Exchanges and trading
How exchanges work: orders, fees, the order book and trading styles.
37 terms · 1 guide
Guides
For beginners
Bid and askThe bid is the best price someone will currently pay for an asset, and the ask is the best price someone will currently sell it for. The…BeginnerCEX and DEXA CEX is a centralized exchange: a company holds your funds and runs the order book. A DEX is decentralized: swaps run through smart…BeginnerCopy tradingCopy trading is automatically mirroring another trader's trades in your own account, scaled to the amount you allocate. You copy their…BeginnerCrypto exchangeA crypto exchange is a platform where you buy, sell and swap cryptocurrency for money or other coins. It matches buyers with sellers and…BeginnerDay tradingDay trading is a style where trades are opened and closed within the same day, with no positions held overnight. The trader aims to profit…BeginnerDemo accountA demo account is a practice account with virtual money where you trade at real prices without risk. It is for learning a platform and…BeginnerLimit orderA limit order is an order to buy or sell at your price or better. You control the price, but a fill is not guaranteed: the market may…BeginnerLiquidityLiquidity is how easily an asset can be bought or sold quickly without moving the price much. In SMC the word also means zones where stops…BeginnerListing and delistingListing is when an exchange adds a coin for trading; delisting is when it removes it. After a delisting you can no longer trade the coin…BeginnerMaker and takerA maker places a limit order that sits in the order book and adds liquidity. A taker's order fills right away against existing orders and…BeginnerMarket orderA market order is an instruction to buy or sell right away at the best price available in the order book. It fills instantly, but the…BeginnerMemo and tagA memo or tag is an extra code in a transfer that tells an exchange which customer to credit when coins arrive at a shared address.…BeginnerOrder bookAn order book is the list of limit buy and sell orders for an asset, grouped by price level. It shows how much people are ready to buy and…BeginnerP2P tradingP2P trading is buying and selling crypto directly between people: money moves by bank transfer from one person to the other, while the…BeginnerPosition tradingPosition trading is a style where trades are held for weeks, months or longer to catch a big trend. Decisions come from daily and weekly…BeginnerSlippageSlippage is the difference between the price you expected your order to fill at and the price it actually filled at. It grows with low…BeginnerSpot tradingSpot trading is buying and selling the actual asset with immediate settlement: you pay and receive coins you can withdraw to your own…BeginnerSpreadThe spread is the gap between the best sell price (ask) and the best buy price (bid). It is a hidden cost of every trade: the wider the…BeginnerSwing tradingSwing trading is a trading style where you hold a position for several days to a couple of weeks to catch one price move.BeginnerTrading botA trading bot is a program that opens and closes trades by itself under set rules, through an exchange API or a built-in service. It…BeginnerTrading feeA trading fee is what an exchange charges to execute a trade, usually a percentage of its size, such as 0.1%. You pay it on every buy and…BeginnerTrading pairA trading pair is two assets that are exchanged for each other on an exchange, such as BTC/USDT. The pair's price shows how much of the…BeginnerWithdrawal networkA withdrawal network is the blockchain an exchange uses to send your coins, for example USDT on Ethereum (ERC-20) or Tron (TRC-20). Sender…Beginner
Advanced
API keyAn API key is a key and secret pair that lets a program access your exchange account without your login and password. You set its…AdvancedArbitrageArbitrage is profiting from a price difference for the same asset across venues or instruments: buying where it is cheaper and selling at…AdvancedGrid botA grid bot is a bot that places a ladder of limit orders across a price range, buying on steps down and selling on steps up. It profits…AdvancedMarket depthMarket depth is how much buy and sell interest sits in the order book at different prices. The deeper the market, the more you can buy or…AdvancedMarket makerA market maker is a trader or firm that keeps both buy and sell orders in the market at all times, providing liquidity. It earns the…AdvancedOCO orderAn OCO order (One Cancels the Other) is a pair of linked orders. When one of them fills, the other is cancelled automatically.AdvancedOTC tradingOTC (over-the-counter) trading is buying or selling a large amount of crypto directly through a dedicated desk or broker, away from an…AdvancedPost-only orderPost-only is a limit order setting that only lets the order enter the book as a maker. If it would fill immediately, the exchange cancels…AdvancedProof of reservesProof of reserves is a check that an exchange holds enough assets to cover customer balances. It is usually a snapshot of the exchange's…AdvancedScalpingScalping is a trading style where you catch small price moves and hold a trade from seconds to a few minutes. There are many trades, and…AdvancedStop-limit orderA stop-limit order is an order with two prices: when the market touches the stop price, a limit order is placed at your limit price. It…AdvancedSub-accountA sub-account is a separate account inside your main exchange account, with its own balance, positions and API keys. It helps you separate…AdvancedTime in force (GTC, IOC, FOK)Time in force is the rule for how long an order stays live and what happens to any unfilled part. The main options are GTC, IOC and FOK.AdvancedTrailing stopA trailing stop is a stop-loss that follows the price at a set distance when it moves your way and stays put when the price turns around.Advanced
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