The following 15 tips will help novices understand the currency circle in seconds
Explanations of terms that you must know when entering the currency circle (a must-read for beginners) Regarding the explanations of terms in the currency circle, friends who are just getting started can take a look.
1. What is fiat currency? Legal currency is legal currency, which is issued by the country and the government and is only guaranteed by government credit, such as RMB, US dollars, etc.
2. What does .Token mean? Token is usually translated as pass. Token is one of the important concepts in the blockchain. It is more commonly known as "token", but in the eyes of professional "chain circle" people, its more accurate translation is "pass", which represents the area. A proof of equity on the blockchain, not a currency. In the traditional value system, only things that can be recorded on the ledger can be exchanged for value and circulated. Therefore, accounting is the basis for generating wealth. However, in the real world, most things cannot be quantified, and the things that can be accounted for are extremely limited. But "Token" does. The magic thing about this is that Token can record physical assets and virtual digital assets digitally.
3. What does airdrop mean? Airdrop is a very popular cryptocurrency marketing method. In order to allow potential investors and cryptocurrency enthusiasts to obtain token-related information, the token team will regularly distribute unknown tokens to the accounts of participants in the cryptocurrency circle, and the number is proportional to the number of original tokens. If you want to get more airdrops, you must buy more tokens. This is a very effective marketing method.
4. What is candy? When various digital currencies are first issued and in the ICO stage, the digital currencies distributed to users for free are a form of publicity and promotion for the project itself by the issuer of the virtual currency project.
5. What does "break the issue price" mean? "Issuance price" refers to the issue price of a digital currency, and "break the issue price" means that a certain digital currency falls below the issue price.
6. What does private placement mean? It is a way to invest in cryptocurrency projects and the best way for cryptocurrency project founders to raise funds for platform operations. Private placement is relative to public offering. In short, it means raising funds privately, which means selling stocks (cryptocurrency) to small-scale qualified investors without going through the open market to obtain funds.
7. What does ICO mean? Initial Coin Offering, derived from the concept of initial public offering (IPO) in the stock market, is a financing behavior in which a blockchain project exchanges its own virtual currency for the commonly used virtual currency in the market.
8. What are the current cryptocurrency trading platforms? Binance, OKEx, Poloniex, Bittrex, Bitfinex, Kraken, Huobi Pro, Gate, etc. 1. Basic features of cryptocurrency trading: (1) Trading hours: 7*24 hours, all year round. (2) No price limits: There are no price limits for cryptocurrency trading, but there are price limits for stocks. For example, on May 28, Bitcoin rose by more than 20% in a single day. (3) Trading unit: The minimum purchase amount is 0.0001BTC (about 0.6 yuan), and there is no minimum purchase limit of one lot (100 shares) for stocks. (4) Trading at any time: T+0, stocks are traded on a T+1 basis, that is, stocks can be bought on the same day and can only be sold on the next trading day. Cryptocurrencies are traded on a T+0 basis, and can be sold on the same day they are bought. (5) No time limit for withdrawal and cashing out: You can withdraw and cash out at any time, and the liquidity of funds is high.
9. Wallet concept Generally speaking, it is equivalent to a personal bank card. If you are not sure about storing virtual currency on the trading platform, you can store it in your personal wallet. There are many types of wallets. There are wallets that only correspond to a single currency, such as wallets that can only store EOS, and there are wallets that can store multiple currencies, such as imToken, Tokenpocket (TP wallet for short). The latter is more widely used.
10. Good news/bad news All kinds of news that are conducive to stimulating price increases are called good news. On the contrary, all kinds of news that cause the price of coins to fall are called bad news, such as the trading platform being hacked and the Bitcoin being stolen or the country suppressing and other unfavorable information.
11. Public chain / Private chain / Alliance chain Public chain refers to a blockchain where anyone can participate in transactions and transactions can be effectively confirmed. At present, most blockchain systems are public chains, such as Bitcoin and Ethereum. Public chains are suitable for application scenarios where everyone participates in full name maintenance, such as mutual insurance. Private chain refers to a blockchain where write permissions are only for a certain organization or specific object. Read permissions can be released to the outside or restricted to any degree. Developing enterprise-level applications based on private chains helps enterprises realize on-chain business. The tamper-proof nature of on-chain information helps to enhance the social credibility of enterprises and enhance the confidence of investors and investment institutions in enterprises. Alliance chain refers to a blockchain whose consensus mechanism is jointly controlled by several institutions. The credit mechanism is jointly maintained by these institutions. The legitimacy of all transactions needs to be confirmed by most or all institutions before they can be written into the blockchain and become legal block records. Imagine that in the financial industry, a blockchain alliance is established by several socially credible financial institutions, each of which runs a mining node. These institutions exercise the right of consensus on behalf of all participants to maintain the normal growth and operation of this blockchain.
