How to Choose Cryptocurrency Exchange. Types of Orders

| Updated on March 26, 2024

The trend of cryptocurrencies is on boom nowadays. These digital currencies are gaining popularity in such a short time period. The transactions have already started taking place on some platforms. A popular example of a market where cryptocurrencies are celebrated on large scale can be the NFT marketplace. 

Cryptocurrencies play a salient role in the sale and purchase of NFTs. Another way in which these coins can be used is through investment. Yes, you can invest in these currencies, and as the value of the currency fluctuates, your money would also get multiplied or dwindle according to the performance of the currency. 

And if you have made up your mind to trade cryptocurrencies, you will be needing a marketplace (also known as a cryptocurrency exchange). Choosing the right cryptocurrency exchange is a pivotal decision. It can have a significant impact on the security and ease of use of your cryptocurrency investments. Some key factors to consider (when choosing an exchange):

Reputation and Security: 

It is important to look for an exchange with a good reputation and a strong positive track record of security. Look forward to reviews, user feedback, and news reports to get an idea of the exchange’s reputation. Look for exchanges that have strong security measures, such as two-factor authentication, cold storage of funds, and regular security audits.

Supported Cryptocurrencies: 

Different exchanges support different cryptocurrencies of their choice. Make sure the exchange you decide to go forward with is listed the cryptocurrencies you want to trade in. Be careful with the token standards, because your digital assets may get vanished if you send them to the wrong address. For example, tether has few standards: exchange usdt erc20 to trc20 makes your assets using the TRX blockchain. 


Exchange platforms are not free to use. They may look free but indeed they charge fees for trades and withdrawals. Compare fees across different exchanges to find one that offers competitive rates.

User Interface: 

Prioritize an exchange with a user-friendly interface so that you don’t need a separate guide to learn about the platform. This can make the process easier to buy and sell cryptocurrencies, manage your account, and monitor your investments.

Customer Support: 

You never know when the times may get wrong. And it may get worse if money is involved. We advise you to not take a risk with your hard-earned money and look for an exchange with good customer support that can assist you with any issues or questions you may have.

It’s important to do your research and carefully evaluate the options before you plump for a cryptocurrency exchange. In the undermentioned guide, we’ll look at the different types of orders that are available on cryptocurrency exchanges. With this knowledge, you’ll be able to make informed decisions about which order type is best for your needs.

Limit Order

A limit order means the sale or purchase of a security at a specific price. For instance, you place a buy-limit order. It means that you want to be able to purchase the cryptocurrency at the specified price or lower. Or you place a sell limit order – it means that you want to sell your holdings at no less than the specified price.

A limit order guarantees that the trade will be executed at the specified price or better, but not necessarily immediately – it could take some time for this type of transaction to occur depending on market conditions and other factors (more on those later).

Stop Loss Orders

Stop-loss orders are used to limit your losses and protect your investment. These orders can be proved as one of the most valuable features.

Stop-loss orders can be used to protect against sudden price drops, or they can simply be set with a certain amount that the trader is willing to lose before exiting an investment. The latter is often referred to as “cutting losses”. 

Let us understand this with a case study, suppose you have invested $10,000 in Bitcoin, and there’s no sign of recovery after six months of holding onto it (and especially if other coins have been doing better), then you could consider setting a stop loss order at $9000 so that if things get worse than expected and BTC falls below $9000 then it will automatically sell off all remaining holdings at market price without having any further control over it. 

When this happens or how much gets sold off each time – this way you only take what’s left over from selling all those bitcoins instead of potentially losing out on even more money by trying desperately not to sell too early or too late (which could happen either because someone else has placed their own stop losses earlier than yours did). Stablecoin swaps:

Stop Limit Orders

Stop limit orders protects profits and avoid slippage. A stop limit order is an order to buy or sell a security at a framed price, which activates only when the market reaches a specific trigger point. 

This order type can be very useful in volatile or fluctuating markets where you want to enter or exit positions at some specific prices, but keep one thing in mind doing so may cause slippage if there are no trades available at those prices.

Stop-limit orders (also known as stop-losses) are designed to limit losses on open positions by closing them out when they reach certain predetermined levels – usually defined as either percentage declines from entry price or dollar amounts lost relative to entry price. They’re commonly used in trading strategies involving long/short positions where traders seek high reward potential but also want protection against large drawdowns associated with short-selling strategies such as naked puts or calls

Trailing Stop Order

A trailing stop order is an order to buy or sell a stock that trails the price. A trailing stop-loss order is a type of stop-loss order, which protects profits and on the other hand, allow the stock to continue to move in a favorable direction.

Trailing stops are very useful when you want to protect profits on long positions, but don’t want to cut your losses short too quickly and lock in losses prematurely (which can happen if you use fixed-limit orders). In this way, it gives you more control over your investment decisions than other types of orders such as market or limit orders because they do not allow for any flexibility at all when setting risk levels for each trade based on its current market value instead of where you think it might go next based on expectations about future performance.

A good example of a market order is if you want to buy Bitcoin. You’ll put in your order and then pay the current price. So if Bitcoin is $5,000 and you’re buying 2 BTC, that only is what you will pay.

Final Words

In the trading world, risk is involved at almost every stage. You have to watch your steps closely before investing. As discussed in today’s article, there are multiple options to trade cryptocurrencies. these methods are called “orders”.

Each type of order has its own advantages and disadvantages, and traders should choose the type that best suits their trading strategy and risk tolerance. It’s important to understand the different order types and how they work before placing any trades on a cryptocurrency exchange.

John M. Flood

John is a crypto enthusiast, Fintech writer, and stock trader. His writings provide guides to perform your best in the crypto world and stock planet. He is a B-Tech graduate from Stanford University and also holds a certification in creative writing. John also has 5 years of experience in exploring and understanding better about the FinTech industry. Over time, he gained experience and expertise by implementing his customized strategies to play in the crypto market.

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