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Crypto Trading Terms

Updated: May 10, 2022


HODLing refers to holding on to investments despite price drops. It's also commonly used in the context of investors ("HODLers") who admittedly aren't good at short-term trading, but want to get price exposure to cryptocurrency. It may also be used for investors who have a high conviction in a particular coin and intend to hold on to their investment for a longer period.

The HODLing strategy is similar to the buy-and-hold investment strategy coming from the traditional markets. Buy and hold investors try to find undervalued assets and hold on to them for a long time. Many investors adopt this strategy for Bitcoin.

If you've read our dollar-cost averaging (DCA) article, you know that this would have been a highly profitable strategy for Bitcoin. If you've bought just $10 of BTC every week for the last five years, you'd be up more than seven times your original investment!


BUIDL is a derivative term of HODL. It usually describes participants of the cryptocurrency industry who continue to build regardless of price fluctuations. The main idea is that true believer of the crypto industry keep building the ecosystem regardless of brutal bear markets. In this sense, "BUIDLers" genuinely care about what blockchain and cryptocurrencies can bring to the world, and they are actively working towards this goal.

BUIDL is a mindset that aims to exemplify how cryptocurrencies aren't just about speculation, but about bringing this technology to the masses. It acts as a reminder to keep our heads down and keep building the infrastructure that may very well serve billions of people in the future. In addition, BUIDLers understand that the teams that keep building with a long-term mindset will likely do well over the long-run.

Return on Investment (ROI)

Return on Investment (ROI) is a way to measure an investment's performance. ROI measures the returns of an investment relative to the original cost. It's also a convenient way to compare the performance of different investments.

Here's how you calculate ROI. You take the current value of the investment and subtract the original cost of the investment. Then you divide that number by the original cost.

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

Let's say you bought Bitcoin at $6,000. The current market price of Bitcoin is now $8,000.

ROI = (8000-6000)/6000

ROI = 0.33

This means that you're 33% up from your original investment. It's also worth taking into account the fees (or interest rate) that you have to pay to get a more accurate picture.

Raw numbers aren't the whole picture, however. When comparing investments, other factors are also at play. What are the risks? What is the time horizon? How liquid is the asset? Can slippage affect your purchase price? ROI isn't the ultimate metric by itself, but it's a useful tool to measure your investments' performance.

Calculating position size is crucial when thinking about investment returns. If you'd like to read about a simple formula that will help you effectively manage risk, check out How to Calculate Position Size in Trading.

All-Time High (ATH)

We probably don't have to explain this one, do we? The All-Time High is the highest recorded price of an asset.

One compelling aspect of an asset reaching All-Time High is the idea that almost everyone who ever bought is in profit. If an asset has been in a prolonged bear market, many traders holding losing bags will likely want to exit the market when their position reaches break-even.

However, if the asset breaches its ATH, there aren’t any sellers left who are waiting to exit at break-even. This is why some refer to ATH breaches as "blue sky breakouts," as there aren't necessarily any obvious resistance areas ahead.

ATH breaches are also often accompanied by a spike in trading volume. Why? Day traders may also jump on the opportunity with market orders to make a quick profit and sell at a higher price.

Does breaching the ATH mean that the price will just keep going up forever? Of course not. Traders and investors will look to take profits at some point and may set limit orders at certain price levels. This is especially true if previous All-Time High levels keep getting breached again and again.

Parabolic moves can often end up in very sharp price drops, as many investors rush to the exit once they realize the uptrend may be coming to an end. This is why it's always crucial to manage risk and always use a stop-loss.

All-Time-Low (ATL)

The opposite of ATH, the All-Time Low (ATL), is the lowest price of an asset. For example, the All-Time Low of APE was 6.21 US.

Breaking an All-Time Low on an asset can lead to a similar effect as when breaking the All-Time High – but in the opposite direction. Many stop orders may trigger when the previous All-Time Low is breached, leading to a sharp move down.

Since there is no price history below the previous All-Time Low, the market value can just keep going down, drifting lower and lower. Since there aren't necessarily logical points for it to stop, buying during such times is very risky.

Many traders will wait for a confirmed trend change by an important moving average or some other indicator to even consider entering a long position. Otherwise, they could end up holding the bag for a long time, trapped in a position that keeps going lower and lower.

Anti Money Laundering (AML)

Anti Money Laundering (AML) refers to a number of regulations, laws, and procedures that aim to prevent criminals from disguising their illegally obtained money as legitimate income. AML procedures make it much harder for criminals to "launder" their money clean by hiding it or disguising it as coming from legitimate sources.

Criminals will always look for ways to conceal the true source of their funds. Due to the complexity of the financial markets, there can be many different ways to do that. Derivatives products made up of derivatives products, and other complex market machinations can make tracing the true source of funds quite difficult (though not impossible).

AML regulations require financial institutions such as banks to monitor the transactions of their customers and report on suspicious activity. This way, criminals are less likely to get away with laundering illegally obtained funds.

Know Your Customer (KYC)

Stock exchanges and trading platforms have to comply with national and international guidelines. For example, the New York Stock Exchange (NYSE) and the NASDAQ have to comply with regulations set by the United States government.

Know Your Customer (KYC) or Know Your Client guidelines ensure that institutions facilitating the trading of financial instruments verify their customers' identity. Why is this important? The main reason behind it is to minimize the risk of money laundering.

In addition, KYC regulations aren't only valid for participants of the financial industry. Many other segments also have to comply with these guidelines. KYC guidelines are generally a piece of a much broader Anti Money Laundering (AML) policy.

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