Crypto Trading Terms Every Beginner Should Know

Ever opened a crypto trading chat and felt like everyone was speaking a different language? "I'm going long with tight stop losses, watching for a breakout above resistance." If that sentence made your head spin, you're in the right place.

Trading has its own vocabulary, and not knowing it can cost you. You might misread signals, misunderstand advice, or make costly mistakes simply because you didn't know what "liquidation" meant until it happened to you.

Consider this your trading dictionary—bookmark it and come back whenever you need a refresher.

Market Direction Terms

Let's start with how traders describe which way the market is moving.

Bull / Bullish: When prices are rising or expected to increase. Think of a bull thrusting its horns upward. If someone says "I'm bullish on Bitcoin," they believe the price will go up.

Bear / Bearish: When prices are falling or expected to fall. Picture a bear swiping its paw downward. "The market looks bearish" means traders expect prices to drop.

HODL: This famous crypto term started as a typo for "hold" in a 2013 Bitcoin forum post. Now it means holding your crypto long-term regardless of price swings. HODLers don't panic sell during dips—they believe in the long game.

Pro Tip: Knowing whether the overall market is bullish or bearish helps you decide whether to trade aggressively or play it safe. In bear markets, even good trades can turn bad quickly.

Order Types

These are the different ways you can buy or sell crypto.

Market Order: An order to buy or sell immediately at the current price. Fast but you might pay slightly more (or receive slightly less) than expected if the price moves quickly.

Limit Order: An order to buy or sell only at a specific price or better. You set your price and wait. More control, but no guarantee your order fills.

Stop Loss: An automatic order that sells your position when the price drops to a certain level. Think of it as a safety net—it limits how much you can lose on a trade. If you buy Bitcoin at $50,000 and set a stop loss at $48,000, your position automatically sells if the price falls that low.

Take Profit: The opposite of a stop loss. An automatic order that sells when the price rises to your target. It locks in your gains without you needing to watch the screen constantly.

Position Terms

These describe what kind of trade you're in.

Long: Betting that the price will go up. You buy first, hoping to sell higher later. This is the most intuitive way to trade—buy low, sell high.

Short: Betting that the price will go down. You essentially borrow and sell first, then buy back lower to return what you borrowed and pocket the difference. More complex and riskier, but lets you profit from falling markets.

Position Size: How much money you've put into a specific trade. Getting this right is crucial for risk management.

Leverage: Borrowing money to increase your position size. If you use 10x leverage, a $100 investment controls $1,000 worth of crypto. Sounds great until you realize losses are also multiplied. A 10% drop wipes out your entire investment at 10x leverage.

Common Mistake: Beginners often use high leverage thinking it's a shortcut to bigger profits. It's actually a shortcut to emptying your account. Start with no leverage until you're consistently profitable.

Chart Analysis Terms

Traders use these when analyzing price movements.

Support: A price level where buying pressure tends to stop the price from falling further. Think of it as a floor—the price bounces off it. If Bitcoin keeps bouncing at $45,000, that's a support level.

Resistance: A price level where selling pressure tends to stop the price from rising further. Think of it as a ceiling. The price hits it and gets pushed back down.

Breakout: When the price moves decisively above resistance or below support. Breakouts often signal the start of a strong move in that direction.

Volume: How much crypto is being traded over a period. High volume confirms that a price move has real momentum behind it. Low volume moves are less trustworthy.

Read more on: RSI, MACD, and Other Essential Trading Indicators

Trading Outcome Terms

These describe what happens to your trades.

PnL (Profit and Loss): Your gains or losses on a trade or overall. "My PnL is +15%" means you're up 15%.

Liquidation: When your exchange forcibly closes your leveraged position because losses have eaten through your margin. This is the nightmare scenario—you lose everything in that trade instantly.

FOMO (Fear of Missing Out): The anxiety that makes you chase a trade because the price is pumping and you don't want to miss the gains. FOMO trades usually end badly.

FUD (Fear, Uncertainty, Doubt): Negative news or rumors that cause panic selling. Sometimes legitimate, sometimes manipulated.

Quick Recap

Here's your essential trading vocabulary:

• Bull/Bear: Market going up or down
• HODL: Hold long-term through volatility
• Stop Loss/Take Profit: Automatic orders that protect gains and limit losses
• Long/Short: Betting on price going up or down
• Leverage: Borrowed money that amplifies gains AND losses
• Support/Resistance: Price floors and ceilings
• Liquidation: Forced closure of a leveraged position—avoid at all costs

Your Next Steps

1. Today: Save this article. When you encounter unfamiliar terms while trading or reading analysis, come back here.

2. This Week: Practice identifying support and resistance levels on any chart. Just observe—don't trade yet. Notice how price reacts at these levels.

3. Ongoing: Join the Fat Pig Signals Telegram community where our analysts explain their reasoning using these terms. Seeing them in context accelerates your learning.

You don't need to memorize everything at once. Trading vocabulary becomes natural as you spend time in the markets. The fact that you're learning this now puts you ahead of traders who jump in without understanding the basics.

Keep building your knowledge. One term at a time, one trade at a time.

Disclaimer: This article is for educational purposes only and should not be considered financial advice. Cryptocurrency trading involves substantial risk of loss. Always do your own research and consider consulting with a financial advisor before making investment decisions.