How to Place Orders On Exchanges

 

Welcome to the Trading Block!

This series will be an introductory course into Technical Analysis(T.A), the science traders use to predict market movement. This series will offer basic T.A. strategies to get you started. But first, let’s prepare by going over how to place orders on exchanges.

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Above is a screenshot of GDAX, the exchange Coinbase offers for more experienced traders. Each exchange will have a different UI, however they all follow the same basic principles:

1. List of Sell Orders

2. List of Buy Orders. 1 and 2 is considered the “Order Book”

3. Where you place your orders

4. A graph and history of price points

Types of Orders You Can Place

1. Market Buy/Sell Order- This is when you place an order that already exists on the order book. Most exchanges will charge you a fee to do this. The advantage of this is that you are guaranteed to buy your coins. On GDAX, you will need to do this using the “Market” tab under #3. You will have to manually input the order on other exchanges.

2. Limit Buy/Sell Orders- This is when you place an order on the order book that doesn’t create a transaction. It is a cheaper way to buy, but you also run the risk of not hitting your order. In the order book above, the list of Sell Orders ends at $46.84. To place a Limit Sell Order, you must place it at $46.84 or any price above that. If you want to place a Limit Buy Order, you must place it at $46.83 or below. On GDAX, you incur zero fees to do this. Other exchanges will charge you, but less than the fee associated with Market Orders

 
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3. Stop Buy/Sell Orders- These orders are when you think the market is going up/down but you’re not sure. If it’s going down, you place a Limit Buy Order like normal and hope it hits. You then also place a Stop Order meaning if the price rises above a certain point, the exchange will buy it for you. You do a similar process if you want to place a Stop Sell Order. You place a sell above market price and hope it hits. You also place one below market price just in case the market moves the opposite direction. This way you don’t have to watch the market 24/7.

 
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