Sometimes in our personal messages, users ask
"How to trade on the Freetrade Finance Exchange?"Of course a huge amount of information on this topic is freely available on the Internet.
But first you need to know the three basic types of trades you’ll do with cryptocurrency are market, limit, and stop orders. We explain each using simple terms:
A
MARKET ORDER attempts to buy/sell at the current market price. It buys or sells “right now.” What it does is it buys or sells available limit orders sitting on the books right now. You’ll pay a fee for a market order as a rule of thumb. You can set a market buy or market sell.
A
LIMIT ORDER places an order on the order book in hopes that it’ll be filled by someone else’s market order. When the market price reaches that price, it’ll buy or sell (AKA “fill”) if there is a buyer or seller. With the exact mechanics of exchanges aside, the basic concept here is that someone else is placing a market order and that a buy or sell will fill your limit order. Limit orders aren’t subject to slippage and sometimes have lower fees than market orders. You can set a limit buy or limit sell.
A
STOP ORDER places a market order when a certain price condition is met. So it works like a limit order, in that it goes on the books, but it buys or sells like a market order. Stop orders are therefore subject to the same fees as market orders and are subject to slippage. You can set a stop buy or stop sell. A stop sell order is also known as a “stop loss.”
With that covered, people will likely want to know which order they should use. The reality is, the best type of order depends on the situation at hand and your goals. However, since getting to pick your exact price to buy/sell and avoiding fees is attractive, it can be smart to attempt to use limit orders primarily.
Which order is better to use? It depends on the situation at hand and your goals.
However, since getting to pick your exact price to buy/sell and avoiding fees is attractive, it can be smart to attempt to use limit orders primarily.
