How do exchanges work? | Bitcointalksearch.org

husencoe

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

I think this is because the difference in buying momentum that occurs on one exchange does not immediately change the price of all exchanges. If large purchases occur in an exchange, the price on the exchange will rise significantly locally and it will take some time for the data to update globally. But this price difference does not last long, but there will still be a slight price difference. This is what is utilized by a certain group of traders called Arbitrage. They use this price difference to make a profit.

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

I think this is something that usually happens if we look at several exchanges. This is because the price displayed on an exchange is based on the most recent orders. The number of transactions that occur on each exchange is definitely not the same at one time, thereby increasing the price on one exchange, even though there is still no price change on the other exchange. But this will not last long because there will be another correction after a few minutes so that the price is closer to the same.

But you have to be careful in looking at price differences on exchanges that are not well known. It's possible that an exchange that looks cheaper is a fake exchange that attracts prey. Be aware of it and always use verified and reputed exchanges.

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Quote from: lixer on March 14, 2024, 11:00:32 AM

Crypto supply will always be higher than the demand because they are usually millions or more than that. Price change can also be termed as volatility. The volatility is higher when more people are selling apart from buying a coin. Price can go low if there are less demand and it happens due to several reasons like people are in crises but if not, maybe the exchange or the coin have only gone bad.

OP is talking about rates, and by that I think the services fee of an exchange is also covered with it. This is the same to what you said about how an exchange operates, this is why it is important to analyse them if which exchange will suit us according to our needs.

I do agree that volatility is important for an exchange because it means there are a lot of people trading in that situation and if people are trading then they are doing a good job. I know that trading fee is the way to make money for these places, so when there is volatility that means they make the most money.

If we are talking about just the fee, then the fee depends on the power of the exchange that can ask it, one that asks higher means that they know you won't leave with higher, and the one asking lower means they are trying to get you to use them. The prices however are a different topic, these days I do not think that there are many places with different prices, I do not believe that many like that stayed until this day.

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Quote from: $weetne$$ on March 14, 2024, 12:43:39 AM

Quote from: Patrol69 on March 13, 2024, 11:54:24 PM

A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low.

This would had been my word too, exchange are just a platform that connects the buyer and seller and the price difference on the different exchange is based on the traders on the different exchanges. Some exchange have more active traders and they'll be willing to buy more at a higher price because they believe the price of the coin is about to rise because of a news about the coin that'll make the demand of the coin to increase. Without exchange it would had been very inconveniencing to be buying and selling cryptocurrency because of the scammers that would had been scamming new Investors that don't know how to make use of P2P sites very well. Newbies are still getting scam but the numbers aren't many unlike how it would had been if we didn't have exchanges operating.

Newbies are most likely to get scammed by fraudsters. You know about a subject surely you don't do wrong knowing about that subject but when newbies don't know about a subject and when they are not aware of such deception but they fall into the trap of such deception. However, even though fraudsters' cheating strategies have changed compared to earlier, people have become more aware, so fraudsters can't cheat users much now. P2P trading is definitely one of the best features for various exchanges as it allows you to buy and sell your own dollars or other currencies without third party transactions.

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The variation in price is influenced by many things which could range from 5he exchange personal reasons. Sometimes various exchanges apply price variation probably to help them pull traffic to their platform or even help them get a certain number of users on their platform so as to increase the volume of transactions probably daily or weekly, monthly and annually depending on their preference a d what they aim to achieve with the price variation, sometimes the could actually manipulate Price for awhile and later return it to normal.

If the exchange suits you then you could work with them based on their price or their preferences which suits you too depending on what you aim to achieve using the platform.

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In my experience, exchange prices can vary due to factors like demand, supply, and transaction fees. The volume of trading on an exchange can also influence its price. Since exchanges update prices independently, they may differ from one another based on the latest orders. It's something I've noticed while navigating the crypto market, as mentioned by others here.

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Quote from: adpinbr on March 13, 2024, 10:29:07 PM

Yes, it is just simple. It is just an analysis of demand and supply when the demand is more higher than the supply the price changes a lot and it gets higher and at that point, the rate is pumping higher it also the same thing to different exchange. The price can also go low. The supply is higher than the demand. It also affect so different exchange has the different value and how the operates. you can actually check different exchange and compare and see how the Peace is sometimes exchange with his different from the orders and you asked why that is because of the operating system of the exchange traffic is on the exchange maybe the supplier any of this is between the two demand supplier, we have different exchange. If you take your time and compare how they operate and go to the trading side if they have, you will understand what I am talking about changing values and what causes it.

