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Crypto Trading Glossary

At Quadency, we work hard to make the more technical elements of the platform easier to follow. Even then we understand trading jargon can be confusing, particularly when it comes to automation.

So to help we've created this central Glossary to explain many of the terms you will come across while trading with Quadency.

Last updated on February 1st 2021
note: glossary enhancements to take place monthly as terms expand

Algorithmic trading: A trading process in which a computer program follows a defined set of instructions to place a trade. It is also known as bot trading or algo-trading.

Allocation: The allocation is the distribution of your portfolio assets.

Altcoin: An Altcoin is cryptocurrency that is alternative to Bitcoin: Ethereum, Ripple, Bitcoin Cash and others are Altcoins.

Amount Per Order: Enter the amount or quantity of base currency to use for limit orders. For example, if you're trading BAT/BTC, enter the number of BAT for each order.

API Keys: An API (Application Programming Interface) is a way for systems to communicate with each other. API keys are used to authenticate users and identify what account is being accessed.

Base/Quote Currency: The base currency is the one you want to buy or sell. For each pair the Base currency is priced in a Quote currency. For example, if you're trading ETH/BTC, ETH is the base currency: it's the one you buy or sell. Meanwhile, BTC is the quote currency, you will buy ETH using BTC or receive BTC if you sell ETH.

Bear Market: A Bear Market is a negative trend of a market. During a bear cycle, prices are declining or are expected to decline.

Bid-Ask Spread: The bid-ask spread is the amount by which the ask price exceeds the bid price for an asset in the market. In other words, it is the difference between the lowest price someone is willing to sell and the highest price a buyer is willing to pay.

Bollinger Bands:Bollinger Bands is a technical indicator developed by John Bollinger. It is used to measure a market’s volatility and identify “overbought” or “oversold” conditions.

Bots: They are automated trading software that execute trades extremely quickly, based on a preset algorithm.

Bull Market: A Bull Market is a positive trend of a market. During a Bull Market, prices are rising or are expected to rise.

Candle Timeframe: This is the bar timeframe on which to apply the technical indicator used in the strategy to make buy/sell/hold decisions. Signals for trading are generated at the end of each bar/candle. Shorter timeframes will result in more frequent trades and longer timeframes in fewer.

Cryptocurrency: A cryptocurrency, or digital currency, is a currency secured by a cryptographic protocol and is typically used as a medium of exchange within a peer-to-peer economic system.

Decentralized Finance (DeFi): DeFi is an ecosystem of decentralized financial services built on top of blockchain networks.

Decentralized Exchange (DeX): DeXes are similar to their centralized counterparts. However, all trades are on-chain transactions and no one takes custody of your funds.

Distance Between Buy Orders:Percent offset (in decimal form) for the first buy/sell order from the midpoint. The same distance is applied between the following buy/sell orders.

Distance Between Grids: The distance between grid lines used to place orders on. This is also known as profit per grid.

Divergence: The divergence is when the price of an asset and a technical indicator are heading in opposite directions.

DYOR: DYOR is an acronym for “Do Your Own Research”. It is a popular phrase used by cryptocurrency enthustiats.

Exchange: The exchange to run the bot on. It is a third party platform that facilitates the trading of cryptocurrencies.

Exchange Traded Fund (ETF): A security that tracks a basket of assets such as cryptocurrencies but can be traded like a single stock.

FIAT: A Fiat is a currency that a government has declared to be legal tender: USD, EUR, JPY, etc.

Fork: A fork is an alternate version of a blockchain. After a fork two blockchains run simultaneously. For example, Bitcoin Cash (BCH) is a fork of the Bitcoin (BTC) chain.

Fundamental Analysis: Fundamental Analysis is the process of evaluating an asset based on its underlying characteristics and traits as an effort towards arriving at an intrinsic value of the asset. It is often opposed to Technical Analysis.

Gas: It refers to the fee required to make a transaction or execute a contract on the Ethereum blockchain.

General Settings: On Quadency, general settings are the same for every pre-built strategy available in our library: Configuration name, exchange, account and market.

Grid Trading: Grid trading is a popular strategy that consist of placing orders above and below a set price, creating a grid of orders at incrementally increasing and decreasing prices. This strategy capitalize on the normal volatility of the market.

Gwei: The denomination used in defining the cost of gas in transactions involving Ethereum, 1 gwei = 0.000000001 ETH.

HODL (Hold On for Dear Life): HODL is coming from a misspelling of "hold" which refers to buy-and-hold Bitcoin and other cryptocurrencies rather than trading or selling.

Inventory Skew:The Inventory Skew lets you set and maintain a target inventory split between the base and quote assets. Available with Market Maker Plus, it prevents your portfolio balance from evolving towards one direction too much.

Level x Buy Amount: It is the amount of base currency per trade to buy at x RSI level

Liquidity: The liquidity is the ability to sell or buy any given asset without causing significant fluctuations in the market price for that asset.

MACD: The Moving Average Convergence Divergence (MACD) is a momentum indicators. It is calculated by Traders use it find buy entries and sell exits.

  • MACD Fast Period: Specify the look-back period (number of bars) for fast moving average calculation. It is also called short term moving average.

  • MACD Signal Period:This is nine-day EMA of the MACD called the "signal line", it can function as a trigger for buy and sell signals

  • MACD Slow Period: Specify the look-back period (number of bars) for slow moving average calculation. It is also called long term moving average.

