Crypto trading is becoming popular throughout the world due to the continuous advancement of technology. If you’re here to jump on the hype, then you should know how to interact with the crypto market. To do this, you must first get a grasp of the different crypto trading orders.
Trading orders are basic commands or instructions to buy or sell a specific digital asset. Think of the crypto trading market as the connection between a seller and a buyer exchanging their tokens.
The trading order is the contract you can use to state the specific type of crypto you want to purchase along with how much you want to buy and for what price you are willing to trade. Alternatively, trading orders can be used by sellers to specify what they want to sell and under what conditions they are willing to make a trade. In crypto exchange platforms, there are various orders offered, each of which performs a specific use in the trade.
Get to know more about the different kinds of trading orders honoured in crypto exchange platforms and find the difference between them right here at Casino Days!
An introduction to the different types of crypto trading orders
Every trader in the market seeks different services for their assets. To acquire these services, you must learn how to use trading orders to specify a command and achieve the goal for your trade. Know more about the crypto trading orders you can use below:
Limit order
This is among the most common types of crypto trading orders. What this order does is limit the maximum and minimum price at which you buy and sell a specific asset. Your limit order would be added to the order book if there is insufficient demand and supply to match your order with other existing orders within the market.
The limit order is best used to control the worst price your order can be matched with. Additionally, the limit price should be within the 20% mark price or else it would be rejected by the trading platform.
Market order
A market order is a trading order placed immediately on an asset you want to buy or sell. This type of trading order sets aside the price of the asset for the meantime and makes the amount of the crypto token your priority.
This type of trading order might present you with unfavourable prices for the asset you want to buy or sell. For that reason, trading platforms protect the users by not matching your order with a price more than 1% above the best ask or 1% below the best bid in the trading market.
Stop order
If you are looking to set your selling or purchasing price below or above the current market price, then you need a stop order for your trade. This type of order is useful in the volatile market of crypto.
Stop orders can prevent losses and help you create huge profits by immediately stopping your order once a certain limit is reached. For example, if the price of BTC falls from US$50,000 to US$40,000 but you’ve already placed a stop order at US$49,000, then you’ve already prevented and neutralized 90% of your possible losses.
trailing stop order
Trailing stop order bears similarities to a stop order. But instead of simply issuing a stop order once a certain price is reached, it trails the price direction of the asset you are interested in and adjusts your order accordingly. This type of order can automatically move the position you have secured once the price of the crypto changes.
For example, if the price of 1 BTC is US$50,000 and you ordered a stop sell at US$49,000 while the market is bullish, then you would lose a US$2,000 potential profit as the price of BTC goes up to US$52,000. Trailing order prevents huge losses to your potential profit by increasing the stop sell price. Instead of US$49,000, the stop sell order will now be executed at US$51,000 once the market starts to fall again.
Stop-loss limit order
If you are a trader who wants to play it safe, then stop-loss limit orders are for you. This kind of trade order limits the amount you would lose from an open position in the market. To process this order, you must provide two price limits: the limit price and the stop price.
Your limit price is the worst amount to which your order can be matched while the stop price is the amount at which your limit order would be posted once it is reached. Both price limits and stops prevent you from further losing assets and ensure that your trades would be within your limitations of loss.
Stop-loss market order
Just like the stop-loss limit order, the stop-loss market order limits your losses from an open position in the market. For this order, you need to provide a stop price, which will trigger the stop order and submit a market order into the order book once reached. This will close the position of your derivative trading product at the best possible price in the market, provided that there is sufficient demand for the trade.
Take profit market order
This type of trading order allows you to set a target profit amount that would close you out of an open position in the market when you reach it. The price you place in your trade order will trigger the take-profit order and place a market order into the order book when the price is reached.
Bracket order
This type of trade order allows you to place three orders in the market simultaneously. One order can be made for an open position and the two other orders can trigger orders to take profit and stop loss.
Trigger entry order
This trade order allows you to enter a position using a trigger order. For this order to work, you must set a trigger price that would trigger your order and submit a market order when reached. Along with the trigger price, you must also set a limit price, which would represent the worst price at which your order can be matched in the market.