Trailing Orders, Take Profit, Stop Orders, Fill or Kill etc.
The most common order types in trading are market and limit orders that let users buy and sell bitcoins at a given price (market price or limit price). Another very important basic order type is the stopp loss order which helps traders to protect their capital from higher losses when price suddenly falls. However, many Bitcoin Brokers different order types are what set one broker apart from another in order to understand this you need to understand the different order types when trading bitcoin. Bitcoin trading sites allow you to execute advanced orders in addition to just buying and selling bitcoins.
There are several advanced order types, some of the most popular ones are available at couple of top bitcoin brokers.
Besides market and limit order, the third most common order type is Stop, which are executed only if the specified stop level has been reached, in this case the order is turning into a market or limit order.
Advanced orders are a combination of conditional orders and these three basic order types.
Couple of stop orders exist based on what happens when the stop level is reached by the market price.
Stop limit buy order
is the combination of stop and limit order. As soon as the price reached the stop level, the order becomes a limit order that is executed at a given price or better.
Stop loss take profit order
is a combined order that is executed if the stop level or a certain profit level has been reached.
Stop loss take profit limit order
is similar to the aforementioned, the difference is that the limit part makes sure the order is executed at a given price or better.
Trailing stop buy/sell order
is similar to a Stop Market order, but here you set a trailing value that moves with the market and continually recalculates the stop trigger that can be used to place the market order.
Trailing stop limit buy/sell order
is continually recalculating the stop level based on the limit.
In case you want to make sure once a certain level is reached on the market, you take the profit, the take profit orders helps to stick to the investment plan without the need to monitor the market 24/7.
Take profit order
can be used similarly to a Stop-Loss order to set a market price make sure the profit is locked.
Take profit limit order
can be used similarly to a Stop-Loss order to set a target price on a position to lock in profit.
Additional advanced order settings
include further conditions to be met upon execution or address the privacy of the order book
Fill or Kill
order is a limit order that must be filled immediately in its entirety or it is canceled (killed)
One cancels other (OCO)
order option is a conditional order that allows you to place a pair of orders of which if one order is executed fully or partially, then the other is automatically canceled.
ensures an order does not appear in the order book; therefor it is not influencing the market.
Post-only limit order
ensures the limit order will be added to the order book and not match with a pre-existing order.
Certain advanced order types are suitable for high volume traders:
Scaled order includes multiple smaller order packages for high volume orders to avoid flooding the market and disguise large scale trades.
Iceberg orders allow traders to move into and out of large positions without making a large impact on the market.
Time-Weighted Average Price (TWAP) orders allow highvolume traders to execute orders over a specific time period, with the intention of keeping the price close to the prevailing market price.
Advantages of Advanced Orders
Advanced orders help managing risk while allowing certain amount of flexibility in trading assets without the need to monitor the market 24 hours a day. You can set specific prices to get into the market, minimize possible losses while maximizing possible profits, without worrying too much for your open trades.
Caution with Advanced Orders
You need to have an understanding of the Bitcoin Brokers different order types and advanced trading order, what are the benefits and what are the limitations of these orders before executing a trade. Make sure you check the broker’s terms and conditions before engaging into trading activity so you are understanding how the trades are executed.