Crypto trading glossary

Definitions written for people placing orders — each with the reason it costs money and a worked example.

Last verified 13 September 2026 · written by the DexLadder team

Every entry is written for someone who is about to place an order, not for a dictionary: what the thing is, why it costs you money, and a worked example with real numbers. 81 terms.

A

AMMAutomated market maker — a contract that quotes prices algorithmically from its own reserv…APR vs APYAPR is the simple annual rate; APY is the same rate after compounding is applied.…ArbitrageBuying an asset in one venue and simultaneously selling it in another to capture a price d…ATRAverage true range — the average size of recent price ranges, including gaps, in the asset…

B

BacktestingRunning a strategy over historical data to estimate how it would have performed.…BackwardationThe state where futures trade below spot, typically in stress or when holders are paid to …BasisThe difference between a derivative's price and the spot price of the asset it tracks.…Bid-ask spreadThe distance between the highest price a buyer will pay and the lowest price a seller will…Bollinger BandsA moving average with bands plotted a set number of standard deviations above and below it…BreakoutPrice moving decisively out of a range or through a well-watched level.…BridgeInfrastructure that moves value between blockchains, usually by locking an asset on one ch…

C

CandlestickA chart mark showing the open, high, low and close of one period, with a body and wicks.…CEXA centralised exchange — a company that holds customer funds and matches orders on its own…Circulating supplyThe number of tokens currently in public hands, excluding locked, reserved or unissued sup…Concentrated liquidityA design where liquidity providers choose a price range to deposit into, instead of spread…Constant product formula (x·y=k)The rule that a pool's two reserves multiplied together must stay constant through a swap,…ContangoThe state where futures trade above spot, usually because of financing costs and bullish p…CorrelationHow closely the returns of two assets move together, from −1 to +1.…Cross marginA margin mode where the whole account balance backs every open position.…

D

DeFiDecentralised finance — financial services built as public smart contracts rather than by …DEXA decentralised exchange — trading that settles on-chain through smart contracts, with no …Dollar-cost averaging (DCA)Buying a fixed amount at regular intervals regardless of price, instead of choosing a sing…DrawdownThe decline from an equity peak to the following trough, usually stated as a percentage.…

E

EMAExponential moving average — a moving average that weights recent prices more heavily than…

F

Front-runningActing on knowledge of a pending order before that order executes, to profit from the pric…Fully diluted valuation (FDV)The value of the network if every token that will ever exist were circulating today, at to…Funding rateA recurring payment between long and short holders of a perpetual contract that keeps its …

G

Gas feeThe payment made to have a transaction included and executed on a blockchain.…

H

HODLHolding an asset through volatility instead of trading it — from a misspelling of "hold" i…

I

Impermanent lossThe gap between the value of tokens held in a liquidity pool and the value of simply holdi…Isolated marginA margin mode where each position is backed only by the collateral explicitly assigned to …

L

Layer 2A network that executes transactions off a base chain and posts compressed proofs or data …LeverageBorrowed exposure that lets a position control more value than the capital backing it.…Limit orderAn instruction to trade only at a stated price or better, which rests in the book until it…LiquidationThe forced closure of a leveraged position when its margin falls below the maintenance req…LiquidityHow easily an asset can be traded in size without moving its price.…Liquidity poolA smart contract holding reserves of two or more tokens that traders swap against, priced …Liquidity provider (LP)Someone who deposits assets into a pool so others can trade against them, earning a share …

M

MACDMoving average convergence divergence — the gap between two EMAs, plotted with a signal li…Maker and taker feesMaker fees apply when your order adds resting liquidity to the book; taker fees apply when…MarginThe capital you post as collateral to open and maintain a leveraged position.…Market capitalisationCirculating supply multiplied by the current price.…Market depthHow much size sits in the book or pool near the current price — how much you can trade bef…Market orderAn instruction to trade immediately at whatever price the book or pool currently offers.…MEVMaximal extractable value — the profit that can be taken by choosing which transactions go…Moving averageThe average price over a lookback window, recalculated as each new bar arrives.…

O

OCO orderOne-cancels-the-other: two linked orders where filling either one automatically cancels th…OHLCOpen, high, low and close — the four prices that summarise a period of trading.…Open interestThe total value of derivative contracts currently open and not yet settled.…OracleA service that feeds off-chain data, usually prices, to on-chain contracts.…Order bookThe live list of every resting buy and sell order for a market, sorted by price.…

P

Paper tradingPlacing simulated trades with real market data and fake money to practise without financia…Perpetual futuresA derivative that tracks an asset's price with no expiry date, held to spot by a periodic …Position sizingDeciding how much to trade, calculated from the distance to your stop and the amount you a…Price impactHow much your own order moves the market price, measured from the mid price before your tr…

R

Risk managementThe rules that decide how much you can lose per trade, per day and in total, before any tr…Risk-reward ratioThe size of the loss you accept if wrong compared with the gain you expect if right.…RSIRelative strength index — an oscillator from 0 to 100 measuring the magnitude of recent ga…

S

Sandwich attackA bot places one trade immediately before your swap and another immediately after it, capt…Seed phraseThe ordered list of words from which every key in a wallet is derived.…Sharpe ratioReturn above the risk-free rate divided by the volatility of those returns — reward per un…ShortingTaking a position that profits when price falls, by borrowing and selling an asset or usin…SlippageThe difference between the price you expected when you submitted an order and the price th…Slippage toleranceThe maximum adverse price move you will accept between submitting a swap and it settling o…StablecoinA token designed to hold a steady value, usually one unit of a fiat currency.…StakingLocking tokens to help secure a proof-of-stake network, earning protocol rewards in return…Stop-lossA resting instruction that turns into a market or limit order once price trades through a …Support and resistancePrice areas where buying or selling has repeatedly appeared, turning a level into a zone o…

T

Take-profitA resting order that closes a position once price reaches a favourable level you defined i…TimeframeThe period each candle represents, from seconds to months.…Total value locked (TVL)The total value of assets deposited in a protocol at current prices.…Trading planA written set of rules covering what you trade, when you enter, where you exit, how much y…Trading volumeThe total value traded in a market over a period, usually quoted over 24 hours.…TrendA sustained directional bias in price, conventionally described as a sequence of higher hi…TWAPTime-weighted average price — an execution method that slices one large order into small p…

V

ValidatorA node that proposes and attests to blocks on a proof-of-stake network, backed by staked c…VolatilityHow much and how fast an asset's price moves, usually measured as the standard deviation o…

W

WalletSoftware or hardware that stores the private keys controlling your on-chain assets.…WhaleA holder large enough that their trades move the market on their own.…Wrapped tokenA token on one chain that represents an asset held on another, or a tokenised version of a…

Y

Yield farmingMoving capital between protocols to earn incentives — trading fees, emissions or staking r…

Where to start

If you are new, read these five in order: order book, spread, slippage, position sizing, stop-loss. Those five decide most of what a beginner loses money to.

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