Types of orders on the BIT.TEAM crypto exchange

Types of orders on the BIT.TEAM crypto exchange

By bit.team

Both beginners and users with considerable experience in buying/selling cryptocurrencies on the BIT.TEAM spot exchange, do not pay attention to the Limit, Market, Stop-limit buttons present on the exchange page. Since the transaction can be completed by simply selecting the appropriate order. But once you get to know that there are different orders, and each type can be beneficial in one situation or another, then this means that you can trade with a larger profit. Isn’t this the main strategy of stock trading?

Of course, such knowledge will not help to become a Wolf from Wall Street, but information on how stock markets work is definitely worth being discussed.

The main types of exchange orders

On peer-to-peer services, in order to purchase, sell or exchange cryptocurrency, you simply select an ad in the appropriate section that meets your needs (high rating, good price or sufficient funds). Or you place your own, on more favorable terms for you, depending on whether you want to get more profit or want to complete the transaction as soon as possible.

On exchanges, orders look like ads, regardless of whether we speak about traditional or crypto platforms.  In its essence, such an ad is an order for sale/purchase of crypto assets with some indicated parameters, which will subsequently be executed automatically, without the participation of the user who created the order.

There are two main categories of orders: market and limit

  • if you want to make a transaction immediately (and then the purchase/sale of cryptocurrency will be made at the market price), then this is a market order;
  • if you don’t mind waiting until your order is executed at the price you set, then we are talking about a limit order.

The idea seems to be simple and clear. But with its own peculiarities that should me mentioned. Knowing these peculiarities will help you take advantage of all the benefits of cryptocurrency exchange trading, ensuring maximum profit depending on the trading strategy used.

Market Orders main features

An order that is executed immediately after its creation is a market order. It is called in this way since the purchase/sale is made at a weighted average market price.

Thus, if after registering on BIT.TEAM you want to buy 0.1 BTC at a price of $19,000, and you do not want to wait till the price drops (after all, the current trend may be the opposite for a long time), then you need to place a market order indicating that you are ready to give $1900.

As a result, the transaction will soon be completed automatically, hanging in the “Active orders” column. After crediting bitcoins to the wallet, if you want to find out who sold you these 0.1 BTC, go to view the archive (column “Order History”).

In our case, a list of executed limit orders will be shown, that is, orders where the value of the cryptocurrency offered for sale is indicated. Let`s say, for example, that another user placed a limit order, ordering to sell a certain amount of bitcoins at a price of $19,000. In this case, as soon as your request appears in the list of active orders, a “pair” is formed, and the transaction will be closed.

In essence, your order is not entered into the database: in fact, you specify which of the existing orders to close, that is, to remove from the list. In accordance with the exchange terminology, you become a taker, and a bitcoin seller becomes a maker. You also need to know that the maker has a lower transaction fee, since it is he who increases the liquidity of the crypto exchange, bringing it profit. In other words, it is more profitable to be a maker than a taker, regardless of whether you are a seller or a buyer.

Note also that the taker, by placing his order, thereby instructs the exchange to carry out a transaction at the best of the current available prices. But you should understand that the concept of “the best available current price” is not equivalent to the value that was indicated at the time you placed the market order, so the total value of the transaction may not be exactly what you expected and what is obtained mathematically. But usually the price difference is small, because the exchange rate couldn`t change that much.

Limit Order

If you choose this option, you thereby instruct the exchange to sell/buy the specified number of coins at a fixed or higher (sale) or lower (purchase) price. In other words, your order will hang in the active list until a suitable offer from the taker is found. It may happen soon or not so soon. There is also a possibility that your order will not be executed if the trend of the exchange rate is the opposite of the expected one. In this case, it will not hang indefinitely, but more on that later.

Limit Stop Order

Cryptocurrencies are characterized by high volatility, especially at times of a bullish trend. This means that if you want to sell 0.10 BTC at a price of $20,000 at the current value of $19,000 on a limit order, then if BTC grows in price to $22,000 in a week, your order will be considered executed at the limit value, not the market value. To avoid such losses, a limit stop order is used, in which, in addition to the limit, an intermediate stop value is indicated.

Activation of such a limit order occurs when the stop price is reached, but it will be executed only when the value of the coin reaches the limit level.

Let’s say you have created a limit stop order to sell bitcoin with a stop price of $19500, when the market value of the token is $20,000. If the BTC rate drops to $19500, the order is activated at the limit price ($19000). But it is not guaranteed that it will be executed, because after falling to the stop price, bitcoin may start to grow again.

Simplifying the above, we note: the limit order immediately gets into the active list, and the stop order will appear there only when the price of the cryptocurrency reaches the stop value, which will avoid losses due to sharp exchange rate jumps.

The duration of the exchange order

An important indicator showing when the exchange request expires. Specified when creating a transaction by the user.

GTC orders

An open-ended order used by most exchanges, including BIT.TEAM, by default. The order will remain in the active list until it is executed, or until the maker cancels the transaction.

Classic stock markets practice closing unfulfilled orders when the exchange closes. But since crypto exchanges operate 24/7, the concept of “the end of the exchange day” does not exist here, which is why GTC orders are the most common and popular.

IOC orders

These are transactions of the “execute or close” type. If you want to purchase 1 BTC by specifying the price of $ 20,000 in the order, but at this cost only 0.5 BTC is currently available, then you will receive only half of bitcoin to your wallet, and your order will automatically close.

FOK orders

An order of the “execute or cancel” type. If you placed an order, as in the example above, but there was no suitable “pair” in the list of active orders, your order will be canceled.

Summing up

It is quite possible that you will not be able to delve into these details from the first time, but over time, you will see that knowing the types of orders and the specifics of their execution can significantly improve your trading strategy.