Crypto supply will always be higher than the demand because they are usually millions or more than that. Price change can also be termed as volatility. The volatility is higher when more people are selling apart from buying a coin. Price can go low if there are less demand and it happens due to several reasons like people are in crises but if not, maybe the exchange or the coin have only gone bad.

OP is talking about rates, and by that I think the services fee of an exchange is also covered with it. This is the same to what you said about how an exchange operates, this is why it is important to analyse them if which exchange will suit us according to our needs.

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Quote from: Patrol69 on March 13, 2024, 11:54:24 PM

A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low.

This would had been my word too, exchange are just a platform that connects the buyer and seller and the price difference on the different exchange is based on the traders on the different exchanges. Some exchange have more active traders and they'll be willing to buy more at a higher price because they believe the price of the coin is about to rise because of a news about the coin that'll make the demand of the coin to increase. Without exchange it would had been very inconveniencing to be buying and selling cryptocurrency because of the scammers that would had been scamming new Investors that don't know how to make use of P2P sites very well. Newbies are still getting scam but the numbers aren't many unlike how it would had been if we didn't have exchanges operating.

Patrol69

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A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low. Among all the listed coins, the coin which is in high demand tends to increase in price and if a big investor sells all his coins at a relatively low price, it has some bad effect on the market i.e. the market does some dumping. One person buys and the other sells. This is how exchanges usually work.

adpinbr

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Yes, it is just simple. It is just an analysis of demand and supply when the demand is more higher than the supply the price changes a lot and it gets higher and at that point, the rate is pumping higher it also the same thing to different exchange. The price can also go low. The supply is higher than the demand. It also affect so different exchange has the different value and how the operates. you can actually check different exchange and compare and see how the Peace is sometimes exchange with his different from the orders and you asked why that is because of the operating system of the exchange traffic is on the exchange maybe the supplier any of this is between the two demand supplier, we have different exchange. If you take your time and compare how they operate and go to the trading side if they have, you will understand what I am talking about changing values and what causes it.

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Quote from: Kakmakr on March 04, 2024, 08:32:29 AM

So guys... be safe out there and protect your coins. It's crazy season and the scammers are very active.

Besides the reasons you have talked about there are many others and one of them which I think is the most prominent is, when bull run or new ATH is going to make, many newbies in the hype of making money joins the crypto market and in that hype they want to avail every opportunity and they started to give importance to each and every offer they see. Either they are seeing it on Twitter, or on TG or even on their emails. They don't think for another second as most of them don't have the knowledge of how scam happens in crypto.

So, these newbies are basically the main targets of the scammers, and once 2 or 5 out of 100 fall prey to these scams, the hackers, or scammers make enough money. I suggest to these newbies, that they should get some knowledge before getting into BTC, as knowledge will make you more competitive, otherwise, you will lose your funds in the market. But I have to admit that High price = more scams But in bear market, many new comers also joins as they think this is the right time, and that time many scammers are active in the market. I think the level of scams is a little confusing to predict by considering the hype of the market. We should use indicators to calculate this fact.

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Quote from: Bushdark on January 26, 2024, 02:38:32 PM

Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

We need to be very careful on how e trade without stop lose. This can become a big problem to us.

I will like you to emphasize more on the stop loss of a thing. Do you believe the exchange see when you are trading with a stop loss and when you are trading without it? I have always had this believe that there is definitely something watching where you placed your stop loss and will go trigger it and it it will reverse immediately it is triggered.

