Aside from bullish and bearish trends, another guarantee in the crypto market is a lot of trading terms that may or may not sound too familiar depending on your experience level. From FOMO to HODL, ROI and more, what do all these crypto terms for beginners mean? Not knowing the trading terms could sometime be daunting, especially for beginners. Thankfully, they can be easily learned and remain very useful if you hope to stay on par with what’s going on in the crypto industry.
To ease things, we’ve compiled the most important crypto terms for beginners to speed up your learning process.
What are the crypto terminologies every beginner should know?
Here is a rundown of some of the most important termonologies for beginners:
1. Fear, Uncertainty and Doubt (FUD)
FUD is not actually a trading term in itself, but rather a concept used in the context of financial markets and the crypto industry. Basically, fear, uncertainty and doubt is a strategy that focuses on discrediting a specific company, project or product by spreading misinformation. With FUD, the aim is to instil fear and gain an advantage in the market. This could be a form of tactical or competitive advantage that may result in a price decline caused by potentially damaging news.
2. HODL
A very popular term in the crypto industry, HODL is derived from a misspelling of the word “hold”. Basically, it refers to the strategy of buying and holding for a long time regardless of price drops. HOLD is a long-term trading strategy employed by traders who are convinced about a particular coin and tend to hold on to their investment.
3. Fear of Missing Out (FOMO)
Just as the name implies, FOMO is emotion-driven, and basically refers to the feeling traders get that causes them to flock to buy an asset in fear of missing out on potential profit. Fomo is commonly used in social media apps for example, where older and newer posts are mixed on the timeline. This is to ensure that users keep checking back in fear that they’re missing out on an important trend.
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4. Return on Investment (ROI)
Return on Investment (ROI) exactly represents what its name implies. Basically, it is a way to measure an investment’s performance relative to the original cost. In crypto trading, it simply refers to comparing the profit made on a coin relative to the money invested.
5. All-Time Low (ATL)
ATL refers to the lowest market price of an asset or cryptocurrency. When an all-time low is breached, many stop orders may be triggered, leading to further sharp declines in the market price of the asset. Because there aren’t logical points for it to stop, buying at such a time is considered risky by many traders.
6. All-Time High (ATH)
Obviously the opposite of ATL, an all-time high is the highest recorded price of an asset. ATH breaches are mostly accompanied by a soar in trading volumes due to traders attempting to jump on the opportunity to make a quick profit and sell at a higher price.
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7. BUIDL
This is a derivative of the term HODL and is used to describe traders who continue to build independent of price fluctuations. Basically, BUIDL operates an idea that true believers of the crypto industry will continue to build regardless of bear markets due to genuinely caring about the importance of blockchain and crypto to the world.
A lack of understanding of these crypto terms will result in confusion when entering the market. It is important that you familiarize yourself with these terms before getting started.
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