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Crypto Trading Knowledge Base

📊 Basic Trading Terms​

  • Spot Market - A market where cryptocurrencies are bought and sold immediately at the current price.
  • Futures (Perpetuals) - Contracts that allow leveraged trading without holding the underlying asset.
  • Margin Trading - Trading with borrowed funds to increase position size.
  • Leverage - The ratio of borrowed funds to own capital (e.g., 10x leverage means trading with 10x the initial amount).
  • Liquidation - When the price reaches a level where the exchange forcibly closes a position due to insufficient margin.

📈 Technical Analysis​

  • Support & Resistance - Key price levels where the price often reacts. Support acts as a floor, and resistance as a ceiling.
  • Trend - The direction in which price moves (uptrend = rising, downtrend = falling).
  • Breakout - The price breaking through a significant level.
  • Pullback - A temporary price correction within a trend.
  • Divergence - When price and an indicator (e.g., RSI) move in opposite directions, possibly signaling a reversal.
  • Order Block (OB) - A price zone where large institutions have placed significant buy or sell orders.

💰 Volume & Liquidity​

  • Volume - The total number of assets traded; higher volume indicates greater interest and liquidity.
  • Open Interest (OI) - The number of open futures contracts, showing market activity.
  • Delta - The difference between buying and selling volume.
  • Cumulative Delta (CVD) - The cumulative sum of delta, indicating whether buyers or sellers dominate.
  • Liquidity Pools - Areas where stop-losses and liquidations accumulate, often attracting price movements.

⚡ Trading Strategies​

  • Scalping - Quick trades on small price movements.
  • Day Trading - Opening and closing trades within a single day.
  • Swing Trading - Holding trades for days or weeks to capture larger price moves.
  • HODL - A long-term strategy of holding crypto regardless of volatility.
  • DCA (Dollar-Cost Averaging) - Investing a fixed amount at regular intervals to reduce the impact of volatility.

🔥 Order Types​

  • Market Order - An order that executes immediately at the best available price.
  • Limit Order - An order to buy or sell at a specific price.
  • Stop Loss (SL) - A predefined price to exit a losing trade.
  • Take Profit (TP) - A predefined price to secure profits.
  • Stop Limit - A combination of a stop-loss and a limit order.

🏦 DeFi & Blockchain​

  • DEX (Decentralized Exchange) - A non-custodial exchange that enables direct peer-to-peer trading (e.g., Uniswap, PancakeSwap).
  • CEX (Centralized Exchange) - A traditional exchange with an order book (e.g., Binance, Bybit).
  • Staking - Locking crypto to earn rewards.
  • Yield Farming - Providing liquidity to earn interest.
  • NFT (Non-Fungible Token) - A unique digital token often linked to art, gaming, or collectibles.

🔹 Key Price Levels​

Key levels are important price areas where price often halts, reverses, or consolidates.

📌 Important Key Levels:​

  • Support & Resistance (S/R) → Price levels where the market reacts.
  • High Timeframe Levels (HTF S/R) → Key levels on higher timeframes (1D, 1W, 1M).
  • Previous Day High/Low (PDH/PDL) → The high and low from the previous day, crucial for intraday traders.
  • Previous Week High/Low (PWH/PWL) → The high and low from the previous week, important for swing traders.
  • Previous Month High/Low (PMH/PML) → Key levels from the previous month.
  • Liquidity Pools → Areas where liquidity accumulates (stop-losses, limit orders).

📅 Monday Range - A Key Trading Concept​

🔍 What is the Monday Range?​

The Monday Range is the price range formed on Monday (00:00 - 23:59 UTC).
It is significant because it sets the week's market sentiment and often acts as a liquidity magnet.

📌 Monday Range Structure:​

  • Monday High (MH) → The highest price reached on Monday.
  • Monday Low (ML) → The lowest price reached on Monday.
  • Monday Open (MO) → The opening price on Monday.
  • Monday Mid (MM) → The midpoint between MH and ML, often a key area for mean reversion strategies.

📈 Monday Range Trading Strategies​

  1. Breakout & Retest → If price breaks MH/ML and retests it, this confirms a continuation.
  2. Fakeout & Reversion → If price briefly breaks MH/ML but returns inside the range, trade back to the midpoint.
  3. Liquidity Hunt → If large stop-losses sit above MH/ML, watch for price manipulation before a strong reversal.
  4. Bias Confirmation → If price rejects MH on Tuesday, the weekly bias may turn bearish.