Trading Glossary
Essential trading terms and concepts every crypto trader should know.
F
- FOMO
- Fear Of Missing Out — the anxiety that drives traders to enter positions impulsively because they believe the price will keep rising.
L
- Leverage
- Using borrowed funds to increase potential returns. 10x leverage means a 1% price move equals a 10% gain or loss on your capital.
P
- Position Sizing
- The process of determining how much capital to allocate to a single trade based on your risk tolerance and account size.
R
- R-Multiple
- A risk measurement that expresses profit or loss as a multiple of initial risk (R). If you risk $100 and make $300, your R-Multiple is 3R.
- Revenge Trading
- The dangerous practice of making aggressive trades to recover losses, often leading to even larger losses.
S
- Stop Loss
- A predetermined price level at which a losing trade is automatically closed to limit further losses.