Understanding market order in Cryptocurrency Exchange

One of the most important factor of Cryptocurrency Exchange is the order type- this will explain how the buy and sell orders will be processed. The most common type of orders found are Market Order, limit order, Stop order, market making and more. In these, the most common one is the market order. Now, lets comprehend about Market order.

Market order: Meaning and working principle A trade order where the buy and sell market order is automatically filled up at the current market price. The quantity of the order will be under major consideration rather than the price. But there will be a difference between the expected price and the filled price.

It usually functions based on the market ask price which is subject to constant variation and assures that there won’t be effective loss. The market order in widely used in trading strategy and is now considered a major feature in white label exchange software.


Working principle:
When a market order is placed on an exchange platform, the trader instantly accepts the price offered by the seller. This situation may turn out advantageous or worse for the buyers. Market orders are generally appropriate for those businesses who wish to transact their business at the earliest. The profit through this trading strategy depends on how well a trader analyzes the market patterns and uses them.

There are numerous situations when an individual can make use of market order while cryptocurrency trading. It works on an immediate basis and eliminates the major loss foreseen by the traders. At times, traders also get into the trading before anyone else because they forecast a huge potential in the stock or asset. These are done instantly because the losses or gains which are expected through trading are much higher than the premium rate paid to execute the trade.
It is also advised that while placing a market order on an exchange, the traders should consider the trades in the order book and calculate the approximate value of the currency to be traded. This would ensure that the traders pay a desired amount of money to the counterparty.

While finalizing the trade, you should also consider that once you have placed a market order it is impossible to cancel it as the trade is settled instantly in the exchange software. If you further go beyond selling your coins or buyback then you may suffer huge transaction loss. So, therefore, you should properly optimize your actions before finally placing an order.

Benefits of market order in crypto exchanges

  • Real-time business transaction
  • Increased operating speed
  • Attract more traders

If you are indeed looking forward to launch a cryptocurrency exchange, then Pulsehyip can help you with the processes for building a standard exchange platform. Fill up the below enquiry form to reach us.   

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