Cryptocurrency Trading Orders

Cryptocurrency Trading Orders Explained

Trading is not as easy as it might seem at first. Essentially, trading is an art and every professional trader knows it. Following a specific trading strategy, a good trader knows how to manage trading tools and how to use trading orders to minimize losses and maximize profit.   

Pretty much every cryptocurrency exchange offers a wide range of trading orders incorporated into an exchange algorithm. Here are seven popular orders that may enrich your trading experience. Find out the difference between a market and limit orders.

What Is Trading Order? 

In its core, an order is an instruction to a broker to sell or buy a particular asset/commodity. Using a certain trading order – is a strategy that protects traders from considerable losses. Due to the volatile nature of the crypto market, it is important to know how to deal with trading orders. As the market fluctuates every minute, the right order can save you a fortune and bring profit at the same time. 

To be executed, an order should be filled or completed. Example: you place an order to buy 10 BTC at a limit price of $7,000. When there is a buyer who likes to sell you 10 BTC at $7,000 then your order is filled.

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HitBTC trading terminal

Market Order Explained

Market order requires liquidity, so if there isn’t any, it is reasonable to choose another trading strategy. 

A market order is a type of trading order that allows you to quickly buy or sell cryptocurrency at the best price available at the moment. Market orders are executed instantly.

The problem is, you don’t really know the exact final price at which the order will be executed. As the crypto market is volatile, the final amount is provided as an estimate, not as an exact value.

Note also, that market order is executed once there are limit orders placed in the order book (as they provide liquidity). This order is applicable when a trader wants to sell or buy crypto fast and isn’t concerned about the price in general.

Stop Order Explained

This order is aimed to prevent you from considerable losses yet is not suitable to make much profit. A trader places a stop order to sell below or at the current price. A stop order to buy should be set above or at the current price. 

A stop order is a trading order that allows you to trade assets once there is an unwanted market trend. The stop order will be filled at or below/above the determined stop price. 

When the asset’s price hits a determined stop price, the stop order turns into a market order and is executed immediately.

Limit Order Explained

Limit order might help you minimize losses and gain profit. A trader sets a limit price to buy or sell assets. The trade is executed, once the market reaches a determined limit price.

A limit order is a trading order that once put in the order book allows you to sell or to buy the cryptocurrency at the price set by you. 

Traders who use limit orders while trading call market makers as they provide liquidity to the market. 

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Time-in-force orders

  • Immediate or Cancel (IOC)

The order must be executed immediately. For this order, it is possible to be executed partially. However, if any part of the order cannot be filled at the time, this part is canceled. 

  • Fill-or-Kill (FOK) 

FOK order must be executed immediately in its full. If it’s not possible, the whole order is canceled. 

  • Good ‘Til Cancelled (GTC)

GTC trading order is active till it is filled or until a trader canceled it. 

Stop-Limit Order Explained

A stop-limit order is quite similar to the stop order, except once filled, it does not act as a market order. In fact, a trader should set two prices when placing a stop-limit order: a stop price and a limit price. Once the stop price is reached, it triggers the creation of a limit order as well as a limit price for this particular order. 

A stop-limit order is a type of trading order that allows you to create limit orders at a specific price (a stop price).

A stop price for a sell stop-limit order should be placed below the best bid price at the time. Otherwise, the order will be processed immediately. On the contrary, a stop price for a buy stop-limit order should be higher than the best ask price at the time. 

Bottom Line

Do not be distracted by multiple definitions regarding crypto trading. Getting used to all the trading orders might be difficult if you are a novice trader. However, the more you practice, the faster you will be able to choose the right order type and feel the pulse of the market. To help you at the start, instant crypto exchange Changelly allows you to buy cryptocurrency with USD, EUR, and GBP. 


About Changelly 

Changelly is a secure instant crypto exchange that has 150+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2015, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.