📚 Crypto & Stock Glossary

A shared ledger kept by many computers at once, hard to alter after the fact.

Transactions are grouped into blocks and chained in time order, and the same ledger is copied across many computers (nodes) on the network. Each block is cryptographically tied to the one before it, so secretly changing an old record would mean rebuilding everything after it. Bitcoin adds a new block roughly every ten minutes.

The first cryptocurrency, launched in 2009, with supply capped at 21 million coins.

A digital currency that runs without a central operator, following a design published under the name Satoshi Nakamoto. New coins appear only as mining rewards, and that reward halves about every four years, so the total never exceeds 21 million. It holds the largest share of total crypto market value and is treated as the market's benchmark.

Any cryptocurrency other than Bitcoin.

Short for 'alternative coin', the term covers Ethereum, XRP, Solana and everything else. Most are smaller than Bitcoin by market value, so their prices often swing harder on the same news. A stretch when Bitcoin's dominance falls is commonly called 'alt season'.

A coin designed to hold a 1:1 value with a currency such as the US dollar.

USDT (Tether) and USDC are the best known; the usual model is an issuer holding reserves such as dollars and Treasury bills to keep one coin worth one dollar. They serve as a parking place after selling and as the quote currency on global exchanges (for example BTC/USDT). Coins have in fact slipped away from one dollar (a depeg) when the quality or transparency of reserves came into doubt.

Current price × circulating quantity: the market value of the whole asset.

For a stock it is share price × shares outstanding; for a coin it is price × circulating supply. A coin at 1 dollar with 1 billion units and one at 100 dollars with 10 million units have the same 1-billion-dollar market cap. A low unit price therefore says nothing about being cheap; size is compared by market cap.

The number of coins actually available to trade right now.

It is the total issued minus what is held back, such as team or foundation allocations and locked tokens. Market cap is normally computed on circulating supply, so if more coins are scheduled to circulate, market cap grows even at an unchanged price. Comparing it with total and maximum supply shows how much is still to come.

Market cap if the maximum supply were all circulating: price × max supply.

If only 10% of supply circulates and the market cap is 100 million dollars, the FDV at the same price is 1 billion. The wider the gap between market cap and FDV, the more supply is still due to reach the market. Newly listed coins often show the largest gaps.

The point where Bitcoin's mining reward is cut in half: every 210,000 blocks, about four years.

The reward began at 50 BTC per block in 2009, fell to 25, 12.5 and 6.25, and has been 3.125 BTC since the April 2024 halving. Because it cuts the flow of new coins, it is often linked to price cycles, but a handful of past cycles is too few to predict the next one. A common analysis lines up past cycles by days since each halving.

The one secret that can move a wallet's coins. Lose it and they cannot be recovered.

Coins live on the blockchain; a wallet is a tool that stores the private key able to move them. The seed phrase (usually 12 or 24 English words) restores that key, so anyone who learns it can take the coins. Coins left on an exchange are controlled by the exchange's keys, hence the saying 'not your keys, not your coins'.

A wallet kept offline (cold) versus one connected to the internet (hot).

Hot wallets, such as apps and browser extensions, are convenient but more exposed to hacking. Cold wallets keep keys offline on a hardware device or paper, which is safer but less convenient to use. Exchanges also keep most customer assets in cold storage and only a portion in hot wallets for withdrawals.

The fee paid to have a transaction recorded on a blockchain.

On Ethereum it is called gas, and it rises when the network is busy. The same coin can cost very different amounts depending on which network (chain) you send it over, and sending over a network the recipient does not support can lose the coins. Exchange withdrawal fees include this cost.

Financial services run by smart contracts (programs) instead of banks or exchanges.

Deposits, loans and swaps are handled automatically by code on a blockchain. Anyone with a wallet can use them, but many users have lost deposits to code bugs or hacks, and there is no deposit insurance. Total value locked (TVL) is the usual measure of size.

Committing coins to help run a network in return for rewards.

On proof-of-stake chains such as Ethereum, participants who lock coins validate transactions and are paid for it. Rewards are quoted as a few percent a year, but if the coin's price falls the result can still be a loss in cash terms. Coins often cannot be sold while locked or during an unbonding wait.

A project handing out free coins to wallets that meet certain conditions.

It is used to promote a new coin or reward early users. Many recipients sell immediately, so prices can swing hard right after listing. Fake sites asking you to 'connect your wallet to claim an airdrop' are a classic phishing trick.

Locked team or investor tokens being released on a set schedule.

New coins usually lock early investor and team allocations for a period (lock-up) and then release them in stages (vesting). Schedules are generally published in advance, and prices can react around days when circulating supply jumps. Whether holders actually sell varies, so an unlock does not automatically mean a fall.

Bitcoin's share of total crypto market cap.

It is Bitcoin's market cap ÷ total crypto market cap × 100. Rising dominance means money is concentrating in Bitcoin; falling dominance means altcoins are taking a bigger share. Stablecoins count toward the total too, so dominance also moves when nervous money shifts into stablecoins.

How much more a coin costs on South Korean exchanges than abroad (a Korea-specific term).

It is the Korean won price ÷ (overseas dollar price × USD/KRW rate) − 1. If 1 BTC is 100,000 dollars abroad and the rate is 1,400 won, the converted price is 140 million won; a Korean price of 147 million won means a premium of about 5%. It persists because capital controls make arbitrage hard; when Korean prices are lower it is called a reverse premium.

How far USDT's won price on Korean exchanges sits above the real USD/KRW rate (Korea-specific).

USDT tracks one dollar, so in theory its won price should equal the exchange rate. It is the Korean USDT price ÷ USD/KRW − 1, and it turns positive when demand to move money abroad is strong. It is used to separate the currency-and-transfer part of each coin's kimchi premium.

An individual or institution trading amounts large enough to move the market.

Fills worth hundreds of thousands to millions of dollars that eat deep into the order book are commonly called whale trades. Their traces show up in exchange trade data or large on-chain transfers, but the purpose (hedging, moving funds, selling) cannot be read from the data alone. It is wise not to read too much into any single large fill.

Analysis of transaction and address records published on a blockchain.