Maker:Also referred as Market Maker, a Maker is a firm or individual who places order on both sides of the order book, simultaneously.

Maker Fee:Exchanges tend to differenciate fees between Takers and Makers. The Maker Fee is often lower than the Taker Fee as an incentive for adding liquidity to the market pair.

Market:The pair (symbol) to trade. Quadency's standard convention is Base/Quote.

Mean Reversion: Mean reversion is a financial term for the assumption that an asset price will tend to move to the average price over time.

Moving Average: Moving averages are calculated to identify the trend direction of a stock or to determine its support and resistance levels.

Number of Grids:Enter the number of grid lines to use. Generally higher is better if you have sufficient balance for good coverage of the trading range for the market being traded.

Non-Fungible Token (NFT): A non-fungible token is a type of token that is a unique digital asset and has no equal token unlike bitcoins which are interchangeable.

Order Replenish Delay:Time (in minutes) to wait before canceling unfilled orders once any order has been filled, and submitting a new set of orders.

Order Start Amount:The amount you wish to use for first buy and sell orders. In the example above, the order amount for first (innermost) buy and sell order will be 10.

Order Step Size:The amount to increment each consecutive order after the first one each side. In the example above, the second buy order size will be 12, the third 14 and so on. Same applies to the sell side.

Over Time Period: This is the length of time the bot will run. This time is also used to determine the number of orders the bot will send, spread evenly across this time period. In this example, the bot will run for 24 hours (or 1 day).

Order Type: When trading cryptocurrencies on an exchange there are often different types of orders available.

  • Market Order: A market order is a buy or sell order to be executed immediately at the current market prices. As long as there are buyers or sellers, the order will be filled.
  • Limit Order: A Limit Order allows traders to set the price at which they desire to buy or sell an asset. While the price is set in advance, this type of order doesn't guaranty that the order will be totally filled.
  • Stop Order: These are similar to Limit Orders, however when a certain price is reached, the order will become a market order and be filled at the next market price.
  • Trailing Stop Order: Unlike a Stop Order, where you set a price above or below the market price. With a trailing stop order, the stop is set as a percentage of the the market price.

Overbought: Overbought is a term used when an asset is believed to be trading at level currently above its value. It often implies a short-term correction of the market.

Oversold: This is the opposite of overbought. An oversold asset is thought to be traded below its value.

Portfolio: In finance, a portfolio is a collection of financial investments: stocks, bonds, cryptocurrencies, etc.

Position Type: Choose whether to go long (buy) or short (sell). If long, you must have sufficient quote currency to place an initial buy order, and if short, you must have sufficient base currency to place an initial sell order.

Rebalancing: Rebalancing a portfolio is a strategy used by traders to re-distribute their asset allocation periodically over time.

RSI: The Relative Strength Index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of an asset.

RSI Overbought Level: Level at which the bot will consider the asset overbought. At this level, a sell order will be triggered.

RSI Oversold Level: Level at which the bot will consider the asset oversold. At this level, it will trigger a buy order.

RSI Period: Enter the period (number of previous candles) to use for RSI calculations.

Satoshi (SATS): The smallest unit of bitcoin with a value of 0.00000001 BTC.

Smart Suggest: Smart Suggest is powered by Quadency's proprietary Hyper-Parameter Optimization Engine - a technology that leverages a swarm of cloud servers to concurrently process thousands of backtests daily by trying different parameters combinations for each bot.

Starting Capital:The starting capital is the amount of quote currency to allocate to a bot for trading.

Staking: Participation in a proof-of-stake (PoS) system to put your tokens in to serve as a validator to the blockchain and receive rewards.

Stop Loss Type: Indicate the type of stop-loss to use. "Fixed" is set as soon as the first order is made and calculated from the entry price. "Trailing" is adjusted in real-time as the market moves.

Stop Trigger: The value here determines when the bot should stop buying. The two options are Over Time Period and Total Amount to Spend.

Swap: A swap is an instant on-chain trade processed on Decentralized Exchanges.

Taker: The Taker is someone who decides to place an order on one side of the book only.

Target Base Percent: The proportion of base asset value to target.

Technical Analysis: Technical analysis is a form of trading analysis that analyses past prices to predict future price action. Traders use indicators such as RSI, MACD, Moving averages but also recognizable patterns.

Trading Fee: Exchanges apply fee when any order is filled. Usually the apply a maker/taker fee schedule. As Makers add liquidity, maker fees tend to be lower than taker fees.

  • A maker fee is applied when you create an order which does NOT match any existing ask orders when buying or when you are selling matches any existing bid orders.

  • A taker fee is applied when you create an order which will match any existing ask orders when you are buying or when you are selling will match any existing bid orders.

Trailing Stop: A Trailing Stop order is a Stop order with a limit that trails after the market price by a distance. The limit is set in a currency or in percentage.

Two-factor authentication (2FA): is a second layer of security to help protect an account or system from unauthorized users.

Volatility: Volatility represents an asset's prices swing around the average price. The bigger the prices swing, the higher the volatility.

Volume: Th Trading Volume is the total quantity of a single asset that was traded during a given period of time.

Whitelist: A Whitelist is a list of items that are granted access to a certain system or protocol.

Yield Farming: Yield farming is any effort to put crypto assets to work and generate the most returns possible using different DeFi platforms.

YTD: Stands for Year to Date.