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If you are just coming into cryptocurrency trading, you might find it difficult to know the kind of order you should use at a particular point of time. There are different orders in the crypto market, but am going to emphasize on limit order, market order and stop-limit order. These are the most popular orders to use while trading.
Limit Orders
Limit order was formulated to give traders the chance to control over the buying and selling prices of their assets. The limit order limits the highest buying price of the buyer, and the smallest selling price of the seller. If you placed a buying order with Limit order, the highest acceptable buy price amount must be selected, and the minimum acceptable sales prices are shown on sales orders. On CoinEx, if you place an order (either buying or selling), it will appear on the order books automatically by their system, and it will be matched with the available orders at the price you set out.
The Limit order gives an equal advantage to both the buyers and the sellers to enter the market or exit the market at their various specified prices. Limit orders majorly benefit traders while trading if there is high liquidity or vast bid and ask spread i.e if there is a wide difference between the maximum price a buyer is willing to buy and the minimum price a seller is willing to sell.
WHEN TO USE LIMIT ORDERS?
Let assume the lowest BTC selling order is 9500 but you want to buy BTC at 9300, you are to use the limit order for the price. If probably the market price falls down to 9300 or below, at this point, your order will be triggered. However, if the price failed to reduce but keeps going up i.e 9500 and above, then your order will remain unfilled.
It is very paramount for the traders to open their eyes and be acquainted with the aftermath of the bid-ask spread on limit orders. We must have it at back of our mind that for a buyer's limit order to be filled, the ask price must fall to the buyer's specified price.
Market Orders
Market order is the type of order that processes a trade at the current market price. If traders want to instantly sell or buy an asset, they are to use market order. On market order, trades are executed at the current price instantaneously. In this scenario, the buyer is willing to buy an asset, he will have to pay the exact price the maker set. However, market order is the quickest way to sell or buy or sell at the best set current price. The market orders are executed at the best limit orders on the order book i.e your buy order will match the lowest limit sell order on the order book.
HOW TO USE MARKET ORDER
Let say you want to buy BTC,
Login into your CoinEx account
Choose BTC market you want to trade and go to the trading page.
Thick the Market order tab
Set the amount of BTC you want to buy, and click the Buy BTC button.
A confirmation message will show that your market order has been executed successfully.
Stop-Limit Order
This is another type of order used while trading. This type of order is also available on CoinEx Exchange. Stop-limit is a type of order that allows the trader to set an order at a predefined price. The simplest way to understand stop-limit order is by mapping out 2 key points (stop price & limit price). Let me break what these 2 points means
Stop price - is the price that prompted a limit order.
Limit price - is the specific price of the limit order that was prompted.
Limit- order functions in a way that once the stop price has been attained, the limit order will be instantly placed on the order book according to the pre-set price and amount.
Using stop-limit is reasonable while trading because it stands as a risk management tool. Due to the unpredictable volatile state of cryptocurrency, using stop-limit will always help you to avoid significant losses.
Using stop-limit will help a trader selling his assets to take profits once his target is reached, and it also help traders to buy at a certain level once the uptrend resistance is breached.
HOW TO USE STOP-LIMIT
You will have to set the stop price, limit price and the amount you to BUY.
Having gain the knowledge, you can easily proceed and open an account on CoinEx and start trading.
If you still need more knowledge, then join CoinEx](www.coinex.com) telegram group here