It counts things like transfers between wallets, flows into and out of exchange addresses, and movement of long-dormant coins. Anyone can see the records, but who owns an address is only an estimate, so interpretations carry wide error. Trades inside an exchange are not written to the blockchain and do not appear in on-chain data.

A scam where the developers vanish with investors' money or dump their holdings all at once.

Named after pulling a rug from under someone, it means draining liquidity or dumping a hidden stash until the price is near zero. Anonymous teams, most supply held by a few addresses and promises of guaranteed returns are warning signs. It is especially common with new tokens not listed on major exchanges.

Actually buying and selling a coin or stock and owning it.

Buy 1,000 dollars' worth and that many coins land in your account; if the price halves, you still hold 500 dollars' worth. With no borrowed money there is no forced liquidation. The term distinguishes it from trades such as futures that only bet on price moves.

The list of buy and sell orders waiting at each price.

Sell orders (asks) stack on top and buy orders (bids) below, each with its quantity at every price. A trade happens where the two sides meet. Large resting orders, called walls, can be cancelled at any moment, so they may not reflect a real intent to trade.

The highest price a buyer offers (bid) and the lowest price a seller accepts (ask).

To buy right now you pay the lowest ask; to sell right now you get the highest bid. With a bid of 99.90 and an ask of 100.10, the 'last price' is just the most recent fill and may differ from what you can actually trade at. The gap between the two is the spread.

The gap between the ask and the bid: a hidden cost of trading immediately.

With a bid of 99.90 and an ask of 100.10, the spread is 0.20, about 0.2%. Buy at market and sell straight back at market and you lose that much even if the price has not moved. Heavily traded markets have tight spreads; thin markets and fast moves widen them.

An order with no price limit that fills immediately against the book.

It is fast and certain to fill, but the price depends on what is in the order book. If your size exceeds what sits at the best price, it keeps filling at worse prices, raising your average cost (slippage). Most exchanges charge the taker fee on it.

An order that fills only at your price or better.

Place a buy for 1 BTC at 90,000 dollars and it fills only if the price comes down to that level. You control the price but may never get filled. Because it rests in the book and adds liquidity, it usually pays the maker fee, which is often lower.

A standing instruction that sends an order once price touches a set level (the stop price).

A stop-market becomes a market order at the stop price; a stop-limit becomes a limit order. A typical use is a stop at 85,000 dollars on a coin bought at 90,000, as a stop-loss. In a sharp drop a stop-limit can be skipped and never fill, while a stop-market fills but possibly at a worse price.

Two linked orders where filling one automatically cancels the other.

It is mostly used to place a take-profit limit sell and a stop-loss sell at the same time. On a coin bought at 100, an OCO with a take-profit at 110 and a stop at 95 fills only whichever level is reached first. Support and mechanics vary by exchange.

The side that adds orders to the book (maker) versus the side that takes them (taker).

A limit order that rests in the book is a maker order; one that fills immediately against existing orders, like a market order, is a taker order. Makers supply liquidity, so their fee is often the same or lower. Exact rates vary by exchange and account tier.

The charge an exchange or broker takes every time an order fills.

It is usually a percentage of the trade value, charged on both the buy and the sell. Even 0.05% adds up to a large share of profits if you trade dozens of times a day. On futures the fee applies to the full leveraged position size, making it much larger relative to your margin.

The difference between the price when you send an order and the average price you actually get.

Send a market buy at 100.00 into a thin book and get an average of 100.40, and slippage is 0.4%. It grows with illiquid coins, large orders and fast markets. It is one of the common reasons backtests look better than real trading.

How thickly orders are stacked near the current price.

With many bids and asks within ±1% of the price, even a large order moves the price less. A shallow book lets small orders push the price around and raises slippage. Depth for the same coin differs by exchange and by time of day.

The ratio of volume bought at market to volume sold at market.

Taker buys ÷ taker sells above 1 means aggressive buyers lifting offers outnumbered aggressive sellers. Korean apps show a related 'trade strength' figure, usually buy volume ÷ sell volume × 100, with 100 as the neutral line. It shows short-term pressure, not where price goes next.

The quantity bought and sold in a given period.

It is shown as bars below the chart, and the question is whether volume rose along with a price move. A breakout on heavy volume is read as many participants accepting the new price, while a rise on thin volume is often seen as weak. Comparing against a normal level, such as a multiple of the average, is standard.

The money value traded: volume × price.

A coin at 0.01 dollars trading 100 million units and one at 10 dollars trading 100,000 units differ 1,000-fold in volume but both turn over 1 million dollars. To compare activity across assets with different unit prices, use trading value rather than volume. Market rankings are usually sorted by 24-hour trading value.

The Korean exchange market where coins are traded against the Korean won (Korea-specific).

In South Korea only exchanges tied to a real-name verified bank account may run a won market. The same coin has different prices and volumes on the KRW, BTC and USDT markets, and won prices include the kimchi premium. Keep that difference in mind when comparing dollar-based global charts with Korean ones.

An exchange temporarily blocking deposits or withdrawals of a coin.

It happens during wallet maintenance, network upgrades or responses to hacks. With withdrawals blocked, nobody can move coins elsewhere to close price gaps, so that exchange's price can drift far from others. When a coin's kimchi premium looks unusually large, check its deposit and withdrawal status first.

An exchange ending trading in an asset.

For stocks it is delisting; Korean crypto exchanges call it 'end of trading support'. Trading usually stops after a warning period, such as a caution designation, and coin holders must withdraw to another wallet by a deadline. Prices often fall sharply right after the announcement.

Exchanges run by a company (CEX) versus exchanges run by smart contracts (DEX).

A CEX such as Binance or Upbit holds members' assets and matches trades through an order book. A DEX swaps directly from your own wallet through code, so you never hand over custody, but mistakes or fake tokens are almost impossible to reverse. A CEX carries bankruptcy and hacking risk; a DEX carries code and operational risk.

The identity checks an exchange runs on its users.

Exchanges collect ID, a face photo and contact details to comply with anti-money-laundering rules. Without completing it, deposits, withdrawals or trading limits are restricted. Requests for ID photos that claim to come from an exchange are safest checked only inside its official app or website.

