Today in the crypto world there are more than 400+ crypto users and 200+ crypto exchanges are there. Many people are interests in cryptocurrencies for trading. Even though they do not have enough knowledge about order types crypto.
It is the order books that reflect market stakes and accurately show what kind of trading is happening in the crypto world. Therefore, before investing in cryptocurrencies, it is very important to know about order books.
You can trade like Master by understanding the main and various types of order books on the cryptocurrency exchange platform. Let me list those order types of Crypto in this blog more elaborately…
Various Order Types Crypto
In Market order, trades are to be places at the best rate based on the asset pair. It is the most basic sort of trading type where you cannot choose the price but must buy or sell the trade. It all depends on the specific coin’s current trade value relative to the asset pair that is currently available on the order books.
A trader must indicate the quantity of that particular cryptocurrency that they wish to buy or sell. The optimum price for crypto at any given time is fixing by the crypto market. Until the exact required order is executed, the order can trade continuously.
For example: if you want to buy or sell 1 bitcoin at the BTC/USG trading pair, then the trading algorithm will keep doing the trade until 1 bitcoin is traded or sold for the best available rate. It is important to note that the market order does not diversify the trade to buy or sell separately at your discretion.
Limit Order is an order book’s concept or idea that allows users to buy bitcoins at a specific price. It is the process by which a certain trade is purchasing at a limited price or a price lower and sold at a limited price or a higher.
For example: if the market fluctuates between $1200 and $1205 and you are planning to purchase 1 ETH, then you could do the transaction for $1203 or $1204.
Same as, when you sell, the limit is set at the price you bought and sold above the fixed limit. That means you can sell ETH for $1205 based on market fluctuations. Simply this is a limit order.
Stop order is what assists you in determining the price of the specific trade in which you want to sell or buy. You have the option to select the trading limits with a stop order. Consequently, you can sell the deal in accordance with the defined stop price level and buy it again when it reaches the specified stop price level.
For example: You have bought a coin with the expectation that it will increase its value and when it does, you decide at what point you want to stop and sell the coin. Similar to this, if the price of the coin decreases and you know for sure that it is not going up, then you can close your position at a specific level to limit your loss.
Stop-Limit Order incorporates both a stop order and a limit order. The stop price and the limit price are fixes in order for the trade to perform at the limit price. The ideal stop price is predicted.
Any trade that reaches the stop price will be convert to the limit price. The limit price applies to the balance which is not been filled. The trade then be execute on that order level, either selling or buying.
It incorporates both aspects of stop and market orders. let the traders enter or exit positions at a certain price once a stop price reaches. The stop price selects by users, is the price at which your order becomes available. Your stop-market order converts to a market order once the market price reaches your stop price. And executes at a great active market price.
Trailing Stop Order
A trailing Stop Order is determines in order to limit the losses and take into account market volatility. They function similarly to a stop order, but they set the price using a percentage.
For Example: If you have a bitcoin at USD 34,000 and want to sell it at a 2% trailing loss, you would sell it at USD 33,220, but if the price rises to USD 38,000, then you would only sell at USD 37,240.
Take Profit Order
A Take-profit order is places above the current market price for long positions (Buy Orders) and below the current market price for short positions (sell orders).
It is used to close a position automatically when the market moves in the right direction. Allowing traders to secure profits without having to actively watch the market. The Take-profit order is posts in the open order book until it meets its triggering criteria.
A Stop-Loss Order is the one that aims to halt losses after a very small decrease.
For Example: If you bought a Bitcoin for USD 34,000 and then set a stop price of USD 36,000. Suddenly if those prices are falling and you want to protect your Bitcoin investments from losing, then you can set a stop-loss price of USD 33,800.
I can surely tell you that knowing these major Order types Crypto can give you a lot of information. And knowledge on how to invest and trade on the Cryptocurrency Exchange Platform.
To enhance visibility and user engagement, be sure to add all of these order types crypto above to your platform.
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