Ethereum: Limit order versus Market order

Market and marginal order cryptocurrency trading art

When it comes to buying and selling cryptocurrencies such as Bitcoin (BTC), traders use different types of orders for their operations. Two simple types are limited orders and market orders, both for guaranteeing a specific price of assets. However, there is a subtle difference between two that can greatly affect the result.

Limit orders: “Ask” side

The marginal order is an order for a “inquiry” or “offer”, which the trader has submitted (for limited orders) or for sale (for market orders) of assets at a predetermined price. Unlike a market order that allows customers and sellers to execute transactions at any price in the specified range, the threshold determines the specific price the buyer must press to perform the operation.

For example, if you want to buy one Bitcoin for $ 593.18 per unit, you would place a “market order” (also known as “everything or nothing”). This means that if the market price is lower or higher or higher in $ 593.18, your position will be immediately sold and will lose any additional losses exceeding the current price.

On the contrary, if you want to buy one Bitcoin $ 593.18 per unit for a marginal suspension (or make a profit) for $ 592.50, you would place a “marginal order”. This means that even if the market price decreases below $ 592.50, your position will remain open and can be sold when it reaches $ 593.18.

Market orders: “Buy” half

The market order is “all or nothing” to buy or sell an order that allows customers to carry out transactions for any price in the specified range. In essence, this is the opposite of the boundary order, as it does not set a specific price, but rather to trade at the best price.

For example, if you want to buy one Bitcoin $ 593.18 per unit with a market order, your position can be sold immediately when the market price reaches or crosses $ 593.18.

Main differences

So what are the main differences between marginal orders and market orders?

* Price setting : Limited orders set a specific price of assets, and market orders carry out trading in the specified range at all costs.

* Risk Management

: Market orders allow customers to leave volatility at a lower price, which may allow them to buy property at a discount. On the other hand, restricted orders require buyers to reach the exact marginal price to carry out surgery.

* Flexibility : Market orders provide more flexibility at trade at various prices in the range and the boundary orders are more restrictive.

In conclusion, it is very important to understand the difference between boundaries and market orders in order to successfully trade cryptocurrency. Knowing when to use each order type, traders can optimize their risk management strategies and increase their ability to make profitable transactions.