Crypto Scalping Glossary
Plain-language definitions of the terms you will meet across BestScalping. Use Ctrl/Cmd+F to jump to any term. Entries link to full articles where available.
Trading Styles
Scalping
A trading approach that targets many small price moves, each lasting seconds to a few minutes. The goal is not one large win but consistent small ones, with strict loss control. The high frequency of decisions demands discipline and fast execution. → What is scalping
Day trading
Opening and closing all positions within the same trading day, targeting 0.5%–3% moves. Fewer decisions than scalping but still requires active monitoring. Positions do not survive overnight.
Swing trading
Holding positions for days or weeks to capture larger directional moves (3%–10%+). Requires patience and the ability to tolerate significant intraday fluctuations. Much lower time commitment per day than scalping. → Scalping vs day trading vs swing
Timeframe
The period each candle on a chart represents: 1 minute, 5 minutes, 1 hour and so on. Scalpers mostly use 1-minute, 3-minute and 5-minute charts for entries, with higher timeframes (15m, 1h) for context. → Best timeframes for scalping
Order Types & Execution
Market order
An instruction to buy or sell immediately at the best available price. It always fills, at whatever price the book offers, so it is expensive in fast or thin markets. Pays the taker fee. → Order types explained
Limit order
An instruction to buy or sell at a specified price or better. Rests in the order book until matched. Cheaper than a market order (the maker fee, lower and at the top tiers negative). It does not fill if price never reaches the level. → Order types explained
Stop-loss
An order that triggers an exit when price reaches a specified adverse level. It defines the maximum loss if the trade is wrong, and every trade has one. A stop-market always fills; a stop-limit controls the price but may not fill. → Risk and sizing
Stop-limit order
A two-stage order: a stop triggers the order, which then becomes a limit order at a specified price. Offers price control but risks non-fill if price gaps through the limit level. Generally not recommended for stop-losses in fast markets.
Take-profit
A limit order placed at a target price above (for longs) or below (for shorts) the entry. Automatically closes the position when reached. Ensures the planned gain is captured without requiring manual action.
Maker
A participant who places a resting limit order that adds liquidity to the order book. Makers pay lower fees, 0.02% or less at the entry tier on the large venues, because they improve market quality; at the top volume tiers several venues pay makers a rebate.
Taker
A participant who places an order that immediately matches against a resting order, removing liquidity. Takers pay the higher fee, 0.035% to 0.055% at the entry tier on the large venues. Market orders are always taker; a limit order that crosses the spread is taker too. → Order types explained
Post-only
A limit order flag that cancels the order if it would execute as a taker, that is, if it would cross the spread on arrival. The order therefore only ever pays the maker fee.
Reduce-only
A futures order flag that only reduces or closes an existing position and cannot open a new one. Set on every stop-loss and take-profit in futures so that a stale order cannot open a position by accident.
Slippage
The difference between the expected execution price and the actual price received. Occurs when the order book is thin or the position size is large relative to available liquidity. More pronounced with market orders.
Spread
The difference between the best bid (highest buyer price) and the best ask (lowest seller price). Narrower spreads indicate higher liquidity and lower implicit transaction cost. On liquid BTC perps, the spread is often less than 1 basis point.
Market Structure & Price Action
Bid
The highest price a buyer is currently willing to pay. Resting bids are visible in the order book below the last traded price. A market sell order executes against the best bid.
Ask (Offer)
The lowest price a seller is currently willing to accept. Resting asks are visible above the last traded price. A market buy order executes against the best ask.
Support
A price level where buying interest has historically been strong enough to stop or reverse a downward move. Identified by previous lows, round numbers, or high-volume price zones. → Candlestick context
Resistance
A price level where selling interest has historically been strong enough to stop or reverse an upward move. Previous highs, round numbers, and VWAP are common resistance levels.
