This glossary is designed to help both beginners and intermediate traders navigate the terminology used in high-stakes, fast-paced trading environments:

📘 Glossary of Terms – High Leverage Crypto Futures Day Trading

A

• API (Application Programming Interface): A set of tools allowing third-party software to connect with an exchange for automated trading, data collection, or bots.
• ATH (All-Time High): The highest price a cryptocurrency has ever reached.
• ATL (All-Time Low): The lowest price a cryptocurrency has ever reached.
• Auto-Deleveraging (ADL): A risk management process where highly leveraged positions are automatically reduced to maintain platform solvency.

B

• Bear Market: A market condition characterized by falling prices and pessimism.
• Bid: The highest price a buyer is willing to pay for an asset.
• Breakout: A significant price movement outside a defined support/resistance level, often leading to volatility.
• Bull Market: A market condition characterized by rising prices and optimism.
• Buy Liquidation: When a short position is force-closed because the price rises too high.

C

• Candlestick Chart: A chart showing price movements using candle-shaped figures that display open, close, high, and low for a specific timeframe.
• Collateral: Assets pledged to open a futures position (usually stablecoins like USDT or the crypto itself).
• Cross Margin: A margin mode where all available balance in an account is used to avoid liquidation.
• CEX (Centralized Exchange): Platforms like Binance, Bybit, and KuCoin where users can trade crypto via a central authority.

D

• Deleveraging: Reducing leverage on a trade or portfolio to reduce risk.
• Degen (Degenerate Trader): A slang term for a reckless trader who uses excessive leverage without proper risk management.
• Divergence: When the price moves in the opposite direction of an indicator (e.g., RSI), often a reversal signal.
• Drawdown: A reduction in equity from a peak due to a series of losing trades.

E

• Entry Price: The price at which a trader opens a position.
• EMA (Exponential Moving Average): A moving average that gives more weight to recent prices, used for trend analysis.
• Exit Strategy: A plan for closing a trade at a certain price or condition.

F

• FOMO (Fear of Missing Out): Emotional trading caused by seeing a price rapidly rising and jumping in too late.
• Funding Rate: Periodic payments between long and short positions to keep futures prices in line with spot markets.
• Futures Contract: A financial derivative allowing traders to speculate on the future price of an asset with leverage.

G

• Grid Trading: A strategy that places buy/sell orders at regular intervals above and below a set price.
• Gigaleverage: Slang for extremely high leverage, e.g., 100x or more.

H

• Hedging: Opening a position in the opposite direction of your primary trade to reduce potential losses.
• High-Frequency Trading (HFT): Algorithmic trading strategy using fast computers to execute many orders at once.

I

• Initial Margin: The minimum collateral required to open a leveraged position.
• Impermanent Loss: Temporary loss in value when providing liquidity to AMMs (not directly related to futures but worth noting).

L

• Leverage: Using borrowed funds to increase position size. E.g., 10x leverage means $1,000 can control a $10,000 position.
• Limit Order: An order to buy or sell at a specific price.
• Liquidation: Forced closing of a position due to margin loss when collateral is insufficient.
• Long (Going Long): Buying an asset expecting its price to rise.

M

• Maker/Taker Fees: Fees charged depending on whether you add liquidity (maker) or take liquidity (taker) from the order book.
• Margin: The amount of capital required to open or maintain a position.
• Mark Price: A fair price used by exchanges to calculate liquidation, based on spot price and funding.
• Market Order: An order to buy or sell at the best available price.

O

• Open Interest (OI): The total number of open futures contracts in the market.
• Order Book: A real-time list of buy and sell orders on an exchange.

P

• PnL (Profit and Loss): The result of a trade – how much money was gained or lost.
• Position Size: The total value of a position, calculated as margin * leverage.
• Post-Only Order: An order that only adds liquidity to the order book (no taker fees).
• Perpetual Contract (Perps): A type of futures contract with no expiry date, widely used in crypto trading.

R

• R:R Ratio (Risk:Reward Ratio): A ratio comparing potential loss vs. potential gain. A 1:3 R:R means risking $1 to gain $3.
• Rekt: Slang for experiencing a huge loss or liquidation.
• ROI (Return on Investment): Profit percentage made relative to the initial investment.

S

• Scalping: A short-term trading strategy that profits from small price changes.
• Short (Going Short): Selling an asset expecting its price to drop.
• SL (Stop Loss): A predefined order to close a trade at a certain loss level to prevent further loss.
• Spot Market: The standard market for buying/selling assets without leverage.
• Support/Resistance: Price levels where buying/selling pressure historically reverses the price.

T

• Take Profit (TP): A predefined order to close a trade at a certain profit level.
• Trailing Stop: A dynamic stop loss that adjusts as the market moves in your favor.
• Technical Analysis (TA): Analyzing price action, charts, and indicators to forecast future movements.
• Trend Reversal: A change in market direction, from uptrend to downtrend or vice versa.

U

• Unrealized PnL: Profit or loss on an open position that hasn’t been closed yet.

V

• Volume: The total amount of an asset traded in a period.
• Volatility: The degree of price variation over time; high in crypto markets.

W

• Wick: The thin lines above/below a candlestick body, showing price extremes during a timeframe.
• Whale: A trader or entity that holds and trades large volumes, capable of moving the market.

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