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Cryptocurrency trading comes with a number of instructions and rules. There are certain conditional orders that you may attach to your trade order. Since this is a world of technology and automation is a part of the process, the instructions will specify how an order should be executed. You can have specific orders for buying or selling your cryptocurrency. With trade orders, you are bound to be more objective in your trade and a certain level of emotion is eliminated from the process.
There are different types of orders in the crypto markets and all of them fall under these categories:
- Stop Order
- Limit Order
- Market Order
The stop order is an instruction to buy and sell order at a particular price for a certain order.
The market order is a trading order where it is executed at the prevailing market prices.
Finally, a limit order will be executed at future prices when crypto-assets get to a specified price.
All the trade orders are stored in the order book. As a trader, it is important to understand these orders and learn how you can use them strategically. Once you attach instructions to a certain order, it will be executed per the conditions provided.
Different Types of Orders in Crypto Trading
Every trader or investor tries to find the best ways to maximize gains with any venture they get into. Understanding the various strategies to use with crypto orders will help you in a big way. Some of the common orders that are important to familiarize yourself with are limit and market orders. These will be used to buy and sell crypto assets in the way that would prefer. The trade orders give you some form of control and will shield you from sudden changes that may affect your trade drastically. Besides the basic buy/sell orders that you can use on Bitcoin Circuit, there are other advanced orders that you should be aware of.
Those who are not conversant with cryptocurrency assume that losses are inevitable in crypto trading. However, this is not the case as stop-loss orders are meant to protect your interests while trading. With this order, you will be making a request to the platform to sell your crypto assets when they drop to a certain price. As such, you will be protected from potential losses.
You can prevent a market loss by creating a stop-limit order. These are instructions to stop the order when the value of the assets gets to the defined stop price. As soon as the order has been set, the trading network will execute a limit order when the value of the assets gets to the stop price.
You can have a couple of limit orders on an asset. The scale order is very important for traders as it can prevent the impact of huge orders on the market. In essence, you will use this order to set up limit orders at different intervals and this can have helped you earn from the changes in the value of the assets.
Lastly, there is what is known as time-in-force. While this is not specifically an order type, we have included it here for a purpose. These are tools that help in the modification of a limit order. As the name implies, this will be based on specific time constraints. There are several orders that come with this option and they can be of great help to traders.
There is so much that goes into crypto trading and understanding the various types of orders will give you a head start. Using trade orders in the right manner will keep you on track and ensure that you are making profits and avoiding market losses like a plague.