Liquidity sweep
A fast move through an obvious support or resistance level that triggers the stop orders and liquidations clustered just beyond it, then reverses once that forced buying or selling is exhausted. Also called a stop hunt or stop run. It needs no manipulator: stops are market orders in waiting and the book beyond a level is thin. → Stop hunts and liquidity sweeps
Stop hunt
See liquidity sweep. The trade built on it, the reclaim after the sweep, is the stop-hunt reversal. → Stop-hunt reversal
Absorption
Heavy aggressive volume hitting a level while price makes little or no progress: passive orders at the level are taking everything the aggressors send. A sign that the level is being defended, read from the tape rather than the book. → Order flow and DOM
Delta (order flow)
Aggressive buy volume minus aggressive sell volume over a bar or a window: trades at the ask minus trades at the bid. Delta gives the direction of aggression that volume alone does not. Its running total is the CVD. → Order flow and DOM
Iceberg order
A limit order that shows only a slice of its size and refills that slice from a hidden remainder each time it trades. Visible on the tape as repeated fills at one price against a book that never depletes. → Order flow and DOM
Spoofing
Placing a large resting order with no intention of letting it trade, to make other traders hesitate or hurry, and cancelling it as price approaches. Illegal on regulated futures exchanges, common on crypto venues. The defence: size that has not traded is not information. → Order flow and DOM
Range
A price corridor where neither buyers nor sellers are in control. Price oscillates between a defined high (resistance) and a defined low (support), and the range pulls price back towards its middle, which is why most breakout attempts from it fail. → Range fade
Breakout
A close decisively beyond a defined support or resistance level, potentially the start of a directional move. Confirmed by follow-through (a second close beyond the level), volume well above average and a full-bodied candle; most pierces of a level are sweeps, not breakouts. → Range breakout
Measured move
A first target for a breakout: the height of the range that preceded it, projected from the breakout level. A calibration of how far the stored energy of a consolidation tends to carry, not a prediction. → Range breakout
Trend pullback
A temporary counter-trend move within a directional trend. Pullbacks to a rising or falling moving average are the entry the trend-scalping strategy uses, with the stop below the pullback low. → Trend scalping
Tick chart
A chart whose bars close after a fixed number of trades rather than a fixed number of seconds, so it slows down in quiet markets and speeds up in fast ones. Used to time entries inside a candle; never used to place the stop. → Tick chart scalping
Order flow
The stream of executed trades: who is buying aggressively and who is selling. Distinct from the order book, which shows pending orders that may never trade. The tape records what happened; the book records intentions. → Order flow and DOM
CVD (Cumulative Volume Delta)
The running total of aggressive buyer volume minus aggressive seller volume since a reference point. CVD rising with rising price is a trend with participation; CVD diverging from price is momentum weakening. → Order flow and DOM
Derivatives & Perpetuals
Futures contract
A derivative agreement to buy or sell an asset at a specified price on or before a specified date. Crypto futures allow traders to go long (profit from rising prices) or short (profit from falling prices) with leverage.
Perpetual futures (perp)
A futures contract with no expiry date. Keeps its price close to spot through the funding rate mechanism. The most popular instrument for crypto scalpers due to continuous liquidity and easy shorting. → Perpetual futures
Dated futures
A futures contract with a fixed expiry date (weekly, quarterly). Converges to spot price at expiry. Used more often by institutional traders and options hedgers than by scalpers.
Funding rate
A periodic payment exchanged between long and short holders of a perpetual futures position. Positive funding = longs pay shorts (market is bullish-crowded). Negative = shorts pay longs. Resets every 8 hours on most exchanges. A key sentiment indicator. → Funding rates explained
Open interest
The total number of active, unsettled futures contracts. Rising OI + rising price = new buying conviction. Rising OI + falling price = new short conviction. Falling OI = positions closing. → Open interest explained
Long
A position that profits from rising prices. When you "go long," you buy the instrument expecting it to increase in value.
Short
A position that profits from falling prices. You sell an instrument you do not own (borrowing it via the exchange's margin system), expecting to buy it back cheaper later.
Liquidation
The forced closure of a leveraged position when its losses have consumed the allocated margin. Executed by the exchange automatically at market price. Large clusters of liquidations at the same level create cascades. → Liquidation cascades
Liquidation cascade
A chain reaction where forced closures drive price further, triggering additional liquidations in the same direction. Creates sharp, sudden moves that often reverse once the cascade exhausts itself. → Liquidation cascades
Mark price
The price used by exchanges to calculate unrealised P&L and trigger liquidations. Derived from several exchanges' price feeds rather than the venue's last trade, so that a thin-market print cannot trigger liquidations.