Contracts that trade price movement without exchanging the asset itself.

They began as agreements to trade at a set price on a set date; in crypto, most are perpetual futures with no expiry. You can go long (bet on a rise) or short (bet on a fall), and post only margin to hold a larger position. In exchange, a move the wrong way can wipe out the margin and trigger forced liquidation.

Futures with no expiry, kept near the spot price by funding payments.

Dated futures converge to spot at expiry; perpetuals never expire, so a periodic settlement called funding keeps them anchored to spot instead. When the perp trades above spot, longs pay shorts; below spot, shorts pay longs. Binance USDT perpetuals such as BTCUSDT account for most crypto derivatives trading.

A position that profits if price rises.

Buying spot is a long, and so is opening a buy position on futures. Go long at 90,000 dollars and close at 99,000 and you make 10% at 1x leverage. A leveraged long is liquidated if price falls far enough.

A position that profits if price falls.

On futures you open with a sell and later buy back cheaper to profit. Short at 100,000 dollars, close at 90,000, and you make 10% at 1x. Because price can in theory rise without limit, a short's loss is unbounded relative to the stake, and with leverage it is liquidated quickly.

Holding a position several times larger than your margin; gains and losses scale by the same multiple.

With 1,000 dollars of margin at 10x, the position is 10,000 dollars. A 1% price move is a 10% gain or loss on margin, and a move of about 10% the wrong way wipes it out (in practice liquidation comes earlier because of maintenance margin). Fees are also charged on the full 10,000.

The collateral posted to keep a leveraged position open.

Position size ÷ leverage is the initial margin required. A 10,000-dollar position at 10x ties up 1,000 dollars. Losses are deducted from margin, and when what remains falls below the maintenance margin the position is liquidated.

The minimum margin needed to keep a position open; fall below it and you are liquidated.

It is a percentage of position size (say 0.4% to a few percent), and many exchanges use tiers that raise the rate for larger positions. That is why a 10x long is liquidated before a full 10% drop, at roughly 9-something percent. Exact rates differ by exchange, contract and position size.

Margin ring-fenced per position (isolated) versus the whole account balance shared (cross).

With isolated margin you can only lose what you put into that position, so the maximum loss is clear. With cross margin the rest of the account backs the position, delaying liquidation, but one bad position can drain the entire balance. The same leverage gives different liquidation prices under each mode.

The exchange forcibly closing a position because its margin has run out.

When losses shrink margin below the maintenance level, the exchange dumps the position into the market. If many positions cluster near the same price, those forced orders push price further and set off a cascade. Liquidation data published by exchanges is a record of these actual forced orders.

The price at which a position is forcibly closed.

For an isolated long it is roughly entry × (1 − 1/leverage + maintenance margin rate); for a short, entry × (1 + 1/leverage − maintenance margin rate). A 10x long at 100,000 dollars with a 0.5% maintenance rate liquidates near 90,500. Fees and each exchange's exact formula make the real figure differ slightly.

The rate of the periodic payment exchanged between longs and shorts on perpetual futures.

It usually settles every eight hours (four or one hour on some contracts), and you pay position size × funding rate. At +0.01%, longs pay shorts; when negative, shorts pay longs. A strongly positive rate means positioning is crowded long, but it does not say when that crowding will unwind.

The total of futures contracts still open and not yet closed.

It rises when a new long meets a new short and falls when existing positions close. Price and open interest rising together is usually read as new money pushing price up; price rising while open interest falls is read as shorts closing (short covering). Longs and shorts are always equal in number, so open interest alone does not show which side is bigger.

The ratio of accounts (or value) positioned long to those positioned short.

Binance publishes separate ratios for all accounts and for top traders. Because it counts accounts, a crowd of small accounts can tilt the ratio while the money is actually balanced. It is a reference for extreme crowding, not a direction signal on its own.

The reference price used for liquidations and unrealized PnL; it can differ from the last trade.

To prevent unfair liquidations from a momentary spike on one exchange, it blends prices from several spot exchanges (the index price) with funding data. So even if the last traded price briefly touches your liquidation level, you are not liquidated unless the mark price gets there. Liquidation is judged on the mark price.

The difference between the futures price and the spot price.

It is futures − spot: positive when futures are dearer (contango), negative when cheaper (backwardation). Dated futures usually trade at a positive basis reflecting interest and demand over the remaining term, converging to zero at expiry. On perpetuals this gap is the key input to the funding rate.

A rise forcing shorts to stop out or be liquidated, and their buybacks pushing price higher still.

Closing a short means buying, so when price starts rising against a crowded short side, buying feeds more buying. Deeply negative funding with high open interest is often described as fertile ground for it. The spike frequently reverses soon afterward.

A fall liquidating longs, and their forced sells dragging price lower still.

When leveraged longs are crowded and a drop begins, liquidation sells arrive in a chain. It is often discussed after periods of high positive funding and swollen open interest. A plunge that leaves a long lower wick within minutes is the typical picture.

Reducing the risk of a fall in something you hold by taking an opposite position.

Someone holding 1 BTC spot who opens an equal-sized short sees the spot loss and the short gain offset when price falls. The upside is cancelled too, and funding and fees still apply. It is a way to reduce swings, not to increase returns.

Contracts granting the right to buy (call) or sell (put) at a set price.

A call buyer profits if the price at expiry is above the strike, and otherwise loses only the premium paid. The seller collects the premium but can face large losses. The future volatility priced into options is called implied volatility; the VIX is an example.

A bar showing the open, high, low and close of one period.

The body spans open to close, and the lines above and below (wicks) reach the period's high and low. A close above the open makes a bullish candle; below makes a bearish one. One daily candle summarizes a day, one hourly candle an hour.

The four prices of a period: open, high, low and close.

They are the data behind each candle and the raw input for most indicators. Stocks have opening and closing times, but crypto trades around the clock, so daily candles are cut at a reference time set by the exchange (00:00 UTC on Binance). That is why daily candles for the same coin can look slightly different between exchanges.

The length of time one candle covers: 1 minute, 1 hour, daily, weekly and so on.

