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Termsheet#

Hold#

A Hold is holding your assets. The assets itself can be held for a considerable amount of time. A hold basically just means that if you hold it, you keep it in your wallet for a certain amount of time.

Fiat#

Fiat is any kind of government issued currency that is not backed by any kind of commodity such as gold or silver.

Margin#

Margin trading is using funds of other traders, who earn interest based on the market demand for funds. Margin trading is less common among cryptocurrency in comparison to the stock market however, it certainly exists.

Short#

A short (or shorting) means that you're aiming to sell an asset at a short-ratio in the aims of buying it when it hits a lower price. Basically, it is short-term selling; you buy in at a price, aiming to sell higher, wanting to buy in lower.

Long#

A long is taking on the position of investing in the same way as when you buy a stock, you buy it in at a position where you are comfortable with, aiming to let it increase over time (months to years, usually).

Bid#

A bid is the maximum price that a buyer is willing to pay for an asset. The bid price in most exchanges is depicted within the order book.

Ask#

'Ask' refers to the minimum price a seller is willing to receive for their assets on the market. Just like with the 'bid', the 'ask' is depicted within the order book.

Spread#

A spread is the difference between the buy and sell prices that are quoted. Within spreads there are spread bets in which a trader makes a decision on whether the price of the coin might go up or down and will then make a profit or a loss based on whether their prediction is correct or not. The greater the price movement, the greater the profit or loss.

Fee#

A fee is the cost of the transaction costs when buying and/or transferring from one wallet to another wallet. Most exchanges have an innate fee based off a percentage, which you then have to pay upon every transaction.

Realised drawdown#

The realised drawdown is the percentage between the peak and the subsequent trough, meaning that if a trading account has 1000 USD in it, and the funds drop to 900USD before moving back to anything above 1000USD, then the trading account witnessed a 10% drawdown. If the trader sells at that point, it is a realised drawdown, given it has come to realisation.

Seen drawdown#

The seen drawdown is the percentage between the peak and the same as a realised drawdown, except that with the realised drawdown, you actually sold, and witnessed a drawdown. The seen drawdown is merely the peak-to-trough that has been witnessed.

Market change#

A market change depicts the change in the market from a 'bear' market, a stable market, or a 'bull' market. The meaning between these is that in a 'bear' market, the market itself is declining and it encourages selling, however crypto can be bought at a lower price during this market. In contrary, a 'bull' market encourages buying, but selling during a 'bull' market, profits can easily be made given the market trend is on the uprise. A stable market is a market that is mostly stable, slightly going up and down; a change between markets is what would be called a market change.

TA#

Technical Analysis (TA) is the historical analysis of a cryptocurrency, describing and analyzing the historic price and volume to predict a future movement of assets via the hands of several indicators such as the EMA, MACD, UO, and so forth.

ROI#

Return On Investment (ROI) is widely known in cryptocurrency, it is a ratio or percentage value that represents profitability or efficiency of a certain trade or agreement. It is a tool that's widely used - including strategies for DemaTrading. ROI can be portrayed in an absolute ratio (such as 0.35) or a value percentage (such as 35%). The calculation for ROI is as followed:

ROI = (Current Value - Total Cost) / Total Cost

A simple example would be as followed:

Mary bought 100 BTC at a price of 1,000 USD, paying 10 dollars for each BTC. If the current price of BTC is 20 dollars, Mary would have reached an ROI of 1.00 or 100%.

However, there are some limitations to ROI in itself as it does not take time in consideration. This means the efficiency is lower than it should be if a lot of time passes in comparison to an earlier timeslot. Let's show you via the hands of a quick example, using Mary again!

Mary's BTC is worth 18 per BTC after 6 months of her initial investment of 1,000 USD (100 BTC). She waits another 6 months for a total of 12 months, causing the BTC to be worth 19 USD per BTC after the 12 months. During this period there were ups and downs, and thus a second trade could have made Mary more money if she had traded at the 6 month mark; the time lost along with the fact she could've traded yet again lowering the efficiency.

Stop Loss#

A Stop-Loss is an advanced order that is used by traders that limits any form of additional losses. When a specific price is met, the order is triggered.

An example would be that buying in at 100 would stop any form of losses at 95. In this case the stop-loss treshold would be -5%. Similarly, it can be done for a profit where one can set it to +5%, which in turn would mean the profit would be capped at 105.

OHLCV#

OHLCV, also known as:

  • Open: the moment at which the candle starts.
  • High: the highest point during the candle, usually depicted with a thin green line (if the current close went up in comparison to the previous close) or a thin red line (if the current close went down in comparison to the previous close) that sticks out of the close.
  • Low: the lowest point during the candle, usually depicted with a thin red line (if the current close went down in comparison to the previous close) or a thin green line (if the current close went up in comparison to the previous close) that sticks out of the close.
  • Close: the point at which the candle closes, the close dictates whether a candle ends up green or red after comparing it to the previous close (green if up, red if down)
  • Volume: the total amount traded during this time period.

Can be used to trade in an easy fashion as it takes all five of these time points in consideration.

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