Index price
The reference spot price calculated from multiple exchanges, used as the basis for mark price and funding rate calculations. Ensures perpetuals stay anchored to the real underlying asset price.
Leverage
The multiplier that allows controlling a position larger than the deposited margin. 10× leverage = $1,000 deposit controls a $10,000 position. Amplifies both gains and losses equally. → Leverage explained
Margin
The capital deposited as collateral to open and maintain a leveraged position. Two types: initial margin (required to open) and maintenance margin (minimum to keep the position open without liquidation).
Initial margin
The minimum amount required to open a leveraged position. Expressed as a percentage of position size (inverse of maximum leverage). At 10× leverage, initial margin = 10% of position size.
Maintenance margin
The minimum margin level required to keep a position open. If losses reduce the margin below this level, liquidation is triggered. Always set wider stop-losses than the maintenance margin level.
Isolated margin
A margin mode where only the specific amount allocated to a trade is at risk. A position can be liquidated without affecting the rest of the account. Recommended for scalping.
Cross margin
A margin mode where the entire account balance backs all open positions. Provides more buffer against liquidation but risks the whole account if one position goes badly wrong.
Basis
The price difference between a futures contract and the underlying spot price. Positive basis: futures above spot (contango). Negative basis: futures below spot (backwardation).
Portfolio margin
A margin mode that computes the requirement across the whole account net of hedges rather than position by position. A large capital-efficiency gain for multi-leg options books and irrelevant for a single directional trade. Available to eligible accounts on Deribit and inside Bybit's Unified Trading Account.
Options
Call option
The right (not obligation) to buy an asset at a specified price (the strike) before or at a specified date (expiry). A call gains value when the underlying rises. Buyers pay a premium; maximum loss is the premium paid. → Options basics
Put option
The right (not obligation) to sell an asset at the strike price before expiry. A put gains value when the underlying falls. Used to hedge long positions or to express a bearish view. → Options basics
Premium
The price paid to buy an option: intrinsic value (how far in the money it is) plus extrinsic value (what the market pays for the remaining time and volatility).
Covered call
Holding the underlying and selling a call against it. Collects premium in exchange for capping the upside above the strike while keeping almost all of the downside; economically equivalent to a short put at the same strike. → Selling options for income
Cash-secured put
Selling a put while holding enough cash (or collateral) to buy the underlying at the strike if assigned. Pays premium for the obligation to buy in a falling market; the loss is the full drop below the strike minus the premium. → Selling options for income
Strike price
The fixed price at which an option contract can be exercised. A call with a strike of $85,000 gives the holder the right to buy BTC at $85,000 regardless of market price.
Expiry
The date and time after which an option contract becomes worthless if unexercised. On Deribit, BTC and ETH options expire daily, weekly, monthly and quarterly, at 08:00 UTC. Time decay (theta) accelerates as expiry approaches.
Implied volatility (IV)
The market's forward-looking expectation of volatility embedded in option prices. High IV = options are expensive (market expects large moves). Low IV = options are cheap (market expects calm). → Implied volatility and skew
IV crush
The rapid fall in implied volatility once a scheduled event (FOMC, CPI, an ETF ruling, a protocol upgrade) is over. Options bought just before the event lose their uncertainty premium within hours, so a buyer can be right on direction and still lose. → IV crush
Volatility risk premium
The tendency of implied volatility to exceed the volatility that is subsequently realised. It is the margin option sellers earn for acting as insurers: positive on average, paid back in crashes. → Selling options for income
Delta (Δ)
How much an option's price changes for a $1 move in the underlying. A call with delta 0.5 gains $0.50 when BTC rises $1. Also a rough probability that the option expires in-the-money. → The Greeks explained
Gamma (Γ)
How fast delta changes as the underlying moves. Highest for at-the-money options near expiry. High gamma means delta changes rapidly, which matters because dealers must adjust their delta hedges often, and that adjustment is flow in the perpetual market. → The Greeks explained
Theta
Time decay: how much an option loses in value each day with everything else unchanged. Negative for buyers and positive for sellers. For an at-the-money option it accelerates into the last week; an out-of-the-money option loses most of its value earlier and then has little left to lose. → The Greeks explained
Vega (ν)
How much an option's price changes when implied volatility moves by 1 percentage point. Option buyers are long vega (they benefit from IV rising); sellers are short vega. → The Greeks explained
