- There are two types of tactics used in Short term trading.
- Market order occurs when buying or selling activities gets executed automatically at the current market price.
- Due to the impact of external forces, there may be a slight difference between the expected price and the filled price.
As investment in cryptocurrency breaks new records every day, the demand for robust exchange software becomes an absolute necessity.
The speed at which orders are processed has become a yardstick for judging the efficiency of a Cryptocurrency exchange software. There are various types of orders used by traders in their daily operations. The most common types are market order, limit order, stop order, etc. A market order is frequently utilized for handling funds.
Before getting into the intricacies of a market order, let us understand the fundamentals of trading.
Trading Strategies utilized in Cryptocurrency exchange software
- Short term trading – Traders enter into and exit from a contract within a few days or weeks. This type of trading is ideal as parties can analyze the risk beforehand by closely monitoring the movement in the prices of cryptocurrencies.
There are two types of tactics used in Short term trading. They are classified into two types, Daily Support and Hammer Pattern strategy.
- Daily Support – Short term trading is done through technical analysis, where charts and graphs are used to understand patterns and trends. The future price of assets is determined on the extent of trading activities and variation in prices of cryptocurrencies. Traders look to avoid losses and aim to earn a small profit.
- Hammer Pattern strategy – This technique involves traders undertaking research about the price direction and previous price movements of different digital assets. Decisions would be taken based on the extent of fluctuation in price. It is also called a pullback trading strategy as funds may be withdrawn from the investment if there is an unfavorable movement in price. Traders would predict that once price reduces to a minimum level, it will rise back to a high. Recovery of the market is dependent on the quickness with which the price rebounds.
- Long term trading – Traders park their funds for a few months or years. It focuses more on future market conditions disregarding the currency scenario. More profit can be earned by investing the dividend back in the market.
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Getting to know how Market order operates
Market order occurs when buying or selling activities gets executed automatically at the current market price. Traders analyze the quantity of trading than focussing on the price. Due to the impact of external forces, there may be a slight difference between the expected price and the filled price. Traders increasingly use market order in White label Cryptocurrency exchange software since it guarantees a no-loss situation. The earnings would depend on the constant variation in the market ask price. The best ask price would be the highest price while the lowest price would be the bid price. Traders pay the highest price when they buy a stock and receive the lowest price when they attempt to sell a stock.
The functioning of a Market order
- Whenever market orders get placed on an exchange platform, the trader immediately accepts the price quoted by the seller.
- The focus is more on speedy processing of orders for traders to experience a quicker advantage.
- Market orders are more suitable for enterprises who wish to execute transactions for their business at the earliest.
- Maximum profits can be earned by a trader depending on how he analyzes the market patterns.
Advantages of a Market order in Cryptocurrency exchange software
- Since it can be finished off immediately, it eliminates the expectations of a loss foreseen by traders.
- Parties who select the market order option would have a first-mover advantage as they can get their preferred choice of the asset at any time and understand the huge potential that lies behind it.
- The urgency in the execution of trade is noticeable since the premium paid to process it would be higher than the expected losses or gains.
- There is a greater chance of fulfilling the order which enhances the trading experience.
- Traders can increase their exposure by investing in a larger amount of shares without getting affected by the corresponding risk.
- Orders are executed on a real-time basis without delays, saving costs for the traders.
- Due to the higher speed of transactions, traders would benefit immediately from the bullish market conditions.
- Due to the efficiency and popularity of market order, more traders would be tempted to use it and get the best price in the market during buying and selling.
- Traders who are stuck in a wrong investment and incurring huge losses can opt for market order by buying assets at the current price.
- Market orders are suitable for trading in highly liquid stocks with a narrow bid-ask spread.
Tactics to maximize gains by using Market order
- Traders should analyze their position in the market by having a glance at their order book.
- They must estimate the value of the currency to be traded for paying the appropriate amount of money to the counterparty.
- Traders must decide before choosing a market order as it is not possible to cancel once the trade has been executed in the Cryptocurrency Exchange software.
- Losses may be incurred if the traders select a sudden buyback option or opt to sell their coins.
The proliferation of Cryptocurrency exchange software has changed the dynamics of financial markets and also has a deep impact on the functioning of other industries. With more emphasis on efficiency and speediness of processing orders, traders can brighten their prospects by operating a Cryptocurrency exchange software.