategy of holding onto an asset despite market fluctuations.
Market cap: The total value of a cryptocurrency, calculated by multiplying the current price by the circulating supply.
Volatility: The degree of price fluctuation of an asset, usually expressed as a statistical measure of variance.
KYC/AML: KYC (know your customer) and AML (anti-money laundering) are regulatory requirements that trading platforms must comply with. They involve verifying the identity of customers and monitoring transactions for suspicious activity.
Account: Accounts are used to store digital assets. On OKX, there are three types of accounts (funding, trading and grow account).
Common trading terms
Buy order: An order to purchase a specific asset at a specified price.
Sell order: An order to sell a specific asset at a specified price.
Market order: A market order is an order to buy or sell a cryptocurrency at the best available price in the current market.
Limit order: A limit order is an order to buy or sell a cryptocurrency at a specific price or better.
Advanced limit order: An advanced limit order is a type of limit order that includes additional conditions (post only, fill or kill, or immediate or cancel).
Good till cancelled order: Good till canceled orders remain open until they are either filled or cancelled by the trader.
Post only order: Post only orders enter the order book with the user being the market maker. If a post only order matches with an existing order while placing, it will be canceled.
Fill or kill order: A fill or kill order requires the entire order to be executed immediately, or else it will be canceled.
Immediate or cancel order: Immediate or cancel orders must be executed immediately. The order can be partially filled as long as some of the order is filled immediately.
Trailing stop order: A trailing stop order is an order type that automatically deploys an order at a predefined point above or below the current price.
Trigger order: A trigger order is an order that allows the trader to set a target price that must be reached before a limit or market order will be executed.
Volume: The amount of a specific asset that has been traded in a given period of time.
Spread: The spread is the difference between the bid price (the highest price a buyer is willing to pay) and the ask price (the lowest price a seller is willing to accept). A narrow spread indicates high liquidity, while a wide spread indicates low liquidity.
Bid price: The highest price that a buyer is willing to pay for an asset.
Ask price: The lowest price that a seller is willing to accept for an asset.
Fill: The completion of an order, either partially or fully.
Trading fees: Fee charged for each transaction, typically a percentage of the transaction value. Details on OKX fees can be found here.
Maker: A maker is a trader who adds liquidity to the market by placing limit orders on the order book. The limit orders are not immediately filled and instead wait for a taker to match with them. Makers are typically rewarded with lower trading fees as they provide liquidity to the market.
Taker: A taker is a trader who removes liquidity from the market by matching with the limit orders placed by makers on the order book. Takers pay higher trading fees than makers as they consume liquidity from the market.
Trading pair: A cryptocurrency trading pair consists of two cryptocurrencies, such as BTC/USDT, where BTC is the base currency and USDT is the quote currency.
Spot trading: Spot trading is the buying or selling of a cryptocurrency without the use of leverage or other financial instruments.
Margin trading: Margin trading is the buying and selling of cryptocurrency with leverage and borrowing.
Expiry futures: Expiry futures are a type of derivative that allows traders to speculate on the future price of an asset without actually owning the underlying asset.
Perpetual futures: Perpetual futures are a type of derivative that allows traders to speculate on the future price of an asset without actually owning the underlying asset. They are similar to expiry futures except they don't have an expiry date and do have funding fees.
Options: Options are a type of derivative that gives traders the right (but not the obligation) to buy or sell an underlying asset at a specific price, known as the strike price, on or before a specific date.
Trading analysis terms
Technical analysis: The study of price charts and market trends to make predictions about the future performance of an asset.
Indicator: A statistical calculation based on the price and/or volume of an asset, used as a tool for technical analysis.
Support level: A price level where an asset has historically found significant buying interest.
Resistance level: A price level where an asset has historically found significant selling pressure.
Trend: The overall direction of the price movement of an asset, either upwards, downwards, or sideways.
Candlestick chart: A type of chart that's often used in technical analysis to display the price movement of an asset.
Moving average: A trend-following indicator that smooths out price data by calculating the average price over a specified number of periods.
Market depth: Market depth refers to the number of buy and sell orders at different price levels. It can be used to gauge the strength of the market and to determine potential support and resistance levels.
Liquidity: Liquidity refers to how easy it is to buy or sell an asset without affecting its price. High liquidity means there are many buyers and sellers, making it easy to buy or sell an asset without affecting its price. Low liquidity means there are few buyers and sellers, making it difficult to buy or sell an asset without affecting its price.
Trading strategies terms
Long position: A position where an investor holds an asset with the expectation of its price increasing.
Short position: A position where an investor sells an asset with the expectation of its price decreasing, and buys it back at a lower price.
Scalping: A trading strategy where the trader seeks to gain from small price changes through frequent buying and selling.
Swing trading: A trading strategy that involves holding an asset for a longer period of time, with the goal of gaining from larger price movements.
Position trading: A long-term trading strategy that involves holding an asset for an extended period of time, with the goal of gaining from long-term price trends.
Risk management: The process of identifying, assessing, and controlling risks in the trading process.
Take profit and stop loss (TP/SL): Take profit and stop loss is a trading strategy that allows you to "take profit" or "stop loss" by predefining prices. Details on how to use TP/SL can be found here.
Diversification: The practice of spreading investments across a range of assets to reduce the overall risk.
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