BEGINNERS
GUIDE TO
CRYPTO TRADING
Terms Every Investor Should Know
+ Advice for Beginners
MUST KNOW TERMS
TP (Take Profit): Having a plan in crypto trading. It's when a
trader decides ahead of time at what price they want to sell
something to make a profit.
CMP (Current Market Price): The current price of a
cryptocurrency right now.
SL (Stop Loss): A safety net in crypto trading. It's an order set
by a trader to automatically sell a cryptocurrency if its price
drops to a specific level. This is a way to limit potential losses.
OTE (Optimal Trade Entry): The best price to start a trade. It's
like figuring out the right moment to buy or sell based on
what the trader thinks will give them the most advantage.
MUST KNOW TERMS
DCA: DOLLAR COST AVERAGING
It is an easy way for beginners to invest money.
Instead of putting all your money into the market
at once, you break it into smaller parts and invest
regularly over time. This helps reduce the effect of
market ups and downs because you buy more
when prices are low and less when prices are
high. The aim is to get a good average price.
EXAMPLE
DCA: DOLLAR COST AVERAGING
Day 1: You spend $10 to buy a cryptocurrency coin priced at $20.
Day 2: The price drops to $15, so your $10 now gets you more coins.
Day 3: The price goes up to $18, and you spend $10 again.
Now, let's see how many coins you got and find the average cost:
Day 1: You get 0.5 coins ($10 / $20 = 0.5).
Day 2: You get 0.67 coins ($10 / $15 = 0.67).
Day 3: You get 0.56 coins ($10 / $18 = 0.56).
In total, you spent $30 and got 1.73 coins. Note: If you had invested $30
Average cost per coin: $30 / 1.73 coins ≈ $17.34 dollars on Day 1 you would have
1.5 coins and your average price
would be $20
MUST KNOW TERMS
SWING TRADE
Swing trading in crypto means holding onto
investments for more than a day but not longer
than a few weeks or a month. Traders use this
strategy to catch the ups and downs in the
market over a mid-term timeframe. They analyze
trends and use technical tools to decide when to
buy and sell, aiming to make a profit from price
changes during this time.
MUST KNOW TERMS
DAY TRADE
Day trading is when you buy and sell within the
same day. Day traders want to benefit from
short-term price changes that happen during a
single trading day. Day trading is more active as
positions are opened and closed on the same
day, focusing on taking advantage of short-term
market movements.
