How to place an order on an exchange
After you have purchased some Bitcoin or Ethereum, you might want to delve into the world of altcoins. Most cryptocurrencies cannot be purchased with fiat money like the US dollar, but you can use exchanges to trade your Bitcoin or Ethereum for other coins.
The screenshots and corresponding explanations in this article are from a popular exchange called Bittrex. However, you will find that there are many exchanges, but most of them have a very similar interface. This guide explains how to use these exchanges. In this example, you’ll see markets for BTC/ETH pairs, which is shorthand for trading between Bitcoin and Ethereum.
In this example process we will use Bitcoin as the base currency you are trading with, but keep in mind that most exchanges will have Ethereum trading pairs as well. Also, the numbers you will see in parentheses throughout this article refer to the numbered images, which will help to illustrate this process.
First, you will need to open an account on the exchange that trades your desired currency. To find these, go to Coinmarketcap.com, click your coin’s name and then the Markets tab; you will then see a list of exchanges and trading pairs available.
You can also check out our quick guide on how to choose a cryptocurrency exchange.
After you have set up your new account, create a wallet on that exchange in the Deposit section. Transfer Bitcoin from your current wallet to this new wallet so that it is accessible for your trade.
Now you are ready to buy some coins!!
Name of coin. This will be the name of the coin or cryptocurrency, followed by its ticker symbol in parentheses.
Last. This is the last trade price that this coin was traded for. In this case, Ethereum traded for 0.0367597 Bitcoin. This is updated in real time on the exchanges.
Market Volume. This is the market volume of this cryptocurrency on this exchange. The unit is in Bitcoins. In this example, there have been 4734.5749 Bitcoins traded in this specific BTC/ETH market over the past 24 hours.
Bid (Buy). Bid is the highest current “buy” order on the order books. It is the highest price someone in the market is currently willing to buy Ethereum for.
Ask (Sell). Ask is the lowest current “sell” order made on the order books. It is the lowest price someone in the market is currently willing to sell Ethereum for.
24 Hour High and 24 Hour Low. These numbers display the highest and lowest prices this cryptocurrency traded for in the last 24 hours. Cryptocurrency markets are 24/7, so this number is always live-updating.
How To Place Bid (Buy) and Ask (Sell) Orders
To buy a cryptocurrency, Ethereum with Bitcoin in our example, you will designate the amount of ETH you want to buy, and the price in BTC you’re willing to buy it at. Once placed, it is sent to the order books (12) where it will stay until the order is fulfilled or you decide to cancel.
Selling coins is a very similar process. You enter the amount of ETH you want to sell and the price of BTC you are willing to accept them each for. This order will also get placed in the order books (12) where it will stay until the order is fulfilled, or canceled.
Bonus: Conditional Orders
For more advanced traders, or traders who have their own risk management strategies, you may want to set up conditional orders. These are orders that are executed if specific criteria are met.
You can use the “Greater Than or Equal To” condition to automatically sell after your coin has reached a certain price. This holds your order off of the books until the sell price is reached, at which time it is posted. The opposite of this is the “Less Than Or Equal To” condition, which help minimize risk. This function will automatically sell the coin in the case it drops below your designated price.
When buying or selling coins that are only available to trade against another cryptocurrency, like Bitcoin, but not fiat like USD, remember that you are not able to set future price orders based on USD. For example, you could not sell an altcoin with the following order: “Sell when Bitcoin is worth $XYZ.” You can, however, set the condition “Sell when my altcoin is worth .5 Bitcoins.” This makes altcoin trading slightly more advanced. If you want to buy or sell based on profit or loss in USD, you will need to track prices and execute the sale manually.
Bids and Asks placed by traders are put into the order books, where they stay until they are fulfilled or canceled. On the Bids, or buy, side the highest bidder will be shown. You will be able to see the units of cryptocurrency (in this case ETH) and the price they would like to buy it for. The Asks, or sell, side is similar, with the lowest price being shown. You will be able to see the units of ETH they would like to sell and the price in BTC being asked.
Another representation of the order book is the Depth Chart:
This chart helps to visualize the volume on the order book (12) and see if it is weighted to the Bid (buy) or Ask (sell) side. You can see the volume of traders placing bids or buying at various prices, as well as traders placing asks or selling.
A significant vertical difference on either side could signify a “buy wall” or “sell wall.” In this example, there is quite a huge buy wall in relation to the sell or ask side. This means that many more people are trying to buy than sell.
Keep in mind, however, you can place orders and remove them at any time with no repercussion, so some of these walls and orders could be intentional market manipulation by bots and traders with lots of cryptocurrencies (known in the crypto world as whales).
Market (Trade) History
This is where buy or sell orders are recorded once they are executed, and filled. The most recent is listed at the top.
This article was written to the best of our knowledge with the information available to us. We do not guarantee that every bit of information is completely accurate or up-to-date. Please use this information as a complement to your own research. Nothing we write in any of our articles is intended as investment advice nor as an endorsement to buy/sell/hold anything. Cryptocurrency investments are inherently risky so you should never invest more than you can afford to lose.