Types of orders on cryptocurrency exchanges

Despite the fact that the demand for classic orders on cryptocurrency exchanges has not gone away, duringresearch by analysts from KickAcademy wasAn interesting trend was revealed among crypto traders - on average, 70% of traders periodically use complex orders in trading, and one in three notes a strong influence on profitability when using them.

Read about what types of orders are available to traders, how they differ from each other, and what trading tools are most in demand, read in the material.

More and more traders on the stock exchanges as welland on cryptocurrencies, the use of complex tools is connected to their trading strategy. At the same time, the percentage ratio of the use of simple and complex orders, as well as the attitude of the cryptocurrency market players to how difficult it is to master the functionality of these tools and their impact on the profitability of trading, is extremely interesting.

Research data

The study involved 1716 respondentsfrom over 100 countries. The most active were users from the USA, Russia, India and Indonesia. The survey involved traders who primarily trade crypto assets on exchanges every day.

Let's analyze the types of orders on cryptocurrency exchanges:

• Market Order— this order is executed at the current price (Current Price, CP) in force on the market at the time the order is placed. As a result, the order is executed almost immediately.
• Limit Order (limit order)— this order specifies the maximum price atat which they are willing to buy a crypto asset, or the minimum price at which they are willing to sell it. The price for a limit order to buy must be below the market price, and for a sell - above, otherwise the order will be executed at the market price.
• Stop Order— such an order becomes market as soon asthe price set by the trader (stop price) has been reached. Most often, a stop order is used to close a position when the loss level and profit level for a crypto asset are reached.
• Stop Loss— automatically closes the exposed position when the specified price is reached to limit losses on the asset.
• Take Profit (Take Profit)- unlike stop loss orders, this typerepresents an order to close a position when the profit level is reached. For example, if a trader places a stop loss order at $9, then an asset that was purchased for $10 will be sold when its price drops to $9. If a trader places a take profit order at $11, then when this price is reached, the asset will be sold.
• Stop Limit Order (Stop Limit Order)is a stop order with a limit (restriction) functionexecution prices. If the asset price reaches the stop price, a limit order is placed. In this case, the limit price can either coincide or differ from the stop price. Most often, this order is used to avoid slippage during sudden fluctuations in the asset price.
• Trailing Orders (sliding order)— a dynamic order that automaticallymoves behind the market price. This order does not have a fixed price and allows you to place orders with a floating price level. Thanks to this, traders can conclude transactions at the most favorable rate.

Survey of respondents on the number of hours devoted to trading on cryptocurrency exchanges and the frequency of use of limit orders:

</p>

Most of the respondents are engaged in trading.every day, and every second respondent devotes more than an hour to this lesson. It is expected that the traditional and most understandable exchange instruments will be actively used for a very long time. Simple types of orders that immediately fall into the stock market after they are created remain the most popular. Unconditional leadership belongs to limit orders.

Survey of respondents on the use of market orders and additional parameters for placing orders:

</p>

The second most popular usethere are market orders. Exchange developers try to make placing orders more convenient and flexible, adding the ability to use additional parameters, for example, the time of activation or cancellation of orders, as well as options for their full, partial or instant execution.

Among respondents with the opportunityuse of additional parameters when placing orders, more than 75% of respondents use it. This suggests that traders find these options useful and convenient.

Survey of respondents on the frequency of use of conventional and moving stop orders:

</p>

Stop orders are often used to fixprofit or prevent serious losses on the position. As the study shows, such practices are not just a theory, but rather popular techniques among traders. Among the surveyed traders who know and know how to use stop orders, only 15% never work with them. Trailing stop orders are not available on all crypto exchanges, but traders who have the opportunity to set them actively use them for trading.

Survey of respondents on the frequency of use of complex orders and the functionality of order grids:

</p>

Systems for placing multiple orders (for example,“One-Cancels-the-Other”) is also not available on all crypto exchanges. This function makes it possible to set several orders at once in one interface in order to quickly and conveniently create logic for a position that will allow you to make a profit or minimize losses. Moreover, this will also make it possible to make a single reserve for the entire system of orders, and not for each individual order.

Traders who have access to this functionality,use it already quite actively. Every 2 out of 3 respondents place orders grids that allow you to set the parameters of the price and number of crypto-asset intervals in one interface in order to conveniently and quickly place several orders at once.

A survey of respondents about additional opportunities that they would like to see on exchanges, as well as the impact of these opportunities on the profitability of trade:

</p>

Study participants were asked to choose one.or several options for the desired functionality on the exchange on which they trade. Traders have already tried and began to actively use many mechanics, so the logical result was that the opinions of the respondents were divided in almost equal proportions. Every third participant in the study notes that the use of complex orders and additional functionality significantly affects the profitability of trade.

A survey of respondents about the complexity of using different types of orders and the importance of a large selection of trading instruments on the exchange:

</p>

Almost half of the respondents had difficulty inthe issue of mastering the functionality and mechanics of using different types of orders. This suggests that the work of cryptocurrency exchanges on the issue of a more detailed explanation of the use of complex orders will allow for greater activity of traders. The situation was completely natural and logical that 75% of the survey participants consider the presence of a large selection of functionalities on the exchange as one of the most important criteria when choosing a trading platform.

Research conclusion

During the study, analysts were able to find outthat different types of orders and their functionality, which exchanges are trying to implement, find a response among traders. However, the simple types of orders that immediately fall into the stock market after they are created are still the most commonly used trading tools. Unconditional leadership belongs to limit orders.

A significant part of the respondents in the studytraders notes that the use of complex types of orders and additional functionality greatly affects the profitability of trading. For most, the presence on the crypto-exchange of a large selection of functionality for trading is one of the most important criteria.

In some cases, users givepreference for crypto-exchanges where there are complex orders. However, the study also found that, despite the attractiveness of smart orders and their positive impact on profits, almost half of the respondents have difficulties in mastering this type of trading instrument. It follows from this that exchanges should be more attentive to the issue of training and interactive demonstration of the functionality of smart orders for easy mastering by users.

Obviously, exchanges to retain tradersIt is necessary not only to pay attention to technical support and convenience in working with classic orders, but also to initiate the development of new tools, responding to market demands. Conservative traders should consider introducing new complex orders into their trading strategy, which, as the study showed, are highly likely to bring earnings to a whole new level.

</p>

Rate this publication