12. Rebound / Consolidation / Pullback The occasional rebound of the price of digital currency under the general trend of falling prices is called a rebound, and the rebound is smaller than the decline. Pullback is just the opposite. A temporary decline under the general trend of rising prices is called a pullback. Consolidation means that the price of the entire currency is relatively stable, with small changes and no fluctuations. 1. Brick Moving It means that the same currency is transferred from a low-priced trading platform to a high-priced trading platform, and the difference is used to make a profit.
13. Leverage Leveraged trading, as the name suggests, is to use a small amount of funds to invest several times the original funds, in the hope of obtaining returns several times the volatility of the investment target, or losses, which is a bit like gambling.
14. Basic principles of virtual currency transactions
(1) Market price trading: Trading at the current market price can, to a certain extent, ensure that investors’ buy and sell orders are executed in a timely manner. However, at the same time, investors cannot predict the transaction price before placing a market price order, which leads to a certain degree of uncertainty. Generally speaking, the more volatile the market, the greater the risk of uncertainty in the transaction price of market price trading.
(2) Limit Price Trading: Investors can set a buy price lower than the market price, or a sell price higher than the market price. When the market price fluctuates to the set price, the transaction is completed. When the set price deviates greatly from the market price, it is easy to fail to complete the transaction.
(3) Basic principles of transaction: “price first, time first” principle. A higher buying price is better than a lower buying price, a lower selling price is better than a higher selling price. When the order prices are the same, an order placed earlier is better than an order placed later.
15. Detailed explanation of common professional terms during the transaction process
【Turnover Rate】 refers to the frequency of a currency being bought and sold in the market within a certain period of time. It is one of the main indicators for evaluating the liquidity of a currency.
[Market Trading] means buying and selling transactions at the current price. Market trading has transaction priority. If you complete the transaction faster, you can use market trading.
[Limit Price Trading] is a transaction in which a buy or sell is made at a specified price, also known as a commission transaction or a pending order transaction.
[Counter-trading] is a trading method used by bankers. The specific operation method is to open accounts in multiple exchanges at the same time, and quote and trade between various exchanges in a seesaw manner to achieve the purpose of manipulating the currency price.
[Washing the market] is a method used by bankers to manipulate the price of coins and deliberately lower the price of coins. The specific method is to first raise the price of coins and then sell them for profit. During this period, the main force often intentionally places a large sell order to suppress the market, forcing low-price buyers to sell digital currencies to reduce the pressure of raising the price. This method can easily raise the price of coins.
[Market Support] When the price is low and the currency is not popular enough, large investors buy a large amount of the currency to prevent the price from falling further.
[Bull Market] refers to a general rise in the market, a continuous upward trend, and an optimistic outlook. (In the cryptocurrency world, it is mainly the rise of BTC that leads the rise of other mainstream coins and altcoins)
[Bear Market] The opposite of a bull market, it refers to a phenomenon where the market price continues to decline, market sentiment is low, and the market continues to fall. (You are currently experiencing a bear market. At this stage, the most important thing is that we need to survive. Then there are further actions, such as hoarding coins and bottom-fishing.)
[Monkey Market] I believe that many people do not understand this, but it exists in the stock market. Why is it called the Monkey Market? Monkeys like to jump up and down, which corresponds to the ups and downs of our market. In the Monkey Market stage, the market is not easy to grasp. (The mainstream may rise today and fall tomorrow, or some copycats may rise and some copycats may plunge.)
[Main rising wave] Derived from the wave theory, it refers to the longest-lasting wave in the rising market. This is also a common trend in the bull market. If you catch the main rising wave, you will make a lot of money. The opposite trend is also called the "main falling wave".
[Declining] The overall market trend is downward, but the trend is often up for two days and down for one day, which always gives people hope but always disappoints them.
[Waterfall] refers to the sudden sharp decline in the market, with several gorgeous large negative lines appearing in front of the audience in a short period of time, just like a waterfall, rushing down, making people feel painful and heartbroken. Some people also call it "diving".
[Blowout] The market is affected by negative factors and is in a long-term slump. During this period, the market will be very depressed. When the negative factors are eliminated or the negative factors are removed, the market will show an explosive rise.
[Washing the market] Large financial groups with funds, such as bankers or project owners, manipulate the market through funds, causing the market trend to rise and fall, scaring off those hesitant investors and achieving the goal of making huge profits.
[Accumulate funds] Generally, the market makers will wash out the leeks through washing the market, and then the bankers will take over the coins sold by the leeks, so that they have more chips in their hands, so as to achieve the purpose of controlling the market (generally, operations such as accumulating funds will be carried out at a low price)
[Control the market] It's very simple. I have a lot of money (the proportion of the coins in circulation is large), and I can make the market go up or down by just flipping it a few times. The purpose is very simple, to make more money and get more leeks. [Cut the leeks] Some people who lost money in the coin trading leave the market, and some new people enter the market, just like leeks, and they are cut one after another. The happiest person is the banker.
[Cheating] The market makers use K-line to create an upward or downward trend, making us buy or sell, thus achieving their goal of cutting leeks.