At the same moment the 5-minute chart can be in a downtrend while the daily is in an uptrend. Shorter candles give more signals and more noise; longer ones are slower but show the bigger picture. Looking at several timeframes together is called multi-timeframe analysis.

A candle closing above its open (bullish) or below it (bearish).

A bullish candle means price ended the period higher than it started; a bearish one means lower. Korean charts draw bullish candles red and bearish blue, while most international charts use green for up and red for down. It is judged only against that candle's own open, not against the previous candle.

Korea shows rises in red and falls in blue; most international charts use green up and red down.

Korea, China and some Japanese charts traditionally mark gains in red, while US and European charts use green for gains and red for losses. So a red number on a Korean screen means a rise, the opposite of what Western readers expect. The chart tools on this network follow the Korean convention in Korean and the international one in English and Japanese.

The lines above and below a candle's body, reaching the period's high and low.

A long lower wick means price was pushed well down but recovered before the close; a long upper wick means it rose and was pushed back. Long wicks are read as traces of strong opposing pressure at that level. One candle alone rarely settles direction; where it appears matters more.

A candle whose open and close are nearly equal, leaving a very thin body.

It is read as buyers and sellers being evenly matched for the period. After a long rise or fall it is sometimes seen as a pause in the trend, but in sideways markets it is common and means little. The cutoff (body under what percent of the range) differs between tools.

A small-bodied candle with a long lower wick (hammer) or a long upper wick (shooting star).

A hammer after a decline is read as buyers stepping in from below; a shooting star after a rise as sellers appearing from above. A common rule is a wick at least twice the body. Traders look at whether the next candle confirms the direction.

A two-candle pattern where the second body fully covers the first body, in the opposite colour.

A small bearish candle followed by a large bullish one that swallows its body is a bullish engulfing; the reverse is bearish engulfing. It pictures control flipping between buyers and sellers within one candle. What actually followed differs by asset and timeframe, so it is best viewed alongside its historical record.

A three-candle pattern: large candle, small candle, then a large candle the other way.

In a decline, a large bearish candle, a small one (such as a doji) and a bullish candle recovering more than half the first body form a morning star, a shape associated with a bottom. The mirror image at the end of a rise is an evening star. It is only confirmed once all three candles close, by which time price may already have moved a good deal.

Three rising bullish candles in a row (soldiers) or three falling bearish ones (crows).

When each candle opens within the previous body and closes higher, it forms three white soldiers, a picture of steady buying. Three black crows is the opposite. Coming after three candles of strong movement, it can also mean price is stretched in the short term.

Price zones below (support) or above (resistance) where price has repeatedly stalled and turned.

They are areas where buy orders (support) or sell orders (resistance) are thought to gather. Treating them as zones with some width is more realistic than a single line, and levels tested many times are given more weight. When price breaks above resistance, that zone often turns into support.

A sloping line joining lows (in an uptrend) or highs (in a downtrend).

In an uptrend, the line through rising lows is seen as acting like support. It needs at least two points and is considered more meaningful once touched a third time. Which points you connect changes the line, so it remains a subjective tool.

Price moving persistently in one direction: higher highs and lows in an uptrend, lower in a downtrend.

Rising highs and lows make an uptrend, falling ones a downtrend, and moving back and forth inside a range is sideways (a range). The direction and order of moving averages are a quick way to judge it. The trend at the same moment can differ depending on the timeframe.

Price pushing through resistance or support; a quick return inside is a fakeout.

A close beyond a long-capped level on rising volume is commonly accepted as a breakout. Poking through only with a wick and falling back inside is called a fakeout, and it happens fairly often. Hence approaches that wait for a candle close or a retest.

A temporary move against the trend before price resumes its original direction.

In an uptrend, a brief dip that stalls near former resistance (now support) or a moving average is called a pullback. Coming back down to test a level just broken is a retest. Whether it was a pullback or the start of a reversal only becomes clear afterward.

Two highs (double top) or two lows (double bottom) at similar levels.

Failing twice to get above the same zone makes a double top; holding twice above the same low makes a double bottom. The trough (or peak) between them is the neckline, and the pattern is considered complete only when it breaks. Before that it may just be a range.

A topping pattern of a smaller high, a higher high, then a smaller high.

The middle peak (head) is highest with two similar side peaks (shoulders); a break of the neckline joining the lows between them is read as a reversal down. The inverted version is read as a bottom. Different people draw it differently, so a lot of judgement is involved.

An empty price range between one candle's close and the next candle's open.

Stocks gap when news arrives while the market is closed and the next session opens far higher or lower. Round-the-clock crypto spot rarely gaps, but CME Bitcoin futures, which pause over weekends, gap often. There is a saying that gaps get filled, but not always.

A chart whose vertical axis is spaced by ratio rather than by amount.

On a normal chart 100→200 and 10,000→10,100 are the same height, but on a log chart 100→200 (+100%) matches 10,000→20,000 (+100%). It is used for long-term Bitcoin charts, where price changed thousands of times over, so the early years do not flatten against the floor. Equal slopes mean equal growth rates.

A line joining the average closing price of the last N candles.

A simple moving average (SMA) adds the last N closes and divides by N; the 20-day line is the average price of the last 20 days. Price above the line means it trades above its recent average, and the slope hints at trend direction. Being an average of past prices, it always lags the actual price.

A moving average that gives more weight to recent prices.

EMA = today's close × k + yesterday's EMA × (1 − k), with k = 2 ÷ (N + 1). For a 20 EMA, k ≈ 0.095, so today's price counts about 9.5%. It reacts faster than a simple average of the same length but is also jumpier.

A shorter moving average crossing above a longer one.

The classic version is the 50-day crossing above the 200-day, though shorter pairs such as 5 and 20 days are also common in Korea. It means recent prices have become stronger than the longer-term average. Because moving averages lag, the cross often arrives after much of the rise has happened.

A shorter moving average crossing below a longer one.

The opposite of a golden cross, it means recent prices have weakened against the longer-term average. In sideways markets golden and death crosses alternate frequently and tend to produce repeated small losses. Signal timing changes a lot with the pair of averages chosen.

An indicator comparing recent gains with recent losses on a 0–100 scale; default period 14.

