#03 SMT01 For Trading In Crypto Space

Hello! Friends,

I hope you are learning the basic terms in crypto space gradually and don't forget to at least open two exchanges to benchmark coin/token prices before the transaction. Your standing in crypto space is as a result of your understanding. Let's continue the series. Welcome to #3 SMT01.

_{Pixabay: The Cryptocurrency}

Other Terms In Crypto Space Are:

• Market Maker

Most people in crypto space believe that market makers are someone who is rich enough to move the entire market with their purchase (trades) but is an entity who provides liquidity to exchange just by placing limit orders on its order book in order for trades to be made at a range of prices.
This is common to most exchanges because they provide rebates to makers for added liquidity.

• Moon

This is another crypto slang which means many things. When saying a certain cryptocurrency is going to the moon it simply means its price will soon skyrocket maybe in short-term due to some kind of announcement or let me say market sentiment and again it can be in long-term because of the real value of such cryptocurrency. I know you must have heard the word Moon Lambos, this is not Lamborghinis that one drive on the moon but the lavish cars that some intend to buy once their crypto holding goes to the moon meaning skyrocket.

Moreso, the word Moon in crypto space can also be used in relation to people who are undereducated about crypto space and they keep buying up coins with the mind of making a quick huge profit. Due to this exercise, you see some people posting when is it going to moon, its like a subtle mockery on crypto traders discussion forums.

• Slippage

This is the difference between the price at which a trader expects trade to execute and the price at which it actually executes. In reality, there are countless of reasons why slippage would occur...

1. When a trader raise/place a market order when the market is volatile_{Read volatility}
2. When a trader places a trade large enough to move the market...

If you consider these two factors as an example, it is possible the top of the order book price of bitcoin is $4,368 USD and you wanted to buy 160BTC. In crypto space, there won't be enough volume near the top of the order book to actually let you buy that much BTC at $4,368 USD per coin except you go deep into the order book to fill your order which will result to high price like $4,400. Again, the moment your large order is telegraph to other traders and bots on the exchange, it is possible they recognize the buying pressure and thereby drive up the price of BTC even above what you are trying to buy it. These are some of the factors that cause slippage in crypto space.

• Resistance

This is a technical analysis which is the price level at which the pressure of selling an asset is historically greater than the pressure of buying. This means that the asset in one way encounters resistance from the market the moment it attempts to break through that price level.

If you want to consider day trading basic tactics, it is what we refer to shorting of an asset especially when the asset is nearing a resistance level and as a trader, you expect it won't break through the resistance level. The moment it's breakthrough, the level is automatically turned to a support level.

To be continued......

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