Basic Trading Terms

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Preparation is key to those looking to enter the cryptocurrency marketplace, never more true for those new to trading. If you’re interested in trading or speculative participation, the first step is to learn the basics starting with the general terms. Nearly all these terms are used in traditional securities trading, so if you have experience in the stock market this will be nothing new.

General Terms

24/7 Market: Unlike securities markets, cryptocurrency markets do not have open/close times, they trade 24/7 around the world.

Brokerage fee: the amount charged by an exchange for the service of filling an order (usually a flat rate or a percentage of the order value).

Depth Chart: a chart which shows you the supply and demand of selected trading digital currency against the trading currency.

Fill: the action of completing an order.

Market order: an order to buy or sell cryptocurrency immediately; this guarantees that the order will be executed quickly, but does not guarantee a certain price since “slippage” may occur.

Market capitalization (or “market cap”): the total dollar value of a cryptocurrency’s outstanding units; market cap is calculated by multiplying total units by the current market price of one unit.

Current Real-Time Data:  [global-coin-market-cap currency=”USD”]

Max Limits: limits on how much you can purchase and sell on a weekly basis on an exchange. Spending limits are generally increased based on the length of time and volume of trading, along with identity verification (KYC requirements).

Order: a trader’s instruction to an exchange to buy or sell a specified amount of a cryptocurrency.

Order book: an electronic list of buy (green) and sell (red) orders for a specific cryptocurrency. USD spread in the middle shows the difference between the lowest sell order and the highest buy order.

Price chart: helps you understand the pattern of the selected trading pair over specific timeframe with an option to select the intervals like 1m, 5m, 15m, 1hr, 6hr, 1day, 1week, 1month.

Trade history: shows the list of orders getting executed currently.

Trading pair: a trade between one type of cryptocurrency and another. For example, the “trading pair” ETH/BTC.

Trading volume: the number of units of cryptocurrency traded during a designated time period; often measured in 24-hour increments (weekly and monthly measurements are also common). 

Transaction Fees: Fees charged by a cryptocurrency exchange for each withdrawal, buy, sell or send transaction.

Volatility: the fluctuation of a cryptocurrency’s price; may also refer to the market more broadly.

Buy Order Terms

Buy limit order: an order to purchase cryptocurrency at or below a specific price; may or may not be filled because the market must reach the indicated price before it will be executed.

Buy-stop order: an order to purchase cryptocurrency when the market price reaches a specified level above the current offering price; if the price reaches or exceeds the indicated value, then the buy-stop becomes a market order.

Taker Order:  If you accept someone’s offer and buy/sell at their price or at market price, then you are the Taker and person who traded with you is Maker

Sell Order Terms

Sell limit order: an order to sell cryptocurrency at or above a specific price.

Stop-Loss order: an order to sell cryptocurrency when the market price drops to a specified level; if the price falls to or below the specified value, then the stop-loss becomes a market order.

Maker Order:  If you give an offer and someone accepts it — You are the Maker and person accepting it is Taker

COINBASE PRO is an exchange where fees for all Maker orders is absolutely ZERO 🙂  There are also zero fees for withdrawing crypto or fiat funds.
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