【Bonus】 Also called favorable news. It mainly refers to good news. In most people's eyes, bullish news will definitely lead to a rise in prices. In fact, this is not the case. Bullish news and unfavorable news are not directly proportional to the rise in the market. They just have a certain impact and will stimulate the market.
[Bad news] is also news, mostly refers to news that is unfavorable to the market. However, there is also such a saying in the market: when bad news is exhausted, good news will come.
[Luring longs] The price of a currency has been consolidating for a long time, and the possibility of falling is relatively high. Most of the shorts have sold virtual currencies. Suddenly, the shorts raise the price of the currency, inducing the longs to think that the price of the currency will rise, and they buy in one after another. As a result, the shorts suppress the price of the currency, and the longs are trapped. [Luring shorts] After the longs buy virtual currencies, they deliberately suppress the price of the currency, making the shorts think that the price of the currency will fall, and they sell out one after another, and end up falling into the trap of the longs.
[Position] This is very simple, it is the ratio of your account funds to the funds you use to buy coins.
【Full Position】 All the account funds are used to buy Bitcoin. You often say "full position" and "all in" are all full positions.
[Replenishment] For example, if you hold BTC and then the price of BTC falls, you buy more BTC to spread the cost.
[Adding to a position] You hold BTC and are optimistic about the development of BTC, so you buy some more BTC as BTC rises. [Building a position] Also called opening a position. It means buying a certain amount of currency with account funds.
[Reduce positions] Expect risks in the future market, and sell some of the currencies held.
【Locked Position】 People who do leveraged futures should know this. It's very simple. If you do leveraged EOS futures, you buy a long order of 10,000, and then open a short order of 10,000. Think about it carefully and consider your position. 【Short Position】 Don't do it anymore, just watch the show. This can be understood in the currency circle. The account only has USDT, no other currencies. 【Light Position】 The funds of the purchased currency account for a very small proportion of the total funds. 【Heavy Position】 The funds of the purchased currency account for a large proportion of the total funds. 【Half Position】 The funds of the purchased currency account for half of the total funds. 【Clear Position】 Don't play anymore, sell all the coins, and prepare to wait and see with a short position.
[Stop Profit] After obtaining a certain amount of profit, sell all virtual currencies to keep the profit
[Stop Loss] When the loss reaches a certain level, sell the virtual currency held to prevent the loss from further expanding. [Sideways] The market fluctuates slightly, and the rise and fall are around a range.
[Rebound] When the price of a currency is falling, it receives technical support or capital intervention, and the market turns from falling to rising.
[Reversal] The price of the currency has bottomed out, and it has fallen to the point where it can no longer fall, and the downward trend has turned into an upward trend. The most common type of reversal is the "V-shaped reversal". Rebound is the basis of reversal, and the magnitude of reversal is much greater than rebound. [Moving Arbitrage] It is very simple to understand, just look at the price difference between the platforms and earn the price difference across platforms. What you need to pay attention to when moving arbitrage is the speed of currency transfer, which may sometimes affect your income.
[Over-the-counter trading] Many platforms are also called fiat currency trading. The platform acts as a guarantee, and merchants or individuals can directly trade in RMB to buy or sell mainstream currencies or USDT in their hands. The transaction is similar to Taobao (you know what I mean). [Selling at a loss] A better name is "cutting a position". One thing some of you often do is sell even when the price drops, for fear that it will fall even more.
[Being trapped] You buy a coin, and it goes down in price, but you can’t bear to sell it. Congratulations, this is called being trapped.
[Untie] The coin you bought fell, and you were very sad. After a period of time, it rose again, and you were untied, and you were very happy again.
[Missing the opportunity] When the market is bad, you buy. When the market is up, you wait and see. This is called missing the opportunity.
[Roller Coaster] The coin you bought goes up, you are very excited, and brag to your friends, but a few days later it falls back. It's like riding a roller coaster, it's just exciting for a while, and then there's nothing else.
[Hoard coins] You are optimistic about the future development of this coin and want to make it tenfold, a hundredfold, or a thousandfold to achieve financial freedom. Then you buy a large amount of this coin and hoard it.
[Going Long] Also known as "bulls", the buyer believes that the price of the currency will rise in the future, buys the currency, and then sells it at a high price after the price rises.
[Short selling] Also known as "short selling", the opposite of long selling, the seller believes that the price of the currency will fall in the future, so he sells the currency he holds (or borrows the currency from the trading platform), and then buys it at a low price to make a profit after the price of the currency falls.
[Mining] The process of using computers, mobile phones and other devices to run computing programs to obtain digital currency. Please note: mining will shorten the service life of the equipment.
【ICO】 Initial Coin Offering, originated from the concept of initial public offering (IPO) in the stock market. It is a financing behavior in which a blockchain project uses its own virtual currency in exchange for virtual currency commonly circulated in the market.
[Private Equity Round] Private equity is relative to public equity. Public equity refers to the act of raising funds from an unspecified group of people, such as funds sold by banks; while private equity aims to raise funds from a specific group of people and cannot be advertised publicly.
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