RSI = 100 − 100 ÷ (1 + RS), where RS is the average gain ÷ average loss over the last 14 candles (Wilder's original method smooths those averages exponentially). Readings above 70 are usually called overbought and below 30 oversold. In strong trends RSI can stay above 70 or below 30 for a long time, so those levels alone are not reversal signals.

Describing a market that has risen (overbought) or fallen (oversold) a lot in a short time.

Each indicator has customary lines, such as RSI above 70 or below 30 and stochastic above 80 or below 20. The label states that price has moved a lot; it does not predict an imminent reversal. Real results vary by asset, timeframe and market phase, so checking against historical data is worthwhile.

Price and an indicator pointing in different directions.

Price making a higher high while RSI makes a lower high is bearish divergence; price making a lower low while RSI makes a higher low is bullish divergence. It is read as momentum fading, but divergences often repeat several times before direction actually changes. How highs and lows are picked changes the verdict.

An indicator using the gap between the 12 EMA and the 26 EMA to show trend strength and direction.

MACD line = 12 EMA − 26 EMA, signal line = 9 EMA of the MACD line, histogram = MACD line − signal line. The MACD line crossing above the signal is read as upward momentum building, and being above zero means the short average sits above the long one. Built on moving averages, it gives frequent, late signals in sideways markets.

Bands drawn two standard deviations above and below a 20-period moving average.

The middle line is a 20-candle simple moving average, and the upper and lower bands are middle ± 2 × standard deviation. If prices were normally distributed most would stay inside, but in real markets price can ride a band up or down during strong trends. Band width shows how large recent volatility is.

Bollinger Band width at its narrowest in a recent period.

It means volatility has contracted and price is boxed into a tight range. Volatility tends to alternate between quiet and active phases, so squeezes are often said to precede big moves, but they do not say which direction. It is compared using band width = (upper − lower) ÷ middle.

Where the current close sits within the range of the last N candles, on a 0–100 scale.

%K = (close − lowest low of N) ÷ (highest high of N − lowest low of N) × 100, and %D is a 3-period average of %K; N is usually 14. Above 80 means closing near the top of the range, below 20 near the bottom. It moves faster than RSI and gives more signals.

The stochastic formula applied to RSI values instead of price.

It shows where the current RSI sits within its range over the last 14 readings, on 0–1 (or 0–100), usually smoothed with 3 and 3. Far more sensitive than RSI, it frequently swings between the extremes. It shows short-term shifts early but also produces many false signals.

A volatility measure of how much one candle typically moves.

True range (TR) is the largest of high − low, |high − previous close| and |low − previous close|, and ATR is its 14-candle average (Wilder smoothing). A daily Bitcoin ATR of 3,000 dollars means it typically moves about that much in a day. It says nothing about direction and is often used to set stops at a multiple of ATR.

A Japanese indicator using five lines and a cloud to show trend, support and resistance together.

Conversion line = (highest high + lowest low) ÷ 2 over 9 candles; base line = the same over 26; leading span A = (conversion + base) ÷ 2 plotted 26 periods ahead; leading span B = (high + low) ÷ 2 over 52 plotted 26 ahead; the lagging span is the close plotted 26 periods back. The area between the two leading spans is the cloud: price above it reads bullish, below it bearish. When price, conversion line and lagging span all turn bullish together it is called a three-role reversal (sanyaku kouten).

An indicator that marks trend direction with a single line built from ATR.

The base line is (high + low) ÷ 2 ± multiplier × ATR, commonly ATR 10 with a multiplier of 3. In an uptrend the line sits below price, in a downtrend above, and the direction flips when a close crosses it. It works well in long trends but flips often in sideways markets.

Lines drawn at 23.6%, 38.2%, 50%, 61.8% and 78.6% of the previous move.

After a rise from 100 to 200, the 38.2% retracement is 161.8 and the 61.8% retracement is 138.2. The usual explanation is that many people watch the same lines so orders gather near them, but the lines change with the high and low you pick. 50% does not come from the Fibonacci sequence but is customarily included.

Sideways bars showing how much volume traded at each price level.

The most-traded price is the point of control (POC), and the range holding 70% of volume is the value area (top VAH, bottom VAL). Heavily traded levels tend to act as support or resistance, while thin zones are often crossed quickly. The shape depends on the period it is computed over.

Average price weighted by volume: Σ(price × volume) ÷ Σ volume.

The typical price (high + low + close) ÷ 3 is normally used, and it usually resets each day. It approximates the average cost of everyone who traded that day, so institutions use it to grade order execution. Price above VWAP means it is trading above the day's average.

A running total that adds volume on up days and subtracts it on down days.

If the close is above the previous close, that day's volume is added; if below, subtracted; if unchanged, nothing. The direction matters more than the level, and OBV rising while price moves sideways is read as volume building on the buy side. A single huge-volume day can shift the whole line.

Today's reference price and support/resistance lines computed from the prior day's (week's, month's) high, low and close.

The classic method is pivot P = (high + low + close) ÷ 3, first resistance R1 = 2P − low, first support S1 = 2P − high. Because the calculation is simple and everyone gets the same values, they are widely used as reference lines in short-term trading. Other methods such as Fibonacci and Camarilla give different numbers.

Net income divided by shares outstanding: what one share earned in a year.

A company with 100 million dollars of net income and 100 million shares has an EPS of 1 dollar. It is the denominator of the P/E ratio, and steady EPS growth is a core measure of a growing business. One-off gains such as asset sales can inflate EPS temporarily.

Share price ÷ earnings per share: how many years of current earnings the price represents.

A 20-dollar share with an EPS of 2 dollars has a P/E of 10, meaning ten years of today's earnings to match the price. It is meaningful mainly within the same industry, and fast-growing industries tend to carry higher P/Es. With a loss there is no P/E, and a temporary dip in earnings can make it look suddenly high.

Net assets (assets − liabilities) divided by shares outstanding.

With 1 billion dollars of net assets and 100 million shares, BPS is 10 dollars. Conceptually it is each share's portion if the company were wound up at book value, though real liquidation value can differ. It is the denominator of the P/B ratio.

Share price ÷ book value per share: how many times book value the price is.