GEX (Gamma Exposure)
The aggregate gamma exposure of options dealers across all open contracts. Positive GEX: dealers buy dips and sell rallies, which dampens volatility. Negative GEX: they buy rallies and sell dips, which amplifies it. In crypto the sign is inferred, not observed. → Gamma exposure explained
Gamma wall / gamma flip
A gamma wall is a strike with heavy open interest near spot where dealer hedging flow intensifies, often stalling price into expiry. The gamma flip is the price level at which net dealer gamma changes sign and the regime switches from dampening to amplifying. → Gamma exposure explained
Max pain
The settlement price at which the options open for an expiry would pay out the least in total, so that the most contracts expire worthless. In the last day before a large expiry, dealer hedging can pull price towards it when dealers are long gamma, and away from it when they are short. → Max pain
Vol skew
The difference in implied volatility across different strike prices for the same expiry. In Bitcoin, out-of-the-money puts usually carry a higher IV than calls the same distance from spot, reflecting demand for downside protection and the shape of past crashes. The 25-delta risk reversal is the standard measure. → IV and skew
Intrinsic value
What an option would be worth if exercised now: for a call, the price minus the strike when positive; for a put, the strike minus the price. An option at expiry is worth its intrinsic value and nothing else. → Options basics
Extrinsic value
The part of an option's price above its intrinsic value: the market's payment for the chance that the option finishes further in the money before expiry. Largest at the money, larger with more time and higher implied volatility, and zero at expiry. Also called time value. → Options basics
Moneyness
Where the strike sits relative to the current price. In the money (ITM): the option already has intrinsic value. At the money (ATM): strike at the current price, with the most extrinsic value and a delta near 0.5. Out of the money (OTM): no intrinsic value, cheap, and a low probability of paying. → Options basics
Realised volatility
The volatility the price has in fact produced over a period, measured as the annualised standard deviation of returns. Compared against implied volatility: options are cheap when the market goes on to realise more than was implied and expensive when it realises less. → Volatility trading
DVOL
Deribit's implied-volatility index for Bitcoin and Ether, a 30-day, strike-weighted reading of the options chain built the way the VIX is built. Divided by 19.1 it gives the daily one-standard-deviation move the market is pricing. → VIX vs DVOL
Expected move
The size of move the options market is charging for over a horizon, read from implied volatility: IV × √(days ÷ 365), or the price of the at-the-money straddle, which is the market's estimate of the average absolute move to expiry. → IV crush
Risk reversal
The standard measure of skew: the implied volatility of the 25-delta call minus that of the 25-delta put for one expiry. Negative in Bitcoin most of the time, because puts are bid; a positive reading is rare and marks aggressive call buying. → IV and skew
Term structure
Implied volatility across expiries for the same underlying. Normally rising with time; inverted, with the front expiry above the back, when a scheduled event or a crisis makes the next days more uncertain than the months after them. → IV and skew
Straddle
A call and a put at the same strike and expiry. Bought, it pays when price moves further than the combined premium in either direction; sold, it collects the premium and loses without limit outside the break-evens. Its price is the market's expected move. → Straddle vs strangle
Strangle
A straddle with the strikes moved apart: an out-of-the-money put below the market and an out-of-the-money call above it. Cheaper than the straddle, with a band between the strikes in which the whole premium is lost. → Straddle vs strangle
Delta hedging
Holding the underlying against an option in the ratio of the option's delta so that the combined position has no directional exposure, and adjusting as delta changes. A delta-hedged long option earns from movement (gamma) and pays theta; the hedged short is the mirror. The trade that dealers run on every option they hold. → Volatility trading
Put-call parity
The identity linking a call and a put with the same strike and expiry: call minus put equals the underlying minus the strike, ignoring interest. It is why any put can be rebuilt from a call plus a short position in the underlying, and why a synthetic straddle is two calls plus a short of one unit. → Straddle vs strangle
Protective put
A put bought against a holding of the underlying, setting a floor under the position below the strike for the cost of the premium. Insurance for a window; rolled continuously at crypto volatility it costs a large fraction of the holding per year. → Hedging with options
Collar
A protective put financed by selling a call above the market against the same holding. Cheaper than the put alone, at the price of capping the upside at the sold strike. The standard institutional structure for continuous protection. → Hedging with options
