Hello friends. I will talk about the types of orders in cryptocurrency, in particular in 3commas. The fact is that this platform offers more types of orders and fine settings. This will allow you to get the most profit from your trades, compared to regular orders on crypto exchanges. I am sure that most traders, especially beginners, do not even know what the difference is between orders in the digital market. Let’s get started!
Market order in crypto
So, there are 3 main types of orders: Market, Limit, and Conditional. A market order is to buy or sell right now at the current price. At the same time, the current price may change, and most often not for the better. It is not recommended to use such an order on pairs with a small volume, as it often leads to a large slippage.
A Market order is used for a Panic Sale. That is when you see the price drop sharply, and to maintain your profit or reduce your loss, you manually sell to the market. Also, this order is used for urgent purchases, if the price of crypto rises sharply and you are in a hurry to enter a deal as quickly as possible. A Market order is best used to limit your losses, that is, in an urgent sell or in the Stop Loss settings.
A Limit order is a pending order to buy or sell at a clear and desired price. Such an order is intended to be a buy limit after a price drop or a sell Limit after a price rise. Simply put, buy when the price drops to the desired level and sell when the price rises to the desired level.
Limit order in crypto
The first advantage of such orders is that you pay less commission to the crypto exchange (for market orders, such a commission is much higher, and the cost of commissions when trading with large amounts can be significant). The second advantage of Limit orders 3commas is that you clearly know at what price you will buy or sell coins, while there is almost no slippage. For this reason, Limit Orders are usually used for making a profit by “Take Profit”.
The third advantage of this type of order is the possibility of instant execution at market rates. This works if you create a Limit order to sell below the current token price, or if a buy order is above the current price. For example, the current price of Bitcoin is 9000 USDT and you want to sell it quickly, with a minimal commission, and at a fixed price.
Alternatively, place a Sell Limit order at 8999 USDT. Perhaps even such a sale will even be more profitable than selling Bitcoin on a market order for 9000 USDT. Or another case – you start trading a new coin on the listing in Binance, but the price for it constantly jumps, and it may be expensive to take on the market, and there is still an exchange commission.
Then you create a Limit order to buy a few pips, percent, cents, or dollars above the current price of the coin, and the chances are that you will catch a good price more than buying at the market. But this type of order also has disadvantages. The first drawback is a Limit order, unlike a market order, it is visible in the “Book of Orders”, which, in turn, is seen by other traders and big players, and can use this data for their own deals.
The second drawback is that you have to wait for the execution of the Limit order, and sometimes the order is not fully executed and you have to cancel and create it again. Or it may not be fulfilled at all. The Market order, in contrast, is always executed in any situation. Therefore, if you urgently need to buy or sell a crypto, such an order most likely will not work for you.
A Conditional order in crypto
Now let’s talk about the third type of order – Conditional. A Conditional order is only available on the 3commas platform, in Smart Trade, Smart Cover, Smart Long, and Smart Short options. Simply put, a Conditional Order is the same Limit Order, but with more subtle settings that allow you to create certain conditions for entering a trade.
I just wrote about Limit Orders that if you want to buy at a higher price or sell at a lower price below the current price, they will be executed instantly at the market price. But perhaps you want to wait before buying or selling, for example, you are trading level breakouts or following technical analysis. For these purposes, a Conditional Order is useful, available only in 3commas.
This type of order is needed to buy after a price increase and sell after a price fall. At 3commas, Conditional Orders are available in Smart Trade and bots for both the spot and the futures market. This order is especially useful for short trades when you plan your entries and exits from trades differently from other traders.
I personally use a Market Order when I urgently need to exchange one cryptocurrency for another without the purpose of speculation. I also apply for this order in Stop Loss or if I need to close a deal manually in profit or loss by the market price. I use a Limit order to make a profit in the long run through Take Profit or buy coins when I’m not in a hurry, but want to get the best price. And I apply for a Conditional Order when I trade the breakout of the Support / Resistance levels.
The video about the types of orders in cryptocurrency at 3commas is completed. I told you about the Market, Limit, and Conditional Orders, what advantages and disadvantages each of them has, and how they differ from each other. Please, try to understand this video carefully because it is a very important point in crypto trading that will help you save money. Until next time and see you in new videos on botcryptotrade.com