> For the complete documentation index, see [llms.txt](https://docs.bitfoot.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bitfoot.com/new-to-crypto/basic-trading-terms.md).

# Basic Trading Terms

### **Core Trading Concepts**

1. **Asset** – An item with value that can be traded, such as a cryptocurrency or token.
2. **Pair** – Two assets being traded against each other, like **BTC/ETH**. The first asset (BTC) is what you’re buying or selling, and the second (ETH) is what it’s being compared to in price.
3. **Market Order** – A trade to buy or sell immediately at the current market price.
4. **Limit Order** – A trade set to execute only at a specific price.
5. **Liquidity** – The ease of buying/selling an asset without impacting its price too much. High liquidity means more buyers and sellers.
6. **Spread** – The difference between the highest buying price (bid) and the lowest selling price (ask).
7. **Volatility** – How much an asset’s price changes over time; high volatility can mean larger price swings.
8. **Market Cap (Market Capitalization)** – The total value of an asset, calculated by multiplying its price by the total supply.

### **Decentralized Trading Terms**

1. **DEX (Decentralized Exchange)** – An exchange where you trade directly from your wallet using a peer-to-peer network, such as **Uniswap** or **Raydium**.
2. **Liquidity Pool (LP)** – A pool of tokens that enables trading on a DEX, funded by users who provide tokens in pairs (e.g., ETH and the token being traded).
3. **Deployer** – The creator of a token contract; they initially set the token’s rules.
4. **Renounced** – When a contract creator gives up control, meaning they can no longer alter the contract or its settings.

### **Safety and Scam-Related Terms**

1. **Rug** – A scam where the developer withdraws liquidity or abandons the project, often resulting in a token's value dropping to zero.
2. **Honeypot** – A token that can be bought but not sold, effectively trapping buyers.
3. **Liquidity Pulled** – When the deployer removes liquidity from a token’s trading pool, making it unsellable.
4. **Locked Liquidity** – Liquidity that has been “locked” to prevent the deployer from pulling it. Often done via a burn address or a third-party service.
5. **Verified** – A contract marked as readable and verified on platforms like Etherscan, allowing users to examine its code.
6. **Blacklisting** – The act of blocking certain wallets from selling a token, a red flag in token safety.

### **Fees, Slippage, and Trading Mechanics**

1. **Gas Fees** – The fees paid for processing transactions on blockchain networks (higher during peak times).
2. **Slippage** – The acceptable price variation allowed during a trade. High slippage can cause unexpected costs.
3. **Sandwich Bot** – A bot that manipulates high-slippage trades, buying before your transaction to raise the price, then selling immediately after, reducing your profit.

### **Token-Specific Details and Metrics**

1. **Primary Token** – The main token in a trading pair, paired against a commonly known token (e.g., ETH, USDC).
2. **Created** – The creation date of the token contract.
3. **Marketcap** – The current market capitalization of the pair, used to measure the token’s total value.
4. **Taxes** – Buy and sell fees for a token. Higher tax rates (over 20-30%) can impact profitability.
5. **Holders** – Accounts or wallets holding the token, which could be individual wallets or smart contracts.

### **Influencers, Insider Terms, and Common Practices**

1. **CT (Crypto Twitter)** – Refers to the influencers and hype-driven marketing on Twitter that can affect token popularity.
2. **Calls/Callers** – Individuals on platforms like Telegram who promote tokens, often for a fee or personal investment.
3. **Buy Contests** – Promotional events where the biggest buyers in a set time win prizes.
4. **Insider** – Someone with early information on a token launch, potentially benefiting from lower entry prices.
5. **Larp** – A token marketed as connected to a well-known figure or project without proof, often creating speculative hype.

### **Technical Terms and Tools**

1. **Smell Test** – A quick, informal evaluation of a token’s safety based on factors like verified contracts, locked liquidity, and the deployer’s history.
2. **Funding Sources** – Accounts sending ETH or other assets to the deployer wallet, sometimes indicating outside financial support.
3. **Max Wallet & Max Transaction** – Limits set on how many tokens can be held or traded at once; used to prevent concentration of supply.
4. **Contracts** – Additional contracts related to the token, including those deployed by the deployer or funding sources.