Vertical spread
Two options of the same type and expiry at different strikes, one bought and one sold. Keeps a directional view with a defined maximum loss and a defined maximum gain, and removes most of the position's theta and vega. → Options spreads
Calendar spread
Two options at the same strike with different expiries, the nearer one sold and the further one bought. Earns from the faster decay of the front expiry while price stays near the strike, and from front-month implied volatility falling relative to the back. → Options spreads
Butterfly
Three strikes: one option bought at each wing and two sold at the centre. A small debit for a large payoff if price settles at the centre strike, and the debit lost anywhere beyond the wings. → Options spreads
European option
An option that can be exercised only at expiry, as opposed to an American option, exercisable at any time. Deribit's crypto options are European and cash-settled: at expiry the difference between the settlement price and the strike is paid in the settlement currency, and no coins change hands. A European option can still be sold back to the market at any time. → Deribit guide
Technical Indicators
EMA (Exponential Moving Average)
A moving average that gives more weight to recent prices, making it more responsive than a simple moving average. Scalpers typically use the 9 and 21 EMA on short timeframes for trend and pullback entries. → EMA strategies
SMA (Simple Moving Average)
A moving average that weights all periods equally. Slower than EMA, less responsive to recent price changes. The 20-period SMA is the middle band of Bollinger Bands.
VWAP (Volume Weighted Average Price)
The average price at which an asset has traded during the session, weighted by volume at each price. Resets daily. Price above VWAP = buyers in control. Price below = sellers. A key intraday reference for scalpers. → VWAP for scalping
RSI (Relative Strength Index)
A momentum oscillator (0–100) measuring the speed of recent price gains vs losses. Above 70 = overbought. Below 30 = oversold. Most useful when showing divergence with price. → RSI divergence
RSI divergence
When price makes a new extreme (higher high or lower low) but RSI does not. Signals weakening momentum and potential reversal. Most reliable at key support/resistance levels with candlestick confirmation. → RSI divergence
Bollinger Bands
Three bands: a 20-period SMA (middle) plus/minus 2 standard deviations (upper and lower). When the bands narrow sharply (the "squeeze"), volatility has compressed, and a larger move usually follows, in a direction the squeeze does not predict. → Bollinger Bands
Bollinger Squeeze
The condition when Bollinger Bands narrow to an extreme, indicating compressed volatility. Reliably precedes a large directional breakout. Trade the breakout direction, not the prediction. → Bollinger Bands
ATR (Average True Range)
Measures average price volatility over a period. Used to set stop-losses proportional to current market conditions ("stop at 1× ATR") and to gauge whether a move is large relative to normal fluctuation. → ATR indicator
Volatility clustering
The tendency of large moves to follow large moves and quiet sessions to follow quiet ones, so that today's range is the best single forecast of tomorrow's. The reason ATR stops and position sizes are re-read every session rather than fixed. → Crypto market volatility
Square-root-of-time rule
Volatility scales with the square root of the horizon: an annual figure divided by 19.1 gives the daily one-standard-deviation move, divided by 7.2 the weekly. Used to convert an implied or realised volatility into the size of move to expect over a trade's holding period. → Crypto market volatility
Volume profile
A chart overlay showing how much volume traded at each price level over a specified period. High-volume nodes act as support/resistance. Low-volume zones are where price tends to move quickly. → Volume profile
OBI (Order Book Imbalance)
The ratio of bid-side volume to ask-side volume within a defined depth range. High OBI = bids dominate = mild short-term bullish lean. Meaningful only in combination with trade flow and price reaction.
Risk Management
Risk/Reward ratio (R/R)
The ratio between the maximum planned loss (stop-loss distance) and the planned gain (take-profit distance). A 1:2 R/R means risking $1 to potentially make $2. R/R and win rate together determine whether a strategy is profitable. → Win rate vs R/R
Win rate
The percentage of trades that close profitably. A high win rate does not by itself make a strategy profitable; it has to be read with the R/R. A 40% win rate is profitable at 1:2 R/R. → Win rate vs R/R
Expectancy
The average amount gained or lost per trade over many trades. Expectancy = (Win rate × Avg win) − (Loss rate × Avg loss). Must be positive (after fees) for a strategy to be viable long-term. → Win rate vs R/R
Drawdown
The decline from a peak account value to the lowest subsequent point before a new high is reached. Maximum drawdown measures the worst peak-to-trough loss in a period. A key measure of strategy risk.