A P/B below 1 means market cap is smaller than book net assets. It is most used for asset-heavy industries such as banks and manufacturing, and means less where much value is off the balance sheet, as in software. The identity P/B = P/E × ROE holds.

Net income ÷ shareholders' equity: the percent earned on shareholders' money in a year.

Earning 150 million dollars on 1 billion of equity is an ROE of 15%. Higher means capital is used efficiently, but heavy borrowing shrinks equity and can also push ROE up, so it is read alongside the debt ratio. Consistency over several years matters more than one year's figure.

Market cap ÷ annual revenue.

It is often used to compare growth companies not yet profitable, where P/E cannot be used. A company with 100 million dollars of revenue and a 500-million market cap has a P/S of 5. High revenue with thin margins leaves little for shareholders, so the industry's margins matter too.

Enterprise value ÷ earnings before interest, taxes, depreciation and amortization.

EV = market cap + net debt (borrowings − cash), roughly the price of buying the whole company. EBITDA approximates the cash the business generates from operations. It is used because it compares companies with different debt levels or depreciation policies more fairly than P/E.

P/E ÷ annual EPS growth rate (%): P/E adjusted for growth.

A P/E of 20 with EPS growing 20% a year gives a PEG of 1. At the same P/E, faster earnings growth means a lower PEG. Its biggest weakness is that future growth is an estimate that can be wrong.

A company paying part of its profit to shareholders in cash (or shares).

It is quoted as dividends per share (DPS); many Korean companies pay once a year after year-end, with quarterly dividends growing, while quarterly payment is standard in the US. In South Korea, dividend income tax (15.4% in the standard case) is withheld; the dividend calculator shows the after-tax amount.

Dividend per share ÷ share price: the yearly percent you receive in dividends at today's price.

A 50-dollar share paying 2.50 a year yields 5%. When the price falls the yield rises automatically, so be wary of high yields that come from a price collapse on poor results. It is based on past dividends, so a cut makes the real yield lower.

The share of net income paid out as dividends: total dividends ÷ net income.

Paying 30 million out of 100 million of net income is a 30% payout ratio. A very high ratio (100% or more) means paying out more than it earns, which may be hard to sustain. Growth companies often keep payout low to reinvest profits.

The date that fixes who gets the dividend (record date) and the date the right drops off (ex-dividend date).

Korean stocks settle two business days after the trade (T+2), so you must buy two business days before the record date to be on the register, and the next day is the ex-dividend date. On that day the price theoretically opens lower by the dividend. More Korean companies now set the dividend amount before the record date, so check each company's dates; US stocks settle T+1, making the ex-date the same as the record date.

A company selling shares to the public for the first time and listing on an exchange.

The offer price is set after book-building, and retail investors receive shares through subscription. First-day moves against the offer price can be large, up sharply or below the offer. Investors also watch for when lock-ups on existing shareholders and institutions expire, adding supply.

A period after listing during which major holders and institutions may not sell.

It exists to prevent a price collapse from heavy selling right after listing. Periods range from a month to several years depending on the investor type and agreement, and attention to potential selling grows around expiry dates. It is the same structure as a crypto token unlock.

A fund built to track an index or basket of assets, traded on an exchange like a stock.

One share of an S&P 500 ETF gives proportional exposure to all the index's companies. Fees tend to be lower than ordinary funds, and it can be traded at any time during the session. Leveraged and inverse ETFs track a multiple of the daily return, so held for long periods they can drift away from that multiple of the index's return.

A single number combining many stock prices to show the market's overall direction.

KOSPI covers the whole Korean main board and the S&P 500 covers 500 large US companies, both weighted by market cap. Others, such as the Dow Jones, are price-weighted, so indices move differently depending on method. Each index is expressed relative to a base value such as 100 or 1,000 set at a starting date.

Borrowing shares to sell first, then buying them back later to return: a bet on a falling price.

Borrow and sell at 100, buy back at 80 to return, and you make 20 before borrowing costs. If the price rises the loss grows, without a theoretical limit. In South Korea whether and how short selling is allowed has changed over time, so check the exchange or regulator for the current rules.

The maximum a Korean stock may rise or fall in a day: ±30% from the previous close.

KOSPI and KOSDAQ stocks cannot move more than 30% above or below the prior close in a single session. At the upper limit, buy orders pile up at that price and trading can almost stop. US stocks have no such daily limit, and neither does the crypto market.

The day cash and shares actually change hands after a trade.

Korean stocks settle two business days after the trade (T+2); US stocks have settled one business day after (T+1) since May 2024. Proceeds from Korean shares sold on Monday can be withdrawn on Wednesday. It affects dividend record-date timing and when sale proceeds become available.

Shares with no or limited voting rights that receive dividends ahead of (or above) common shares.

Korean preferred shares are marked with a suffix after the company name and often pay a slightly higher dividend than common shares but carry no vote at shareholder meetings. Thin trading can make their price diverge sharply from the common stock or swing wildly. Income-focused investors can compare the dividend yields of the two.

Dividing one share into several; the company's value is unchanged.

A 1-for-10 split turns one 1,000-dollar share into ten 100-dollar shares. Market cap and your ownership stay the same; only the unit price drops, making shares easier to trade. Charts must be adjusted by the split ratio, or the split looks like a sudden price crash.

A company issuing new shares and selling them for cash.

It raises capital, but the higher share count dilutes existing holders' stakes and EPS. New shares are usually priced at a discount to market, so the stock often weakens right after the announcement. What the money is for, such as investment in facilities or paying down debt, is central to how it is read.

A company buying its own shares on the market.

With fewer shares outstanding, the same profit produces higher EPS. Cancelling the repurchased shares reduces the count permanently, while holding them as treasury stock leaves the option to sell them again later. Alongside dividends it is one of the main ways of returning profit to shareholders.

A market rising (bull) or falling (bear) over an extended period.

In stocks, a convention calls a 20% fall from a peak a bear market and a 20% rise from a trough a bull market. The words come from a bull tossing its horns upward and a bear swiping down. In the far more volatile crypto market a 20% move is common even in short corrections, so the rule fits poorly there.

A fall of a certain size from a peak; about 10% is called a correction in stocks.

