If you want to make money from crypto, you need to know how to trade cryptocurrencies. And the first step is familiarizing yourself with the basics like different types of buy and sell orders and how to use them, just the topic we’re going to cover here. So if you’re a beginner to the world of crypto trading or even trading in general, this guide will help you get started.
How to use kucoin for trading cryptocurrencies
If you’re new in the world of cryptocurrencies and want to start buying and selling them, one of the good options is kucoin’s exchange platform. The other is binance. (To see a comparison between these two exchanges, see our crypto buying guide.)
In this post, we’re going to use kucoin.
Spot trading on kucoin
After signing up for an account, go to your security settings. Here, you’ll have access to some options to secure your account a bit more than the usual. Scroll down and click on “trading password”, then choose a 6-digit password.
After setting your trading password, which is separate from your login password, go to “spot trading”. You can find it at the top left of your screen, under “trade”. After you click, it’ll open the bitcoin trading page for you by default.
Now, at the top left of your screen, you’ll see bitcoin’s logo and trading pair “BTC/USDT”. Click on it and you can open any trading pair you like. You can have up to 8 pairs open at the same time on different tabs. And when you choose a pair, you’ll see its chart with many features and technical indicators.
Now at the bottom right, put in your trading password. Then you’ll see something like the image below. If you don’t have a trading password yet, the platform will ask you to choose one. Without it, you can’t start trading.
As you can see, you can do margin trading from this page too. But for now, let’s stick to spot.
Different types of order when trading crypto
You can use three kind of orders to buy or sell any cryptocurrency:
1. Market order: When you place a market order, the exchange (or broker) will buy or sell your intended asset at the best price available. This type of order will usually get filled instantly.
2. Limit order: You determine the exact price that you want to buy or sell the intended asset. When the market reaches your limit price, your order will get filled at that exact price or better. Limit orders can get filled partially if the amount you want to buy or sell doesn’t become available.
3. Stop order: You can have two types of stop order: stop market and stop limit. In this type of order, you determine a stop price. In stop market orders, when the price of the asset reaches your stop, a market order gets executed. In stop limit orders, when the price reaches your stop, a limit order gets on the order book. So in stop limit orders, you will have to set one stop price and one limit price which can be different from each other.
What’s the order book?
Each exchange has its own order book. It’s a list of all the limit orders from everyone trading on that exchange plus a history of every trade, regardless of the type of order. It usually has three main sections: one for the sell orders, one for the buy orders and one for the history of trades. Buy and sell lists are organized by their price, trading history appears in order of time, from the most recent trade to the older ones.
Order book can be used in technical analysis if you know what you’re doing. But even if you don’t want to dive deep into it, you can at least guess what price you’ll get if you place a market order or look for the levels of interest to buy or sell at different prices. This can help you understand price movement a bit better.
On kucoin, you can see the live and ever-changing order book for any trading pair in the right part of the spot trading page.
What are the differences between market, limit and stop orders?
- Limit orders are on the order book and everyone can see them. But stop orders are not on the order book and only you and your broker are aware of their existence. Stop limit orders turn to limit orders and get on the order book once the stop price is reached.
- Stop market orders can remove the chance of partial filling and work similar to limit orders. But the final price of your trade may be worse than your stop (higher in buy orders and lower in sell orders). Limit orders will get filled at the exact price you’ve set or better.
- In most exchanges that have stop market and stop limit orders, you can place more than one stop order on any of your assets. This is not possible with limit orders.
Some other things you should know before you begin trading crypto
- If you’re new to trading in general, you should know that in a pair like “BTC/USDT”, when you buy, you pay usdt and get btc and when you sell, you pay btc and get usdt. Just so you know how a trading pair works. BTC is the ticker for bitcoin and usdt is the ticker for us dollar tether.
- You can use stop market orders to place take profit and stop loss orders on your trades to control your risk when trading spot. Although some exchanges will have these specific types of orders as well.
- I didn’t go into futures trading and margin trading because the level of risk in spot trading is the lowest and this makes it the ideal start for beginners. Don’t use leverage of any kind if you’re new to crypto trading and don’t really know what you’re doing.
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How did you start trading cryptocurrencies? Comment below with your stories.
***Last Updated on 21 March 2022 by Hamed Derakhshani (Guy with a Wallet)