Actually, many friends who just entered the crypto space get overwhelmed by all kinds of jargon, what is the crypto market, how to play, what are the rules. Today, I will clarify these basic concepts for everyone, which should solve many doubts.

First, let's talk about the most basic. Fiat currency is government-issued currency, like RMB, US dollars, backed solely by government credit. Token (digital token) is different; it is a proof of rights on the blockchain, not currency. The coolest thing about tokens is that they can digitize physical and virtual assets, which is impossible in traditional finance.

Next are some common financing and marketing concepts. Airdrops are tokens distributed for free by project teams to promote themselves, usually proportional to your existing token holdings. Candy is similar, referring to free digital currency given out during ICO periods to boost hype. Breakout refers to the token price falling below the issuance price. Private placement is a way for projects to raise funds from specific investors, as opposed to public offerings aimed at the general public.

Regarding trading, crypto trading is much more flexible than stocks. Virtual currencies are traded 24/7 all year round, with no limit on price fluctuations— for example, on May 28, 2021, Bitcoin's single-day increase exceeded 20%, something stocks can't do. The minimum trading unit can be as small as 0.0001 BTC, much more flexible than stocks' standard lot of 100 shares. It’s also T+0 trading, meaning you can buy and sell on the same day, unlike stocks which are T+1. Withdrawals and cashing out are also unrestricted in time, with high liquidity.

About trading platforms, the mainstream ones are large exchanges, and you can choose based on your needs. If you don’t want to keep your coins on the platform, you can transfer them to a personal wallet, similar to a bank card. Wallets can be single-currency or multi-currency; for example, imToken supports multiple coins. Recharging and withdrawing are just transferring coins in and out, with varying times.

Moving into trading positions, "position" is an important concept. Buying a contract is called a long (hoping for a rise), selling a contract is called a short (hoping for a fall). Good news (positive) is information that stimulates price increases; bad news (negative) does the opposite, such as exchange hacks or government regulation.

Regarding blockchain types, public chains are open to anyone, like Bitcoin and Ethereum. Private chains restrict write permissions to specific organizations but can open read access. Consortium chains are controlled by multiple organizations, requiring most or all to confirm transactions before writing, common in interbank or enterprise collaborations.

Market trends have their own terminology. Rebound is a short-term rise during a downtrend; correction is a brief dip during an uptrend; consolidation means the price is relatively stable with small fluctuations. Arbitrage involves exploiting price differences across platforms—buy low on A, sell high on B. Leverage trading uses small capital to make large trades, greatly increasing risk, somewhat like gambling.

Market orders are executed immediately at the current market price, fast but with uncertain prices. Limit orders set a specific price; they may not execute but guarantee the price. Orders follow the principle of "price priority, time priority"—higher buy prices and lower sell prices are prioritized; among the same prices, the earlier order gets filled first.

Market manipulators have several common tactics. Wash trading involves opening accounts on multiple platforms simultaneously to create fake trading volume and manipulate prices. Fake pumps are done by raising the price then dumping, often with large sell orders to scare retail investors into selling, making it easier to push prices up. Price support (or "stabilization") involves big players buying large amounts to prevent a decline. Accumulation is scaring retail investors out through wash trading, then the manipulators take over the cheap chips to increase control. Market control means the big players hold a large proportion of the coins, so they can influence the market at will.

Market types also have their own characteristics. Bull market is a general upward trend with optimistic outlook. Bear market is a prolonged decline; the key is survival—holding coins or bottom-fishing are options. Monkey market refers to highly volatile, unpredictable swings—mainstream coins may rise one day and fall the next, testing your patience. The main upward wave is the longest continuous rise; catching it can lead to big profits. A decline with some hope is painful—prices go up two days, down one, repeatedly. A waterfall is a sharp, rapid decline, like a series of big red candles in a short time. A moonshot is a long-term breakout after a prolonged bear market, often after all negative news has been exhausted.

Fake signals are created by manipulators using candlestick patterns to induce retail buying or selling. Inducing longs involves creating a false upward trend to attract buyers then dumping; inducing shorts is the opposite—faking a downtrend to lure sellers then rallying.

Turnover rate is an indicator of a coin’s liquidity, measuring how frequently it’s bought and sold within a certain period. Market orders have the highest priority, limit orders are also called entrusted orders or pending orders.

Position management is also crucial. Full position means all your funds are invested in coins, which is very risky. Averaging down involves buying more after a loss to lower the average cost. Increasing position means buying more if optimistic. Opening a position (initial buy) is the first purchase; reducing position is selling part of holdings if risk is perceived. Locking position (for futures with leverage) involves opening both long and short positions simultaneously; a flat position means only holding USDT, no other coins, and waiting. Light, heavy, and half positions refer to the proportion of funds allocated to coins. Clearing position means selling everything and preparing for a flat stance.

Take profit is selling to lock in gains; stop loss is selling after a certain loss to prevent further damage. Sideways market means little price movement within a range. Rebound during a downtrend is a technical or capital-driven recovery. Reversal is a bottoming out and shifting from downtrend to uptrend, often a V-shaped reversal, with a much larger change than a rebound.

Cutting losses (liquidation) means selling even at a loss to avoid further decline. Being trapped refers to holding a coin that has fallen but not selling. Break-even means the coin you bought has recovered in price. Missing the boat is buying during a bad market but hesitating when the market turns up—missing the opportunity. Roller coaster describes rapid rises and falls, just for excitement. Holding coins is believing in their future, buying in large quantities for potential ten, hundred, or thousand-fold gains.

Going long (bullish) means buying because you believe the price will rise; going short (bearish) means selling or borrowing coins expecting a decline. Mining involves using computers or phones to run calculations to earn digital currency, but it accelerates device wear.

ICO (Initial Coin Offering) originates from IPOs; project teams issue their own virtual currency in exchange for circulating virtual currency to raise funds. Private rounds are fundraising targeted at specific groups and cannot be publicly advertised. Angel rounds are early investments by individual investors supporting startups, high risk but high return.

Over-the-counter (OTC) trading is what many platforms call fiat-to-crypto trading, with platforms acting as guarantors, directly buying or selling mainstream coins or USDT with RMB, similar to shopping platforms.

Positive news (利多) refers to favorable information, mainly driven by news. Negative news (利空) is unfavorable, also news-driven, and can impact the market negatively. There’s a saying: "When the negative news is exhausted, it becomes positive," meaning after extreme pessimism, a reversal may occur.

In summary, the crypto market is a place full of opportunities and risks. Understanding these concepts thoroughly will help you better interpret market movements and manage risks. For beginners, the most important thing is to survive first—don’t rush to go all-in; gradually accumulating experience is more important than anything.