Whether it is the stock market or the cryptocurrency market, a novice trader comes across numerous subjects and terms related to trading, and most of these terms sound very difficult to understand in the first place. Platforms like Quantum Code leverage top-notch trading tools and analysis to provide better insights into bitcoin trading to beginners.
Some of these terms incur FOMO, ROI, ATH, FUD, and many others; since the young generation and investment enthusiasts power the cryptocurrency industry, the industry now has its slang and language, which is essential to understand before jumping onto the bandwagon of trading. It is essential to keep up with new flanged trading slang and terms to understand the market sentiments better. Let's discuss some of the bitcoin trading slang first.
✔️ 1. Fear, Uncertainty, and Doubt (FUD)
Undeniably, FUD is not a trading term, but traders use it in the context of the cryptocurrency market. FUD is one of the proficient and practical strategies to decrease the reputation of a particular coin or organization. In short, the precise aim of this strategy is to create uncertainty and doubts about a specific cryptocurrency. It can become a tactical benefit or make money from the decline of a cryptocurrency price by spreading false news.
Cryptocurrency traders have witnessed numerous incidents related to FUD, as many digital currency traders have shorted the position of a particular coin and then spread negative news regarding that coin. Bad actors have made millions of dollars in the cryptocurrency industry by only utilizing the FUD strategy. Unfortunately, the majority of the bad actors spread misleading or false news events, which creates a lot of panic in the market where paper hands decide to sell off their investments, leading to a decrease in the price of that currency.
✔️ 2. Fear of Missing Out (FOMO)
FOMO is a familiar feeling in the investment arena, whether in the stock market or cryptocurrency market. However, FOMO is witnessed significantly in the cryptocurrency industry because the profits are quick but massive. Fear of missing out is abbreviated as FOMO and, as the name suggests, is the feeling when investors flock to purchase a particular asset only because they fear that they might miss the opportunity to make a considerable profit. FOMO, if at an extreme level, can lead to a massive surge in cryptocurrency price, which further creates an economic bubble around that coin.
✔️ 3. HODL
HODL is the most commonly used slang in cryptocurrency trading as it is derived from the HOLD, and someone misspelt it on social media. HODL represent the purchase-and-hold strategy in the cryptocurrency industry, which means people keep holding their bitcoin or any other cryptocurrency investments despite the major pitfalls or price slumps. In short, HOLDERS believe in long-term investing rather than focusing on quick profits from digital currencies. HODLERs believe that a decentralized monetary system is the future of money. Let's now understand some of the famous bitcoin trading terms.
✔️ Technical Analysis:
Technical analysis is a frequently utilized method to analyze the economic environment. Technical analysis is performed in cryptocurrency, stock and commodity markets; undeniably, technical analysis is straightforward to understand, but mastering technical analysis is not a piece of cake. When performing technical analysis, a beginner faces many challenges and performs some significant blunders under pressure.
However, some common mistakes subjected to technical analysis are overtrading and the inability to cut capital losses. Whenever a trader performs technical analysis, they utilize historical charts, market sentiments, and live price charts to gain the maximum benefit. A bitcoin trader must be devoid of emotions while performing the act, and decisions must be based on pure statistics.
✔️ Fundamental analysis:
Fundamental analysis is the act of determining the real-time value of a particular asset. Fundamental analysis studies include economic and financial characteristics to assess the value of an asset. In addition, fundamental analysis incurs macroeconomic situations such as the sentiments of the global economy. Therefore, industry states and the organizations linked to that particular cryptocurrency correspondingly play an essential role while performing the fundamental analysis.
Once the trader successfully performs fundamental analysis, the trader can assess whether the asset is trading at a higher or lower value. Traders can use the closure of an asset's valuation while deciding whether to trade.
In the case of digital currencies, this type of analysis can incur a new flanged field of databases linked with blockchain technology. For example, hash rate, the number of cryptocurrency investors, and the number of wallet addresses active in a particular digital ecosystem are some databases traders must analyze while performing fundamental analysis.
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