Arbitrage traders make and regulate the difference between prices in exchanges and earn a living from there. I think that exchange owners has little or nothing behind it.

adpinbr

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The exchange rate is been controlled by the buyer and sellers in the particular exchange. All depends on the both parties, but I just wanted to know that, even if the rate is different from from order exchangers it will not be much difference, but I will be a slight difference, but the difference it won’t be much the particular exchanger, I just want to explain this to you, so you see how it works in an exchange for example, someone want to sell the person My decided to look at all of which people are selling then person may decide to sell lower or little higher from what others are selling or we decide to sell if another person comes the person will look at the last person that is higher than the rest and top is all her own rates. It’s going high when did demand how much the rates will be going high gradual process when the demand happens to be higher than than the supply. and this process usually happen in different exchanges and that is why the rate are not the same and you cannot control the rates, and then simply means rates have been controlled from the P2P trading in different exchange, for it cannot really , be determined

wxa7115

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

Exchanges function under the same principles than any other business or market, lets suppose that you want to buy a smartphone, if you take the time to do a small research you will notice that almost all stores will have a different price for the very same model.

But why is that? After all we are talking about the very same product, and while there are many reasons for this, transportation costs and profit margins are two of the most important factors that make the price of the same good to be different on each store and it is your job as a consumer to find the best offer, and while exchanges do not work exactly in this way, the principles which dictate the price of an asset are the same, as each exchange has its own supply and demand and this makes the price of the same asset to be slightly different.

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Quote from: el kaka22 on January 25, 2024, 02:58:21 PM

The fact is that everyone said basically the same thing but also different things basically shows that people do not really read. Most exchanges do not show different prices, sure maybe for an instance, but usually they don't. If one exchange had such a different price than the other then we would probably see someone arbitrage it away anyway.

So, the question itself is moot, I would love to see OP provide proof that there are 2 exchanges who have more than 1% difference between prices. In fact, better yet, OP should just use this information to do arbitrage, because if one has different price than the other, you could very well make money off that. The question is wrong, there isn't any price differences between exchanges.

I agree with you for cryptos having a deep liquidity, there are too many trading bots tracking orders above or below the price of other exchanges, buying and selling those opportunities instantly, to keep different prices for a long time. Exchanges use such bots themselves to make extra money. But on small cap coins, markets have higher spreads and less liquidity and you can find good opportunities sometimes. Anyway differences on large cap cryptos are mainly due to fees(trading fees and withdrawal fees).

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

Sometimes exchange want to make there own money in the best way known to them. Sometimes they would not want to reduce liquidity because there are way they can keep traders in fear of loising there own funds. This can also be a reason to lure more investors and traders to there exchange to depositing there coins. Exchanges makes more money from us in case we don't understand how that works.
We need to be very careful on how e trade without stop lose. This can become a big problem to us.

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

The price basically depends on the buy and sell amount of a particular coin. If you know basic economics, then it depends on the policy of supply and demand. If the supply is sufficient to fulfil the demand, then the price doesn’t fluctuate a lot, but if it’s not possible, then the price really goes up and down. On the other hand I have seen the price of coin in popular exchanges always remain same. So price fluctuations aren’t a big deal at all.

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The difference in prices for each exchange is due to the demand and supply on each exchange being different, but generally the price differences on each exchange are not too different.
as an example
on the exchange A has a demand of $1000
on exchange B there is a demand of $100, so it is quite natural that it is different, I think the price difference will not be too big between exchanges A and B

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Quote from: Jonnytrader1988 on January 18, 2024, 04:23:33 PM

My question is why is the rate higher on one exchange than on another?

That's because they are two different exchange and due to low or average demand going on that trade. It is the same thing when there is a demand on a coin, one tend to go up faster than the other especially on the one that has the highest volume but the price difference are just slightly different. If the price difference is very high, that's when you see traders doing arbitrage trading. Traders will start buying from an exchange that is lower in price to sell in the one that has high price and the demand on the lower will adjust itself to meet the other one.

It's a common thing you see on centralized exchanges, you hardly see it on decentralized exchanges and that's because they use chainlink data feed so as to get the accurate price for a coin and because it's a decentralized data, it's hard for people to temper with it or even manipulate it.

el kaka22

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The fact is that everyone said basically the same thing but also different things basically shows that people do not really read. Most exchanges do not show different prices, sure maybe for an instance, but usually they don't. If one exchange had such a different price than the other then we would probably see someone arbitrage it away anyway.

So, the question itself is moot, I would love to see OP provide proof that there are 2 exchanges who have more than 1% difference between prices. In fact, better yet, OP should just use this information to do arbitrage, because if one has different price than the other, you could very well make money off that. The question is wrong, there isn't any price differences between exchanges.

Topic: How do exchanges work? (Read 498 times)