The Long And Short Of Cryptocurrency Orders

The Long And Short Of Cryptocurrency Orders

Trading in cryptocurrency is becoming more popular every day. Even celebrities have shown a keen interest in cryptocurrency these days. Some political leaders have even volunteered to take a part of their salary in cryptocurrency as well. However, just because your neighbour or colleague is doing it, doesn’t mean you should jump into it without properly understanding things about it. The world of cryptocurrency contains a lot of terms that need to be understood before you can start trading. In addition to different trade types, different order types offered in trading also affect the further movement of the market. Order types on cryptocurrency exchanges are designed in a way that every investor can use. In this post, we will take a closer look at the terms associated with orders in cryptocurrency trading. Let’s get started.

Cryptocurrency Orders 101

What are crypto exchanges?

Exchanges are used by traders to own Bitcoin or any altcoin. Exchanges are areas where crypto money transfers can be made in addition to buying and selling transactions. For example, if you have a payment to be made abroad, you can transfer money with very low commission fees on cryptocurrency exchanges without being exposed to the commissions of banks. You can use crypto genisus to make some money in the world of crypto. Developing the advantages offered by the exchanges for users day by day also affects the increase in usage rates.

What are the order types in crypto exchanges?

Cryptocurrencies do not have a fixed value. To put it more clearly, each investor determines the value of his own cryptocurrency. For example, while the instant price of your Bitcoin is 58,000 USD, you can put it on sale for 100,000 USD. So you don’t have to buy or sell at that particular instant price. This is actually the advantage that stock markets offer to investors. In other words, you cannot go to an exchange office and sell at the current price, but you can sell it at any price by placing long-term orders on cryptocurrency exchanges. Order types offered in crypto money exchanges like this one are presented with different features in order to meet the expectations of investors. So, what are the order types in cryptocurrency exchanges, how do they work?

Market Price

The most common order type on cryptocurrency exchanges is the market price. The market price is the name given to the formation of cryptocurrencies according to the balance of supply and demand. The latest price realized in the market is called the market price.

Market Order

A market order is a name given to buying or selling cryptocurrencies at the current best price. When trading with a market order, it is not necessary to enter a buy or sell price. In an urgent need for money or when you think that the market is falling or on the contrary, it is called instant selling at the highest price or buying at the lowest price without specifying any price.

Limit Order

A limit order, which is one of the order types frequently used by crypto money investors, is called as the investor to sell the crypto money in his hand at the price he wants or to buy it at the price he wants. However, it is important to enter the prices correctly when doing this. For example, when you enter a buy or sell order at a price that is not in the market, the transaction cannot be executed because there will be no buyer.

Market Maker

A market maker is an order type that creates prices by placing a buy-sell order, thus keeping the market liquid.

Market Taker

A market taker is called fulfilling buy-sell orders. A lot of crypto investors do this to keep the market liquid.

Stop Order

The type of order that crypto money investors use when they cannot follow the market is the stop order type. This order type can be used for both buying and selling. For example, you can minimize your loss by placing a sell order after a cryptocurrency you bought at night falls to a level you set against the possibility of falling, or on the contrary, you can order your crypto money to be sold when it rises to the price you expect.

The order types used in cryptocurrency exchanges are generally as above. Some of these orders can also be used in future transactions, while others are only allowed to be used in the spot market depending on the exchange platforms.

What are long and short positions in crypto?

Long and short positions are not just terms used in the cryptocurrency market. It is also a term used in forex trading. So, what is the difference between normal trading and long-short positions?

New developments in the crypto money market are not limited to the introduction of new altcoins. At the same time, different options are starting to be used in the trade model. One of them is the “leveraged trades” that are frequently heard in the Forex market. Leveraged trades, in its shortest and simplest form, mean opening trades up to 10 times, or 125 times, depending on the platform’s permission, against a $100 capital. So with a capital of $100, you can open trade of $1000. Of course, it is necessary to be aware that this involves very high risk. The long and short position is also here.

For example, you heard Elon Musk raving about DOGE coin. He said that DOGE coin is a much better crypto coin when it comes to the daily transactions number. Here’s what he said in an interview with TIME magazine: “The transaction value of Bitcoin is low and the cost per transaction is high. At least at a space level, it is suitable as a store of value. But fundamentally, Bitcoin is not a good substitute for transactional currency. The total transaction flow that you do with Dogecoin is transactions per day has much higher potential than Bitcoin.”

So you heard that, got excited, and went on to do a DOGE coin chart review. You also examined the positive news circulating in the market. You no longer worry that DOGE Coin will rise. In this case, you need to open a long position in futures. In other words, in simpler terms, it is called giving a buy order for the coin that you are sure will rise.

On the contrary, you expect DOGE Coin to fall at a time when the market is very passive and the news is constantly negative. In this case, you enter a short position by entering leveraged transactions or futures transactions, that is, a sell position in Turkish.

How Long and Short orders work?

How the long and short position, which is one of the transactions that can be made in the crypto money market, works, is one of the most curious subjects of novice investors. As we mentioned above, since futures transactions have a very high risk, if you do not have enough basic and technical analysis knowledge, we definitely recommend that you do not open futures transactions, then let’s move on to how long and short positions work.

The biggest difference between futures and spot transactions is that they make profits both while falling and rising. As we said in the example we gave above, you can place both a buy order and a sell order in this type of order. In the spot market, if you have a coin, you can place a sell order, if you do not have a coin, you can place a buy order. But in futures, you can do both.

If you dominate the market and trust your charts, you can open futures after analyzing a coin X. For X coin, which is $ 10, placing a long order at this level means that you think that X coin will increase even more in the coming hours. If your analysis is working correctly, the price of the coin will increase and you will make money as the price of the coin rises.

On the contrary, if you think that the peak price for X coin has come and you think that the prices will go down after this point, you will open a short position in futures and you will make money as the prices continue to fall.

Are Long and Short Transactions Risky?

To put it bluntly, if you are new to the cryptocurrency market, do not enter long and short positions. Because the higher your leverage level, the higher your loss will be. In other words, it would not be right for you to act by leaving your job to chance.

If you can analyze professionally and have enough capital, the best thing to do to minimize risk is to make long short transactions with low balances. In this way, you can both analyze your risk and ensure that your loss is less, and even if the money you invest is lost, you will not stress yourself enough to get depressed. Just like every other kind of investment, it’s always best to exercise caution and restraint when it comes to investing in crypto as well. 

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