The Cryptocurrency trading space is one of the most volatile spaces ever. Hence, it does not come as a surprise that crypto traders use various crypto terminologies. These acronyms refer to specific concepts in crypto trading, investment management, or finance generally.
It is quite possible that some of these terms may cause some form of confusion, especially for new cryptocurrency traders. Here are some of the most frequently used terminologies every crypto trader should know:
FOMO (Fear of Missing Out)
This is one of the cryptocurrency investment terminologies that is known as the action of panic-buying crypto assets due to the fear of missing out. some traders acquire crypto assets in panic when they think they might miss out on a profitable trade. FOMO decisions are purely based on emotions. Veterans in crypto trading may use the same term to refer to those new to trading and who buy assets due to the hype around crypto in general.
HODL
HODL refers to the trading strategy of buying and holding in the cryptocurrency market. Those who stick to HODL will acquire cryptocurrency assets and hold onto them even during serious price drops. They then look for extended profit by converting the assets into long-term investments. This is one of the cryptocurrency terminologies that traders should know when they are trading crypto.
ROI (Return on Investment)
This is probably the common term in finance and investment. It is known as Return on Investment; it is not exactly only exclusive to cryptocurrency alone. Traders use the ROI calculation to understand the performance of their investments in any market. ROI indicates how much your investment has grown or depreciated over time. There are easy ways to make money with cryptocurrency through ROI.
DYOR (Do Your Own Research)
Do Your Own Research is a self-explanatory term used in the crypto trading environment, it basically asks traders to do their research before making market decisions. It means a trader should not rely on ready-made advice in buying crypto assets. DYOR is also related to other ideas like Fundamental analysis and the formation of a strategy
KYC (Know Your Customer)
This is a set of guidelines that help organizations understand a customer’s identity. KYC is concerned with cryptocurrency exchanges and trading platforms in the crypto trading context, they are major services that are used to verify a customer’s identity and credibility before allowing them to trade.
DD (Due Diligence)
Due Diligence deals with the investigation and care that a rational person or a business is expected to take before coming to an agreement with another party. DD can help traders and investors to stay confident about the decision they make. It also gives you a deeper understanding of the organization behind the asset you intend to invest in.
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