Drops of around 10% within an uptrend are common in stock markets, often more than once a year. A much bigger fall in a short time is called a crash, and both KOSPI and the S&P 500 have fallen more than 50% in the past and taken years to recover. Looking at actual drawdown sizes and recovery times helps calibrate expectations.

The rate set by a central bank, anchoring interest rates across the economy.

In Korea it is set by the Bank of Korea's Monetary Policy Board, in the US by the Federal Reserve's FOMC. Higher rates raise borrowing costs and make deposits more attractive, which is described as weighing on demand for risk assets such as stocks and crypto. Markets often react more to the gap from expectations than to the decision itself.

The Federal Reserve meeting that sets US interest rates, held eight times a year.

Each meeting brings the rate decision, a statement, the chair's press conference and, at some meetings, the 'dot plot' of members' rate projections. Announcements land in the early morning Korean time, so round-the-clock markets like crypto react first. The schedule is published in advance, so the volatility around announcements can be anticipated.

A general rise in prices, and the consumer price index that measures it.

CPI turns the price of a basket of household goods and services into an index, usually read as the change from the same month a year earlier. With 3% annual inflation, the same money buys about 3% less each year. A hotter-than-expected print often unsettles markets by reducing hopes of rate cuts.

How many Korean won it takes to buy one US dollar.

A move from 1,300 to 1,400 won means the won weakened (the dollar got dearer). Someone holding US stocks or dollar-priced coins sees their won value rise when the rate goes up, even at unchanged prices. This rate is also an input to the kimchi premium.

An index of the US dollar's value against six major currencies.

It combines the dollar against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, with the euro making up more than half. A rising index means a stronger dollar. Risk assets are often said to be weak when the dollar is strong, but they do not always move that way.

The return on government bonds: the benchmark 'risk-free' rate set by the market.

Bond prices and yields move in opposite directions, so selling bonds pushes prices down and yields up. The US 10-year Treasury yield acts as a benchmark for asset prices worldwide, and a sharp rise is read as making stocks relatively less attractive. Short-term yields rising above long-term ones, an inverted yield curve, is often cited as a recession signal.

A marked, sustained decline in economic activity.

Two consecutive quarters of shrinking real GDP is a common rule of thumb, but in the US the National Bureau of Economic Research makes the official call from employment, income, output and more. Stock prices tend to lead the economy, so markets have sometimes already bottomed by the time a recession is officially confirmed. Fear of recession alone often raises volatility in risk assets.

A mood of buying risky assets (risk-on) or fleeing them (risk-off).

In risk-on phases stocks, crypto and emerging-market currencies tend to rise together; in risk-off phases money moves toward havens such as the dollar, Treasuries and gold. Different assets then move in the same direction, weakening diversification. It is shorthand for market mood, not a precise indicator.

Expected 30-day volatility computed from S&P 500 option prices, nicknamed the 'fear index'.

A VIX of 20 means the market is pricing roughly 20% annualized movement ahead. It tends to sit in the 10s to 20s and spike in sell-offs. It does not predict the future; it measures how much anxiety the options market is pricing right now.

An index of market sentiment from 0 (extreme fear) to 100 (extreme greed).

The crypto version blends volatility, volume, social media, dominance and more and is published daily; CNN publishes a separate one for stocks. Contrarian advice says to buy in extreme fear and sell in greed, but extremes can last a long time. It is worth checking the historical record of what price actually did after each zone.

How widely gains and losses are spread across the stocks or coins in a market.

It is measured by advancers ÷ decliners, the share trading above a moving average, counts of new highs and new lows, and similar. An index rising while fewer and fewer components rise is read as a handful of giants carrying the index. In crypto it shows whether the whole market is strong, not just Bitcoin.

Money shifting from leading sectors to others over time.

Depending on interest rates and the business cycle, the relative performance of tech, financials, defensives and other sectors takes turns. Viewing sector returns side by side shows where money is flowing now. The order is not fixed like a textbook, so it is hard to use for predicting what comes next.

A mechanism that halts trading across a whole market after a sharp index drop.

In Korea it triggers in stages when the index stays down 8%, 15% or 20% from the prior close for one minute; the first two levels halt trading for 20 minutes and the third ends the day's session. In the US the levels are 7%, 13% and 20% on the S&P 500. The aim is to interrupt panic selling, and crypto exchanges have no such mechanism.

A Korean rule that briefly switches a single stock to call-auction trading after a sudden big move.

When a stock moves more than a set range from its last trade or previous close, trading switches for two minutes to a single-price auction that gathers orders and fills them at one price. The aim is to soften spikes from sudden order imbalances. Unlike a circuit breaker, which halts the whole market, it applies to one stock only.

The time blocks in which Asian, European and US markets open in turn.

Crypto trades around the clock, but volume and range vary with when most people are active. The overlap with US stock market hours (9:30 a.m. New York time) is often said to bring bigger moves. Measuring average range by hour and weekday with real data shows whether the pattern holds.

A tendency for returns to be repeatedly better or worse in certain months or weekdays.

'Sell in May and go away' and Bitcoin's monthly return tables are typical examples. With only a few years of data a pattern may be pure chance, and patterns can fade once widely known. Look beyond the average to how much it varied year to year, such as the share of years it was positive.

Closing a position once a loss reaches a set level, to prevent a bigger one.

The key is deciding before entry the price at which your idea is proven wrong. Buy at 100 with a stop at 95 and the loss on that trade is capped at 5%. Placing the stop below support or at a multiple of ATR are common methods.

Closing a winning position to lock in the gain.

You can rest a limit sell at a target in advance, or take part off and let the rest follow the trend. Paper profit is not real until closed and can turn back into a loss. The ratio between the take-profit distance and the stop distance is the risk-reward ratio.

The expected gain relative to the amount you could lose on one trade.

Buy at 100 with a stop at 95 (−5) and a target of 110 (+10) and the ratio is 1:2. At 1:2 a win rate above about 33% breaks even before fees. A target set unrealistically far makes the ratio look good but is rarely reached, so read it together with win rate.

Working out how much to put into a trade backward from your loss limit.

