crypto exchange

What is an order on a Cryptocurrency Exchange

Trading platforms like TabTrader act as intermediaries in the acquisition and sale of digital assets. Orders on the cryptocurrency exchange are exchange orders that users send to the server. Such offers do not always provide for the instantaneous conversion of one asset into another. In some cases, the order is executed after a long time or even automatically deleted. Beginners need to understand the types of trading orders in order to avoid mistakes when exchanging digital money.

Types of orders on the cryptocurrency exchange

cryptocurrency exchange

The execution procedure differs for different types of applications. In one case, the operation is completed immediately at the current rate, in others, it is postponed until certain conditions are met. It could be:

  • Achievement by quotes of the level set by the trader.
  • Correction of the rate of a crypto asset after a pronounced trend movement.
  • A gradual change in price and coins in the direction necessary for the user.

Market order

A market order is executed at the best price available in the order book. Beginning traders should keep in mind that a transaction is not always processed instantly. The exchange rate depends on the server’s response time to requests and liquidity (the availability of assets on the exchange balance). Therefore, in some situations, the transaction is rejected or carried out at a new price.

Limit

On some crypto exchanges, a limit order is called Buy/Sell Limit. The transaction is processed if the asset rate reaches the level calculated by the user. Limit transactions are carried out at a price that is more favorable to the party than the current market rate.

By default, the request remains valid until it is triggered or canceled by the user. Experienced traders try to deactivate such orders as soon as the market situation changes.

Stop loss

Some platforms also use the terms Market Stop. Its purpose is to fix losses if the cryptocurrency exchange rate changes in the opposite direction from the desired one. Skilled traders always trade with Stop Loss. This protects them from losing their deposit. But adding an order to the order book does not guarantee its execution at the specified price. If the market starts to panic, quotes may change too quickly. The transaction will be processed at a less favorable rate.

A market stop can be used for more than just fixing losses. In some strategies, opening a position is allowed only with a pronounced trend movement. In this case, the market stop allows you to buy an asset only if it rises in price and the quotes reach an important price level.

Scalable

This type of order is designed for a gradual set of positions. Since no trader can predict the exact movement of quotes in advance, many trading strategies involve buying assets in stages. In this case, clients indicate in the order form, through which interval on the chart repeated transactions should be carried out. Usually, each stage of the transaction is tied to the price of a crypto asset, calculated in points or dollars.

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