Users are not ready to refuse simple and understandable orders
Exchanges must implement stop and trailing orders
The more trading instruments the exchange offers, the more often traders choose it.
International consortium of news organizations developing transparency standards.
Complex trading orders and their use is one of the most pressing topics for any trader. Professionals have probably already been familiar with this phenomenon for a long time, and beginners who are just starting to build their trading strategy are often not familiar with many nuances of the decision-making algorithm in modern trading. BeInCrypto spoke with the CEO of KickEX Anti Danilevsky about the company’s latest research on this burning topic, as well as about new products of complex orders, the popularity of each of them and the main preferences of traders.
– Why do you think that the study of complex trading instruments is interesting and relevant for the market?
HELL .: The relevance of the study is due to the fact that more and more traders, both on classical and cryptocurrency exchanges, are developing their trading strategies using complex trading tools. The percentage of use of simple and complex orders by traders is interesting, as well as their relation to the complexity of mastering exchange functions and the effect of order types on profit.
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– Who took part in the study?
HELL .: The study involved 1,716 respondents from more than 100 countries. The most active users were from the USA, Russia, India and Indonesia. Most of the participants are users who trade cryptoassets on crypto exchanges. Most of the respondents trade every day, and every second respondent spends more than an hour on it.
– Tell us more about the main types of existing orders.
HELL .: Market Order, MKT – This order is executed at the current price (CP) that is in effect on the market when the order is placed. As a result, the order is executed almost immediately.
Limit Order, LMT – using this order, you specify the maximum price at which you are willing to buy, or the minimum price at which you are willing to sell the selected asset. The Buy Limit order price must be lower than the market price, and the Sell One order must be higher, otherwise the order will be executed at the market price.
Stop Order, STP – The order becomes a market order as soon as the price (Stop Price) you have set is reached. Most often, a stop order is used to close a position when a certain loss or profit of an asset is reached.
Stop Loss – this order automatically closes the position as soon as the set price is reached in order to stop further losses on the asset.
Take Profit – this order is a command to close a position when a profit is reached. For example, if you place a $ 9 stop order, the asset you bought for $ 10 will be sold when the price drops to $ 9. If you place a Take Profit order at $ 11, the asset will be sold when the price reaches that level and you will correct the profit.
Stop Limit Order, STP + LMT – stop order with the function of the limit (limitation) of the execution price. If the price has reached the stop price, a stop limit is set. In this case, the limit price can either be the same or different from the stop price. Most often, this order is used to avoid sharp movements in the price of an asset..
Trailing Orders is a dynamic order that automatically moves at the market price. This order does not have a fixed price and allows you to place orders with a moving price level, which allows you to make transactions at the most favorable rate..
– What orders are most popular with traders?
HELL .: Limit orders occupy a leading position in the popularity rating. It is not surprising that the traditional and easiest-to-use exchange instruments will be actively used for a very long time. Market orders are in second place.
– How often traders use additional parameters to place orders?
HELL .: The developers are trying to make placing orders more convenient and flexible. They add functions for setting additional parameters, such as the time of order activation or cancellation, options for their full, partial and instant execution. More than 75% of respondents have the option to use additional parameters when placing orders.
– How often people use stop orders and trailing stops?
HELL .: Stop orders are often used to prevent large asset losses or to secure profits. Research shows that such methods are more than theory. They are quite popular with many traders. Among respondents familiar with stop orders, only 15% never use them. At the same time, trailing orders are not available on all crypto-exchanges. However, traders who have the skills to use them actively use them for trading..
– How often traders use complex orders or options that allow you to set up a system of several orders?
HELL .: The fact is that systems for placing multiple orders (for example, “One cancels the other”) are not available on all platforms. This feature allows you to place multiple orders at one time to quickly and conveniently create specific logic patterns for a specific asset position. This allows traders to make a profit or minimize losses and also make only one reserve for the entire order system. Traders who have access to this feature are actively using it. In addition, every third respondent uses a grid of orders, which allows setting price intervals and the number of cryptoassets on one interface. Thus, several orders are placed quickly and comfortably..
– What other orders do traders want to see??
HELL .: Study participants were asked to choose one or more options for the features they would like to see. Traders are already using many types of orders in their trading strategies. There is no need to talk about something revolutionary in this area due to the fact that almost half of the respondents experience certain difficulties in studying and understanding the basic functions and methods. This suggests that simple crypto exchange schemes will increase the flow of traders..
At the same time, the vast majority of participants consider the presence of a wide choice of functions on the exchange as one of the most important criteria..
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– What are the main conclusions you made from the research?
HELL .: Through our research, we found that the various order types and features that exchanges try to implement have a good response from traders. Moreover, they actively use various orders. However, simple order types are still used the most. For most people, having a wide range of trading functions on a cryptocurrency exchange is one of the most important criteria. In addition, in some cases, users prefer exchanges with complex orders. At the same time, despite the attractiveness of smart orders and their positive effect on profits, almost half of the respondents experience difficulties in mastering these types of orders. It follows that exchanges should be more attentive to training and interactive demonstration of smart order functionality for wider user acceptance..
– What else would you advise exchanges to attract traders?
HELL .: Obviously, in order to retain traders, exchanges should not only pay attention to technical support and convenience in working with classic orders, but also initiate the development of new instruments that meet market challenges. The new crypto exchanger KickEX demonstrates one such example of the successful implementation of complex orders. Here, advanced traders have double stop and trailing orders. In addition, the developers took care of the smart money back function – up to 100% of trading commissions, as well as an affiliate program for additional partially passive income for users. “Conservative” traders should consider introducing new complex orders into their trading strategies, which research has shown have a chance to take profits to the next level..
– Thanks for the conversation!
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