Crypto Trading Glossary: Key Terms Explained Simply

A token is a digital unit issued on top of an existing blockchain such as Ethereum or Solana.

A blockchain is a shared record book kept by thousands of independent computers, where the past is practically impossible to change.

A stablecoin is a cryptocurrency whose price is pegged to a regular currency, usually the US dollar.

A crypto exchange is a venue where buyers and sellers of crypto meet through a shared order book.

Trading is buying and selling assets to profit from price changes, usually over short time frames.

On spot you buy the coin itself; with futures you trade a contract on its price, often with leverage and the ability to short.

Margin trading means trading with money borrowed from the exchange against your own funds as collateral — in other words, with leverage.

Leverage shows how many times a position exceeds the money behind it: at 10x, $100 of margin opens a $1,000 position.

A long is a bet on the price going up; a short is a bet on it going down.

A short squeeze is a sharp price rise that forces shorts to close by buying, which pushes the price even higher.

A liquidation is the forced close of a leveraged position when its margin can no longer cover the loss.

A stop-loss closes a trade at a set loss, a take-profit at a set gain. Both are placed in advance.

A market order fills immediately at the best available price; a limit order fills only at your price or better.

A market maker constantly posts buy and sell orders and earns the difference between them.

A whale holds a position large enough that their trades visibly move the market.

An altcoin is any cryptocurrency other than bitcoin.

A perpetual future is a contract on an asset's price with no expiry date; funding keeps its price close to spot.

DeFi means financial services run by smart contracts without banks or exchange middlemen; a DEX is a decentralised exchange.