In this tutorial, you will learn about the difference between a market order and a limit order.
When placing an order to buy or sell a cryptocurrency on AAX, you can select between two main execution options; market order or limit order.
What is a Market Order?
A market order is an order type used to buy or sell quickly at the current market price. These orders are the most basic form of orders on any exchange.
A market order needs liquidity to be filled and executes immediately based on the current market price and existing orders on the order book.
When you place a market order, you pay the fees of a market taker.
How to use market orders on AAX
For instance, if you want to create a market order to buy 50 AAB, you will need to log in to your AAX account. Select the AAB market you want to trade (eg. AAB/USDT).
On the trading page, find the market order tab and enter the amount of AAB you want to purchase or sell. (In this case, it is 50 AAB). Click the ‘Buy AAB’ button to complete your market order.
Your order will be immediately filled based on the current market price, and the coins will be added to your balance.
When should you use a market order?
In short, market orders should be used when you are in a hurry. It is useful when you are more focused on getting your order filled promptly than getting the best price in a trade.
Also, placing a market order usually results in paying a higher price and fee.
What is a Limit Order?
A limit order is an order type that you place on the order book with a specific price you have in mind. It is designed to give traders more control over their trades. A trade will only be executed if the market price reaches your limit price set in your limit order.
Limit orders allow you to buy at a lower price or to sell at a higher price than the current market price.
How to use limits orders on AAX
For example, if you want to create a limit order to sell 40 AAB, you will need to log in to your AAX account. Select the AAB market you want to trade (eg. AAB/USDT).
Find the limit order tab on the trading page, enter the price you want to sell at, the amount you want to sell, and click the ‘Sell AAB’ button.
You can also set the amount by clicking the percentage buttons. You can simply place a limit order for 25%, 50%, 75%, or 100% of your balance.
What’s more, you can check and manage your open orders in the bottom left half of your trading screen.
When should you use a limit order?
In short, limit orders should be used when you are not in a hurry and want to have control over the price you trade at. Limit orders allow you to sell or buy at major resistance levels, which could give you better results.
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