Position sizing
Calculating how many contracts or units to trade so that a losing trade risks only a defined percentage of the account. The formula: Position size = Risk amount / Stop distance. → Risk and sizing
R (risk unit)
The amount risked on one trade, the distance from entry to stop multiplied by the position size, used as the unit for every result: a trade that makes twice its risk is +2R. On the $10,000 house account, 1R = $100. Measuring in R makes trades of different sizes and instruments comparable. → Risk and sizing
Risk of ruin
The probability that a sequence of losses takes the account below the point from which it cannot recover under its own rules. It rises steeply with the fraction of the account risked per trade and with the length of losing streaks that the win rate makes normal. → Risk of ruin
Fee test
A check run before a setup is traded: the round-trip fees on the position divided by the stop distance in dollars, expressed in R. A trade that pays 0.5R in fees needs a far better win rate than the same trade at 0.2R, and the difference is usually maker versus taker fills. → Trade execution
Trailing stop
A stop that moves in the direction of a profitable trade, behind the last swing low (for a long) or a multiple of ATR, and never moves backwards. Its distance sets the trade-off between keeping more of a sharp reversal and surviving a pause. → Trade exit strategy
Time stop
An exit rule that closes a trade flat after a set number of candles without the expected progress. Costs nothing on trades that work and saves fees and attention on the ones going nowhere. → Trade exit strategy
Playbook
A written set of trade cards, one per setup, each with checkable conditions, a trigger, entry, stop, targets, exit rules, filters and a running record of results in R. The document that turns setups into a system. → How to build a scalping playbook
Portfolio heat
The total risk exposure across all simultaneously open positions. Keeping total heat below 4–6% of account prevents a correlated move from causing catastrophic loss. → Risk and sizing
Revenge trading
Entering trades to "get back" losses after a losing session. Driven by emotion rather than edge. Almost universally makes drawdowns worse. The fix: stop trading for the day after 3 consecutive losses. → Common mistakes
Venues & Infrastructure
CEX (Centralised Exchange)
A trading platform operated by a company that holds user funds in custody. Fast, liquid, and regulated in most jurisdictions. Major crypto CEX venues: Binance, Bybit, OKX, Deribit.
DEX (Decentralised Exchange)
A trading protocol that runs on blockchain smart contracts without a central operator. Users retain custody of funds. Liquidity has grown, with Hyperliquid the leading venue for perpetuals, but a DEX is usually slower and more complex to use than a CEX.
B-book
A broker model in which the firm takes the other side of its customers' trades instead of matching them in a shared order book, so that the customer's loss is the firm's revenue. Recognisable by a quoted spread with no public book or tape and no maker fee. Not a venue for scalping. → Choosing a crypto exchange
Unified Trading Account (UTA)
Bybit's account structure in which spot, USDT and USDC perpetuals and options share one margin balance, so that one deposit funds every product and unrealised profit on one position offsets margin on another. → Bybit futures guide
Order book
The live, ranked list of all pending buy (bid) and sell (ask) orders on an exchange. Visible depth shows where supply and demand are concentrated. The primary microstructure tool for scalpers. → Order book and DOM
DOM (Depth of Market)
A condensed view of the order book showing the best 10–20 price levels on each side with their cumulative volume. Gives a real-time snapshot of supply/demand at current price. → Order book and DOM
Maker/taker fee structure
The fee model where orders that add liquidity (makers, resting limit orders) pay less, or receive a rebate, while orders that remove liquidity (takers, market orders) pay more. For a scalper the difference between the two is often the difference between a positive and a negative expectancy.
Latency
The time delay between sending an order and it being processed by the exchange. In scalping, low latency matters, and a retail trader on a major exchange with an ordinary connection can still execute competitively without co-location.
WebSocket
A persistent connection protocol used for real-time market data feeds. Orders, trades and order book updates are delivered over WebSocket streams on all major crypto exchanges, and any programmatic scalping runs on them.
Glossary is continuously expanded. If a term is missing, check the relevant full article or use the search bar above.
This content is educational only. Not financial advice. See disclaimer.