Friends who are new to the crypto world often get confused by all kinds of jargon. I’ve been there myself. Today I want to share my understanding in hopes of helping everyone avoid detours.

First, understand what fiat currency and tokens are. Fiat currency refers to government-issued money like RMB, USD, etc. Tokens, more accurately called "digital assets" or "tokens" in the crypto space, represent a proof of rights on the blockchain. The power of tokens lies in their ability to digitize both physical and virtual assets, which traditional finance cannot do.

After entering the crypto world, you'll often hear about airdrops and candies. An airdrop is when project teams distribute free tokens to holders regularly to promote the project, usually proportional to your holdings. Candies are similar—they are free digital currencies given out early in a project mainly to generate hype.

Before trading, you must understand some basic features. The virtual currency market operates 24/7, with no limit on price fluctuations, meaning prices can surge or plummet instantly. The minimum trading unit is very small; you can buy fractions like 0.0001 BTC. Most importantly, T+0 trading allows you to sell on the same day you buy, unlike stocks which require waiting until the next trading day.

In crypto trading, you need to understand the difference between market orders and limit orders. A market order executes immediately at the current price, offering quick confirmation but uncertain price. A limit order sets a specific price; it only executes when the market reaches that price, giving you more control but with the risk of not filling. Trading follows the principles of "price priority" and "time priority," meaning higher bids or lower asks are matched first.

Regarding wallets, simply put, they are your personal bank accounts. If you don’t want to keep your coins on an exchange, you can transfer them to your own wallet. Some wallets only support specific coins, while others like imToken support multiple coins, which is more convenient. Depositing and withdrawing mean transferring in and out, and the time required varies.

Understanding the concept of positions is essential. Those who buy contracts are called longs, expecting prices to rise; those who sell are called shorts, expecting prices to fall. Good news that boosts prices is called positive or bullish news; bad news that drags prices down is called negative or bearish news, such as exchange hacks or regulatory policies.

There are three main types of blockchain. Public chains like Bitcoin and Ethereum are open to everyone, with transparent and verifiable transactions. Private chains have restricted write permissions and are usually used for enterprise applications. Consortium chains are controlled by multiple organizations and are common in financial industry collaborations.

In the crypto space, you'll often hear various market terms. A rebound refers to a brief upward correction during a downtrend. A pullback is a temporary dip within an uptrend. Consolidation means the market is relatively stable with low volatility. "Arbitrage" involves exploiting price differences across exchanges, but watch out for transfer speeds.

Leverage trading means using small capital to control larger positions, amplifying both risks and rewards. I personally think beginners should avoid it.

Turnover rate reflects a coin’s liquidity; higher turnover indicates more active trading. Wash trading is when market makers manipulate prices by trading among themselves across multiple exchanges. "Shakeout" is when manipulators push prices down to scare out retail investors, then rally to profit. "Market support" involves big players buying to prevent further declines.

A bull market is characterized by widespread rising prices and optimistic outlooks. A bear market is the opposite—prices keep falling, and market sentiment is gloomy. A "monkey market" is highly volatile, with prices jumping unpredictably. The main upward wave in a bull market is called the "main rally," and catching it can lead to big profits.

A "descending decline" is a prolonged overall downtrend with occasional hope-inducing rebounds, which is very frustrating. A "waterfall" refers to a sharp, rapid decline with multiple large red candles in a short period. A "parabolic rise" is a long-term suppressed rally that suddenly explodes upward, often after negative news has been exhausted.

Common tactics used by market manipulators include "accumulation" and "price control." Accumulation involves shaking out retail investors to scare them away, allowing the manipulators to buy up chips. Price control means holding a large proportion of circulating coins to influence the market at will. "Cutting leeks" describes retail investors repeatedly entering and losing money. "Fake signals" involve manipulators creating false trends with candlestick patterns to mislead traders.

Trap setups like "诱多" (baiting longs) and "诱空" (baiting shorts) are common.诱多 involves pushing prices up to attract long buyers, then dumping to trap them. 诱空 involves pushing prices down to lure short sellers, then reversing to trap them.

Position management is especially important. Full position (全仓) means investing all funds into coins, which is very risky. Adding to a position (补仓) involves buying more when prices drop to lower your average cost. Increasing position (加仓) is buying more when confident about future gains. Reducing position (减仓) is selling part of holdings when risk awareness increases. Building a position (建仓) is the initial purchase to establish a position. Clearing all (清仓) means selling everything to wait and see. Light, half, and heavy positions reflect the proportion of funds invested. Holding only USDT without coins is called a "short position" (空仓).

Take profit (止盈) and stop loss (止损) are key risk controls. Take profit involves selling after gains to lock in profits; stop loss involves selling after losses to prevent further damage.

Sideways trading (横盘) means the market fluctuates within a range without clear direction. A rebound (反弹) occurs when prices rise after a decline, supported by technical or fundamental factors. Reversal (反转) is when a downtrend bottoms out and turns into an uptrend, with a much larger magnitude than a rebound.

"Cutting meat" (割肉) refers to selling at a loss out of fear of further declines. "Being trapped" (套牢) means holding a position after a price drop and being reluctant to sell. "Getting out of the trap" (解套) is when the price recovers to near the purchase level. Missing the opportunity (踏空) is the regret of buying when expecting a decline or watching from the sidelines during a rally. A roller coaster (过山车) describes extreme price swings that evoke strong emotional reactions.

HODLing (囤币) means holding a coin long-term, expecting significant future gains. Going long (做多) involves buying to profit from price increases. Going short (做空) involves selling or borrowing coins to profit from price declines, then buying back at lower prices.

Mining (挖矿) is the process of using computers to run algorithms to earn digital currencies, but note that equipment wears out faster. ICO (Initial Coin Offering) is a way for projects to raise funds by issuing their own tokens in exchange for market circulation. Private rounds (私募轮) are fundraising targeted at specific investors and cannot be publicly advertised. Angel rounds (天使轮) are investments by individual investors in early-stage startups.

These concepts may seem overwhelming at first, but with time and experience, you'll understand them naturally. The most important thing is to start with the basics, avoid rushing into leverage or full positions, and build steadily—patience and stability are the keys to long-term success.