What are the order forms (Order Form)?

Carrying out buy or sell operations on a trading platform (exchange) can seem difficult until we get to know the order forms, the powerful tool created for this task and which we will meet next.

LAnother of the elements that we can find in a exchange when performing an operation is the known order form. This tool allows us to create a purchase or sale order for the cryptocurrency that we are exchanging. Thanks to this, it is possible to enter our orders on the exchange, participate in the market and enjoy the platform we use.

Each of the orders that we create with this tool will be listed in the order book of the exchange. So knowing this tool and its elements is of vital importance for a trader.

That is why, we will dedicate the following space to explain its most basic elements, its role and importance for traders. A knowledge that will be of great help to you when starting to trade on any exchange that allows you to make trades.

How does an order form work?

The operation of an order form is quite simple. His work consists of serving as an interface between the trader and the exchange. In this way, the order form allows the trader to make the purchase or sale order of cryptocurrencies that he needs to participate in the market. Without a doubt, it is a vitally important tool to sustain market dynamics.

Of course, order forms can vary in number of options depending on the platforms. Each of the exchanges may present more or less advanced options in order to help the trader in his work.

Elements of an order form

The elements that make up an order form can vary greatly in organization and options depending on the exchange platform where it operates. However, there are a series of clearly identifiable basic and common elements, which are:

Market order

This section of the order form will allow you to create a special order called market order. These orders they are considered the most basic of any exchange. Thanks to her a trader can buy or sell a certain amount of assets at the moment using the market price. Thus, orders generated in this way they run as fast as possible. In addition to their speed, another advantage of market orders is that they have lower commissions than other options.

Limit order

This is another basic element within an order form. A limit order is a special order where the trader buys or sells an asset as long as conditions are met.

These types of orders usually prevent you from losing all your money, as they are known as a safety net that helps you measure risk. In other words, thanks to these orders, the trader is able to choose a target price to carry out his operations, seeking to maximize profits or minimize losses.

However, the main disadvantage of such orders is that they may never be fulfilled or carried out. This happens when the limit given by the trader is never met. For example, a trader can execute a limit order to buy assets when their value does not exceed $ 100 per unit. That way, the order will only be carried out if someone offers the asset below that price. However, if no one offers the asset below price, the order will never be executed and the trader will not get the assets they are looking for.

As you can see, these types of orders are very useful to buy or sell in price ranges that the trader sees as beneficial.

Hidden Order

Sometimes traders may have a desire to perform certain trades with a certain degree of anonymity. To achieve this, exchanges have created what we call the hidden order u hidden order.

These orders can be executed from the order forms using the option «Hide»Or«Hidden" if available. In this way, the orders generated by the trader will be made anonymously. As a result, your order is shipped but the evidence of the order is hidden from the marketplace.

Stop order

Una arrest warrant u stop orders It is another of the elements that we can commonly find in the order forms of an exchange. These types of orders are not available on decentralized platforms. They are used to create a purchase or sale order that is activated in compliance with a condition, in this case for a certain price called a stop.

In a purchase order, the stop order is activated when the value of the asset increases until reaching the specified priceor. On the contrary, in a sales order, it is activated when the market falls and the price of the asset falls below the specified price.

Often, this type of order can have a “limit” parameter that allows you to determine up to what price you are willing to buy/sell after the execution of the stop.

These types of orders are used to avoid losses within the markets, or conversely, to start buying quickly in the event that the market begins to rise.

Importance of order forms

After examining some of the basic elements that are usually part of a form, we can understand their importance. The reality is that lThe order forms facilitate the trader to carry out purchase or sale actions within the exchange. This thanks to the fact that gives the trader tools that provide great flexibility to his operations.

This is because gives the ability to decide the price margins to act during a purchase or sale of assets. In this way, the order form and its various options become a very powerful tool. For example, a good trader who uses the tools of technical analysis y fundamental analysis You can obtain vital information from a market, which accompanied by these types of options would allow you to maximize your profits and reduce the risk of loss.