Position size = (account × acceptable loss %) ÷ stop distance. With a 10,000-dollar account, a 1% (100-dollar) limit per trade and a 5% stop, the position is 2,000 dollars. Sized this way, the account can survive a run of stop-outs.

Spreading money across assets that move differently to reduce overall swings.

If one holding halves but is only 10% of the portfolio, the account loses 5%. Assets that move together, such as Bitcoin and most altcoins, give little diversification however many you buy. The benefit comes from mixing assets with low correlation.

How closely two assets' returns move together, from −1 to +1.

+1 means moving fully in step, 0 means no relationship and −1 means moving exactly opposite. It is computed over a past window, and correlations that are normally low often jump in a crisis. It is the first number to check when judging diversification.

How many percent a stock moved on average for each 1% move in the market index.

A beta of 1.5 means it rose about 15% when the index rose 10% and fell harder on the way down. Below 1 means it swings less than the market. The value changes with the period and benchmark index used.

How widely price swings, usually measured as the standard deviation of returns.

An asset with 60% annual volatility commonly moves within about ±60% over a year (roughly 68% of the time if returns were normal). Bitcoin's volatility is several times that of major stock indices. Higher volatility widens the range of outcomes for the same amount invested, which is a reason to trade smaller.

The largest percentage fall from a peak to a subsequent low.

If an account goes 100 → 150 → 90, the MDD is (150 − 90) ÷ 150 = 40%. Two strategies with the same return can feel very different if one has a much deeper MDD that is hard to sit through. It is often checked before return when reading backtest results.

The gain needed to recover is larger than the percentage lost.

Lose 10% and you need about 11.1% to get back; 30% needs about 42.9%, 50% needs 100% and 90% needs 900%. The required gain = 1 ÷ (1 − loss) − 1. That is why avoiding large losses matters as much as making large gains.

The share of trades that ended in profit.

A high win rate still loses money overall if wins are small and losses large. Conversely, a 40% win rate is profitable if the average win is twice the average loss. Win rate must always be read alongside the payoff ratio (average win ÷ average loss).

The average amount won (or lost) per trade.

Expectancy = win rate × average win − (1 − win rate) × average loss. With a 40% win rate, an average win of 20 and an average loss of 10: 0.4 × 20 − 0.6 × 10 = 2, an average gain of 2 per trade before fees. With few trades luck dominates, so it means something only with a large enough sample.

Running a trading rule over past data to calculate how it would have performed.

For example, run 'buy on a golden cross, sell on a death cross' over several years of candles and look at return, MDD and win rate. Comparing against simply buying and holding shows whether the rule adds anything. Leaving out fees and slippage, or accidentally using future information, makes results look better than reality.

Tuning a rule so tightly to past data that it fails in practice.

Keep adjusting numbers, an RSI threshold of 31 or a 17-day average, to whatever maximized past returns, and the rule memorizes noise. More conditions and shorter data raise the risk. The basic check is to build the rule on one period and test it on another.

Buying a fixed amount at fixed intervals regardless of price.

Buying 100 dollars every week means more units when prices are low and fewer when high, smoothing your average cost over time. It removes the worry of timing, but in a steadily rising market it can return less than investing everything at the start. If the asset falls over the long run, DCA cannot avoid the loss.

The average purchase price of an asset bought in several lots: total spent ÷ total quantity.

Buy 10 shares at 100 and 10 at 80 and the average cost is (1,000 + 800) ÷ 20 = 90. Above that the position shows a paper profit, below it a paper loss. Including fees pushes the real break-even slightly higher.

Buying more after the price falls below your entry, to lower the average cost.

A lower average means a smaller bounce gets you back to even, but more money is now in the same asset, so a further fall hurts more. Planned staged buying is usually distinguished from unplanned averaging down done to avoid admitting a loss. Before adding, calculate the new average and the position's share of the account.

Earning returns on past returns: principal × (1 + rate)^periods.

10,000 dollars at 7% a year for 10 years grows to 17,000 with simple interest but about 19,672 with compounding. Dividing 72 by the annual rate in percent gives a rough number of years to double (about 10 years at 7%). Losses and fees compound too.

The yearly return that would have produced a multi-year result if growth were steady.

CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1. Doubling over five years is a CAGR of about 14.9%, not 100% ÷ 5 = 20%. It erases the ups and downs along the way, so read it alongside MDD and volatility.

Return after subtracting inflation: the actual gain in purchasing power.

A 5% nominal return with 3% inflation is roughly a 2% real return (precisely 1.05 ÷ 1.03 − 1 ≈ 1.94%). If a bank rate is below inflation, the balance grows while what it can buy shrinks. Taxes and fees push the real return lower still.

Excess return per unit of volatility: (return − risk-free rate) ÷ volatility.

With a 12% annual return, a 3% risk-free rate and 18% volatility, the Sharpe ratio is (12 − 3) ÷ 18 = 0.5. For the same return, the smoother path scores higher. It is backward-looking and captures rare, severe losses such as crashes poorly.

The fear of missing out that makes people rush in (FOMO), and spreading fear, uncertainty and doubt (FUD).

Chasing a soaring coin without a plan is classic FOMO; posts that inflate fear from flimsy bad news are called FUD. Both are dangerous because they replace pre-set rules with emotion. Writing your reason for each entry in a trading journal makes emotional trades easy to spot later.

Holding on through price swings without selling, for the long term.

The word spread from a misspelling of 'hold' in a 2013 Bitcoin forum post. Trading rarely cuts fees and emotional decisions, but if the asset never recovers, you carry the loss to the end. It is worth checking the record: Bitcoin itself has fallen more than 70–80% from a peak several times.

Practising trades with a virtual balance instead of real money.

You can rehearse orders, stops and position sizing on live prices. With no money at stake, people tend to be bolder than they would be for real, and slippage and psychological pressure are missing. Keep a record of paper trades like a journal, or the practice teaches little.

A record of each trade's entry and exit prices, reasons and outcome.

The accumulated log lets you calculate your own win rate, payoff ratio and expectancy, and shows which situations keep producing losses. Record not just results but why you entered and how you felt, so the decision process can be reviewed later. If you trade both stocks and crypto, keeping them in one place makes overall performance easier to see.