Glossary

101 terms from the school, in one place.

Search terms

Address poisoning: Sending a tiny transaction from a similar-looking address so that the victim later copies it from the history. Security First
ADX: An indicator between 0 and 100 that measures how directional the movement is, but not in which direction. Indicators Without the Magic
Airdrop: Distribution of tokens to addresses. It can be genuine, but it is a common bait for a scam. Security First
Anchoring: Relying too heavily on an earlier number, such as a historical high or a purchase price, as the yardstick for a decision. Psychology and Discipline
API key: Access through which a program works with an exchange account, with the permissions the user sets. Withdrawal permission must not be enabled. Your system
Approval: A permission for a smart contract to take a certain token from your address, up to a set or unlimited amount. Security First
ATR: The average of true ranges. It measures the width of movement, not direction. Indicators Without the Magic
Backtesting: Applying rules to past data, with costs and without look-ahead. Your system
Block explorer: A website for publicly searching the transactions, addresses and blocks of a network. Crypto-asset Fundamentals
Blockchain: A shared ledger of transactions with many copies, in which blocks are linked by fingerprints. Crypto-asset Fundamentals
Breakout: The price crossing a level, usually confirmed by a candle closing beyond it. Reading a Chart
Candle: A display of one period with four prices: open, high, low and close (OHLC). Reading a Chart
CASP: A crypto-asset service provider, within the meaning of the MiCA regulation. Exchanges and Orders
CEX: Centralised exchange: a company that runs accounts and the order book and usually holds clients’ assets. Exchanges and Orders
Circulating supply: The number of tokens that can currently be traded. Fundamentals and on-chain
Confirmation bias: The tendency to seek out and accept only the information that supports what you already think. Psychology and Discipline
Correlation: A measure of how closely two prices move in step. In sudden drops in the crypto market it often rises. Risk Management
Cost basis: The amount paid for an asset, usually together with the related costs, used as the basis for calculating the difference when selling. Your system
Daily loss limit: A loss set in advance, after which you do not trade any more that day. Psychology and Discipline
DCA: Regular buying of the same amount at equal time intervals, whatever the price. Your system
DEX: Decentralised exchange: smart contracts through which a user swaps tokens from their own wallet. Exchanges and Orders
Divergence: A disagreement between price and an indicator, e.g. a higher price high with a lower RSI high. Indicators Without the Magic
Drawdown: The fall of an account from its highest balance so far, usually expressed as a percentage. Risk Management
EMA: Exponential moving average, with the coefficient k = 2 / (period + 1). It gives more weight to recent prices. Indicators Without the Magic
Emission: The creation of new tokens, for example as a reward for mining or staking. Fundamentals and on-chain
Exchange flow: The movement of coins to addresses estimated to belong to an exchange, which does not necessarily mean selling. Fundamentals and on-chain
Expected value: The average outcome per order: hit rate × win − miss rate × loss. Risk Management
False breakout (fakeout): A crossing of a level after which the price quickly returns, often with only the wick of a candle. Reading a Chart
Fear of missing out (FOMO): Pressure to enter a position because others seem to be making money, usually after the price has already risen. Psychology and Discipline
Fixed risk: A rule under which every order risks the same percentage of the current account. Risk Management
Fully diluted valuation (FDV): The price multiplied by the max or total supply. It shows the scale of future supply and is not a forecast of value. Fundamentals and on-chain
Funding fee: A periodic payment between buyers and sellers on perpetual contracts. Risk Management
Gas: A measure of computation on Ethereum and similar networks, paid for in that network’s coin. Crypto-asset Fundamentals
Halving: A cut of the miners’ reward by half, which for Bitcoin happens every 210,000 blocks. Crypto-asset Fundamentals
Hash: A short string of characters calculated from data. Even a small change to the data produces a completely different hash. Crypto-asset Fundamentals
Higher low: A low that is above the previous low. The last such low is often the invalidation level for a plan that assumes a rise. Reading a Chart
Honeypot: A token that can be bought but that ordinary users cannot sell, or can sell only at a huge cost. Security First
Indicator: A formula applied to past prices that produces a new line or number. It summarizes; it does not predict. Indicators Without the Magic
Invalidation level: The price at which the plan no longer holds. In the portal's scenario A it is the lower level. Indicators Without the Magic
KYC: Verification of a client’s identity, which regulated providers carry out because of anti-money-laundering rules. Exchanges and Orders
Leverage: The ratio of position size to the margin put up. Risk Management
Limit order: An order with the worst acceptable price, which may not be executed. Exchanges and Orders
Liquidation: The forced closing of a leveraged position when the margin no longer covers the loss. Risk Management
Liquidity: The ability to trade a substantial quantity quickly without moving the price much. Exchanges and Orders
Look-ahead bias: A test error in which a decision uses data that was not yet known at that moment. Your system
MACD: The difference between EMA12 and EMA26, with a signal line (the EMA9 of that difference) and a histogram. Indicators Without the Magic
Maker and taker: A maker adds an offer to the book, and a taker takes an existing one. A taker is usually more expensive. Exchanges and Orders
Market capitalization: The token price multiplied by the number of tokens in circulation. Fundamentals and on-chain
Market structure: The sequence of highs and lows from which a rise, a fall or sideways movement is read. Reading a Chart
