As you delve deeper into the crypto trading world, you’re going to come across a fair amount of technical analysis focused terms and phrases. Traders use technical analysis to discover market trends and resistance levels to help predict the future. However, some of the words analysts use can be confusing and make no sense to those not familiar with trading and investing. Don’t worry though, as FullyCrypto has your back.
Meet the complete glossary of technical analysis terms that you can use to help cut through the technical jargon and become a pro trader in no time – or simply understand what your mates are talking about.
Glossary of Technical Analysis Terms
A
Accumulation – The process of which an excess supply of tokens is bought up over a period of time and has a favorable effect on the price of the token.
Apex – The intersection of two trend lines on a chart. Usually indicates a new trend will arise when that intersection is reached.
Arbitrage – Simultaneously buying in one market – or through one exchange – and selling on another to take advantage of price differences.
B
Back and Fill – A pause in a current trend that is likely to resume in the same direction – often a short period of time.
Base – Generally known as the bottom of the market – same as Accumulation.
Bear Market – A long period of time – often a year or more – where the general trend of prices is downward.
Bear Trap – A false move to the downside that doesn’t initiate a new trend. It’s often the final reaction to a sustained period of market advances, and it traps the bears – hence the name.
Block – A single transaction containing a large number of tokens.
Breadth – The net number of tokens rising in value versus those declining. When advance exceeds decline the breadth is positive and when the decline exceeds the advances the breadth is negative.
Breakdown – When a token’s price or volume falls below previously record lows, resistance levels or support levels.
Breakout – When a token’s price or volume rises above previous record highs, resistance levels, or support levels.
Bull Market – A long period of time – often a year or more – where the general trend of prices is upwards.
Bull Trap – A false move on the upside that does not initiate a new trend. It’s usually the final rally before prices decline significantly, trapping bull traders.
C
Churning – Hesitation in a trend with high volume levels and little in terms of price progression or decline.
Climax – A sudden end to a trend. Often accompanied by high volatility and relatively high volume.
Concession – Commonly referred to as the spread, it’s the price difference between the buy and sell price on any given exchange.
Confirmation – When two or more trends or momentum measures extend their trends to new highs or lows at the same time.
Consolidation – A pause in the current trend that is likely to resume in the same direction, also known as Back and Fill.
Continuation Pattern – A consolidation phase that temporarily disrupts an up or downward trend and prepares the market for another move in the same direction over a short period of time.
Correction – A movement in the opposite direction of the current trend that does not break or reverse the trend.
D
Discount – The amount of which the price of a token has fallen below the theoretical value – generally highlights market pessimism.
Distribution – When the supply far outstrips the demand of a token, leading to neutral prices and high volatility.
Divergence – One measure extending its trend while a second fails to do so. This in turn leads to less confidence in the continuation of the trend.
Downtick – A transaction that occurs at a price lower than the previous transaction.
E
Extend – When a token has advanced or declined beyond its trend parameters, indicating that consolidation is about to happen.
F
Futures – An Exchange Traded Contracts (ETC) that gives the holder the obligation to buy or sell a certain amount of tokens at a specific date in the future. Futures are used to hedge against unfavorable market conditions.
L
Liquidation – A phase of distribution where prices fall relatively easily.
Liquidity – The ability of the market to absorb significant trade volume without too much impact on the price.
Long Term – A period exceeding six months.
M
Mark Up – A phase following Accumulation where prices rise relatively easily.
Medium Term – A period between five weeks and six months.
Momentum Indicators – Market indicators that take volume and price into consideration with the goal of determining overbought and oversold market conditions. Often used to determine strength and weaknesses of current market trends.
Moving Average – The average price of a token over a period of time used to smooth minor trends and fluctuation.
N
Near Term – A maximum time period of five weeks.
O
Oscillator – An indicator of the strength of the momentum activity, whether it’s positive or negative.
Overbought – The near term extending or exceeding trend parameters on the upside.
Oversold – The near term extending or exceeding trend parameters on the downside.
P
Point and Figure – A method of recording price activity without any reference to time. It’s concerned only with the price movements of a token.
Premium – The amount of which the price of a token has risen above the theoretical value – often highlights market optimism.
Price Potential – Technical appraisal of a token’s future value, could be near term, medium term, long term, or support/resistance level orientated.
Pullback – A movement that goes against a token’s trend that does not break or reverse the current trend. Usually corrects an overbought or oversold market condition.
R
Rebuilding – A period of sideways trading before a trend reversal.
Reflex Rally – A movement that goes against a token’s trend that does not break or reverse the current trend. Usually corrects an overbought or oversold market condition. Also known as a pullback.
Relative Strength Line – A line that represents a token’s price performance against the broader crypto markets.
Resistance – The level at which the selling is expected to exceed the demand and cause a reversal of an advance.
Reversal Pattern – A characteristic of a pattern that indicates the end of a trend.
S
Secular Trend – A trend that encompasses two or more cyclical trends, often lasting 10 years or more.
Sentiment Indicators – Indicators used to gauge the underlying psychology behind current investment decisions being made by the broader market. Most commonly related to news of adoption in the crypto world.
Shakeout – A sudden and sharp reaction that breaks the current trend line, but quickly reverses back to the original trend.
Short Covering – Purchasing a token that you previously shorted.
Short Selling – The process of selling a token that isn’t owned and is usually borrowed. This is done when negative market movement is anticipated.
Stabilization – A period of sideways market movement before a trend is reversed, also known as rebuilding.
Stop Point – The price level at which if exceeded will break a trend or negates a reversal pattern, usually just above or below a support or resistance level.
Support – A price level at which buying is expected to increase temporarily and stop a reversal or decline.
T
Testing – Consolidation with the expectation that a support or resistance level will hold.
Ticks – Net value of upticks subtracted from downticks.
Top – A period of distribution.
Trading Range – The upper and lower boundaries of a token’s price rage, implying sideways trading.
Trend Channel – Two parameters that contain virtually all trading in-between them.
Trendline – A line that connects two or more points and represents the slope of movement.
U
Uptick – A transaction that occurred at a higher price than the previous transaction.
V
Volatility – Degree of intraday fluctuation in a token’s value.
Volume – Total trading activity in a token over a specific time period.
W
Wedge – A pattern of rising tops and bottoms in an uptrend or declining tops and bottoms in a downtrend. Marginal progress is usually made in a wedge.
Z
Zero Downtick – A transaction that occurs at the exact same price as the previous transaction, but lower than the last different price.
Zero Uptick – A transaction that occurs at the exact same price as the previous transaction, but higher than the last different price.
Now you know the meaning of all the words technical traders use, you can perfect your game and become a top crypto trader. If you want to take your new knowledge a step further, get to grips with crypto slang and stay one step ahead of the game!
