Glossary
Trading Terms & Definitions
Position Types
Long Position
A bullish trading strategy where you buy an asset expecting its price to increase. You profit when the asset's value rises above your purchase price. Example: Buy Bitcoin at $50,000, sell at $55,000 for a $5,000 profit.
Short Position
A bearish trading strategy where you borrow and sell an asset expecting its price to decrease. You profit by buying back the asset at a lower price to repay the loan. Example: Short Bitcoin at $50,000, buy back at $45,000 for a $5,000 profit.
Order Types
Market Order
An order executed immediately at the current best available market price. Market orders prioritize speed over price precision, ensuring your trade happens instantly but without price guarantees.
Limit Order
An order that executes only at your specified price or better. For long positions, set the limit below current market price. For short positions, set the limit above current market price. Gives you price control but may not execute immediately.
Stop Market Order
An order that triggers a market order when the asset reaches your specified stop price. For long positions, set stop price above market (to limit losses). For short positions, set stop price below market. Acts as an automated exit strategy.
Advanced Trading Features
Leverage
The ability to control a larger position using borrowed capital, amplifying both potential profits and losses. For example, 10x leverage means a $1,000 deposit can control a $10,000 position. Use carefully - higher leverage increases both opportunity and risk.
Take Profit (TP)
An automated order that closes your position when it reaches your target profit level. This locks in gains without requiring you to constantly monitor the market. Set it and forget it profit protection.
Stop Loss (SL)
An automated order that closes your position when losses reach your predetermined limit. This crucial risk management tool prevents small losses from becoming catastrophic ones. Your safety net in volatile markets.
Position Management
Position Size
The dollar amount or quantity of an asset in your trade. Proper position sizing is crucial for risk management - never risk more than you can afford to lose on a single trade.
Position Interest
The daily fee charged for holding leveraged positions overnight. This cost accumulates over time, making long-term leveraged positions more expensive to maintain.
Entry Price
The exact price at which your position was opened. This becomes your baseline for calculating profits and losses throughout the trade's duration.
Liquidation Price
The critical price level where your position will be automatically closed to prevent further losses. When your losses approach your available margin, the platform liquidates to protect both you and the protocol from excessive risk.
Unrealized P&L (Profit & Loss)
Your current profit or loss on open positions that haven't been closed yet. This number fluctuates with market movements until you close the position, at which point it becomes realized P&L.
Market Mechanics
Keepers
Automated systems that monitor market prices and execute various order types (limit, stop, take profit, stop loss, liquidation) when their trigger conditions are met. They ensure the platform operates smoothly 24/7.
Slippage
The difference between your expected trade price and the actual execution price. High market volatility or large trade sizes can cause significant slippage, especially with market orders.
Funding Rate
A periodic payment between long and short position holders designed to keep perpetual contract prices aligned with spot prices. When funding is positive, longs pay shorts. When negative, shorts pay longs.
Rollover Fee
The cost of maintaining leveraged positions overnight, simulating the borrowing costs associated with synthetic leverage. This fee helps maintain the protocol's risk management framework.
Price Impact
The effect your trade has on the market price. Large trades can move the market against you, especially in less liquid markets. Smaller trades typically have minimal price impact.
Spread
The difference between the highest bid (buy) price and the lowest ask (sell) price in the market. Tighter spreads indicate better liquidity and lower trading costs.
💡 Quick Tips for Success
Start small while learning how leverage and different order types work
Always use stop losses to manage your risk exposure
Understand funding costs before holding positions long-term
Consider price impact when placing large orders
Monitor liquidation levels closely on leveraged positions
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