Mean reversion: An approach that expects the price to return toward its average level after an excessive move. Your system
Mempool: The waiting room for transactions that have not yet been included in a block. Crypto-asset Fundamentals
MiCA: The EU regulation on markets in crypto-assets, which among other things governs issuers and service providers. Exchanges and Orders
MVRV: The ratio of a network’s market value to its realized value, a rough picture of average unrealized profit. Fundamentals and on-chain
Order book: A list of buy and sell offers by price level. Exchanges and Orders
Out-of-sample set: The part of the data that is not used while developing the rules, but only for the final check. Your system
Outcome bias: Judging the quality of a decision by its result rather than by whether it was good at the time it was made. Psychology and Discipline
Overfitting: Fitting a rule too closely to old data, so that its result falls apart on new data. Indicators Without the Magic
Overtrading: Opening more orders than the system gives real opportunities for, often out of boredom or excitement. Psychology and Discipline
Panic selling: Exiting a position under pressure from fear, without a rule written in advance. Psychology and Discipline
Pattern: A recognisable shape on a chart, for example a double top. Useful as a frame for a plan, not as a prediction. Reading a Chart
Phishing: A scam in which an attacker gets you to reveal your details yourself or to sign something on a fake site. Security First
Ponzi scheme: A scam in which old investors are paid out with the money of new ones, with no real profit. Security First
Position size: The value of the asset bought: account × risk % / stop %. Risk Management
Private key: A secret number used to sign transactions. Whoever has it controls the funds. Crypto-asset Fundamentals
R: A unit of risk: the amount you lose if the stop is triggered. A result of +2 R means twice the risk. Risk Management
Real interest rate: Approximately the nominal interest rate minus inflation. Fundamentals and on-chain
Red flag: A warning sign that a project carries elevated risk or features of a scam, though not conclusive proof. Fundamentals and on-chain
Regime: The portal's label for the market state: Trend or Sideways, based on ADX and the gap between EMA20 and EMA50. Indicators Without the Magic
Resistance: A zone where a price rise stopped in the past. Reading a Chart
Revenge trading: An order opened to win back a loss quickly, rather than because the plan calls for it. Psychology and Discipline
Risk-reward ratio (R:R): The relationship between the targeted profit and the risk on a single order. Risk Management
RSI: A momentum indicator between 0 and 100, calculated from the ratio of average gains to average losses. Indicators Without the Magic
Rug pull: The project's authors withdraw funds from the pool or sell their supply, and buyers are left with no exit. Security First
Satoshi: The smallest unit of Bitcoin. 100 million satoshis make up 1 BTC. Crypto-asset Fundamentals
Seed phrase: A sequence of most often 12 or 24 words from which a wallet can calculate all keys. Crypto-asset Fundamentals
Sideways movement: A state without a clear sequence of higher or lower highs and lows. Trend rules produce many false signals in it. Reading a Chart
SIM swap: Moving your phone number to the attacker's card, so that he receives your SMS codes. Security First
Slippage: The difference between the expected price and the price at which the order was actually executed. Exchanges and Orders
SMA: Simple moving average. It gives every close in the window equal weight. Indicators Without the Magic
Smart contract: A program published on a blockchain that runs exactly as it is written. Crypto-asset Fundamentals
Spread: The difference between the lowest ask and the highest bid. Exchanges and Orders
Stablecoin: A token that aims to track the value of a currency or other asset. Crypto-asset Fundamentals
Stop order (stop-loss): An order that activates when the price touches a trigger, most often to limit a loss. Exchanges and Orders
Support: A zone where a price decline stopped in the past. Reading a Chart
Survivorship bias: A flattered result caused by testing only on assets that have survived to today. Your system
Timeframe: The duration of one candle, for example a minute, an hour or a day. Reading a Chart
Token: A record kept by a smart contract on an existing network, as opposed to that network’s native coin. Crypto-asset Fundamentals
Total open risk: The sum of the risk of all currently open positions. Risk Management
Trading addiction: A pattern in which a person loses control over trading despite harmful consequences. It is a sign that professional help should be sought. Psychology and Discipline
Trading bot: A program that sends orders to an exchange according to set rules. Your system
Trading journal: A record of every order with the reason, the numbers, plan adherence and the trader's state. Psychology and Discipline
Trading plan: A written document with markets, entry and exit conditions, position size, limits and prohibitions. Psychology and Discipline
Trend following: An approach that enters in the direction of a confirmed trend and holds the position until it weakens. Your system
True range: The largest of: high − low, |high − previous close|, |low − previous close|. Indicators Without the Magic
TVL: The total value of assets locked in a DeFi protocol, sensitive to the token price and to double counting. Fundamentals and on-chain
Two-factor authentication (2FA): A login that asks for a second proof in addition to the password, for example a code from an app or a hardware key. Security First
Unlock: The moment or period when previously locked tokens become available to their holders for sale. Fundamentals and on-chain
Vesting: A schedule by which the team, investors or other recipients gradually gain the right to tokens. Fundamentals and on-chain
Volume: The quantity traded in a period at a given venue. Reading a Chart
Wick (shadow): The thin part of a candle above or below the body. It shows how far the price got without staying there. Reading a Chart
Withdrawal address whitelist: An account setting that allows withdrawals only to addresses approved in advance. Security First