A Walkthrough Guide of Digital Assets Trading on Zipmex
June 29, 2020
Although digital assets trading is similar to other traditional trading, such as stock, the trading terms like Market Orders, Limit Orders, Bid, and Ask are undoubtedly perplexing for beginners. In this article, we will walk you through some of the terminology usually found on trading exchanges, including Zipmex. Becoming proficient in this language and mastering trading techniques will help you grow your portfolio into profit no matter what assets you are trading.
Side note: To assist Zipmex also has a library of information at your fingertips such as Trading, General FAQs, Fiat Transfer, and Account Management.
What is a Market Pair?
The trading pairs section shows the available market pairs depending on the digital assets you plan to trade.
As a digital assets trading platform, Zipmex supports fiat-to-cryptocurrency trading pairs. Since we operate in many countries, you can check our up-to-date market pairs via these links below. Please note that the market pairs are located on the top-left of the website.
What is the Last Price?
The last price is the price of the latest successfully matched order on the exchange. In other words, it’s the price of the most recent trade. See the example in the screenshot below; the last price is 13,989 for the market pairs BTC/AUD which means the latest order that was traded on Zipmex exchange at the time for BTC/AUD was 13,989 AUD for one bitcoin
What is a Market Price?
The market price is the current value of the digital assets that the exchange offers. If you choose to purchase at the market price, you would get the digital assets that you wish to purchase at the current Bid or Ask order. Basically, you are buying the sell order with the best price at the time that the sellers set on the exchange and vice versa.
What is a 24 Hour Pct Cng?
“24 Hour Pct Cng” is an abbreviation for “24-Hour Percentage Change” in price. If the price goes down, you will see a negative percentage. The screenshot below shows 0.18%, which means the BTC price for AUD pairs has increased by 0.18% over the last 24 hours.
What is a Bid?
When trading digital assets on an exchange platform such as Zipmex, you are engaging in an auction.
The value of a digital asset fluctuates because the price changes depending on what people are willing to pay for it. Bidding is an offer to set a price on something, such as a product or service. And in this case, a Bid or Bid price is the highest price that buyers are willing to pay for an asset at a given time.
When you put in a Bid price for a digital asset, an exchange will indicate the asset’s current market value according to that price. The price of each digital asset changes all the time. Some of the factors that affect the
- What people are willing to pay for that asset
- Traders expectations and their outlook for the future of the asset
These factors could also be a useful tool to help understand how optimistic the market would be for a particular digital asset. In the event of the Bid-pricing swelling over Ask-pricing, it indicates that the market is bullish on the asset.
In the sample below, you can see the Bid is 13,962 for BTC/AUD paring, which means the current highest price that buyers are willing to pay for 1 Bitcoin is 13,962 AUD.
What is an Ask?
Ask or Ask price, also known as offer price, is the minimum price that sellers are willing to sell their assets. The Ask price is just like a Bid price but for the sellers. When you place an order to sell your asset with a specific price, that is an Ask price for your digital assets that you are indicating to the buyers your minimum accepted price to sell. The trade will successfully happen when the buyers and sellers agree on a price that is not lower than the Ask price and not higher than the Bid price.
According to the sample below, the Ask is 13,986 for BTC/AUD pairing, which means that the lowest price that sellers are willing to sell their BTC is 13,986 AUD for 1 BTC.
What is a 24 Hour Volume?
24 Hour Volume is the amount of the asset that has been traded in the last 24 hours.
What is a 24 Hour Low?
24 Hour Low is the lowest price of the asset that was successfully traded in the last 24 hours. If there’s a buy or sell order that was placed but hasn’t been matched, the price will not show here. For example, if the current BTC price is 13,000 AUD, but someone places an order to buy at 5,000 AUD, and no seller is okay to sell it at that price. Then, the 24 Hour low will not be 5,000 AUD because the trade never happens.
What is a 24 Hour High?
24 Hour High is the highest price of the asset that was traded in the last 24 hours.
What does the Order Book Section mean?
In the order book, you will see a list of the Ask prices from sellers and Bid prices from buyers for the selected digital assets. The order book section includes:
- The Asking and Bidding price: on Zipmex exchange, Asking prices are red and Bidding are blue)
- AMT: the amount of the asset which transaction has been proposed for
- VOL: the total volume for the trading order in the pairing currency
For example, if you are trading on BTC/AUD pairings like the screenshot below, the red Price (AUD) is the price in AUD that sellers are willing to sell their BTC. AMT is the amount that sellers are selling for that order. VOL (AUD) is the total amount of money in AUD you need to pay for that order, calculated by Price (AUD) x AMT.
The Order Book section allows you to gauge whether there is a good indication of the health of the digital assets. If there are more sellers with asks than bids from buyers out there, it means the value of that asset is likely to fall in the near future.
What does the Recent Trades section mean?
The Recent Trades panel gives you a breakdown of all the recent trades for the selected digital assets. Watching this will give you an insight into what others are doing on the exchange. In the Recent Trade column, you can see the exact time when each transaction took place, the settled price, and AMT (the total asset amount either purchased or sold).
In the screenshot below, you can see that the most recent transaction for BTC/AUD was at 18.02 hrs for 0.0021 BTC at 13,970.5 AUD.
What is a New Order?
A new order is when you want to place an order to buy or sell an asset on the exchange. At Zipmex, we have an option to make it easier for you to specify the order amount no matter what kind of order you are placing. You can either specify your trading amount or choose the percentage of your balance for the order. In the screenshot below, we have 0.2680 BTC in the account. We click sell 50% and your selling amount is automatically changed to 0.1340 BTC.
What is a Market Order?
A market order is when you want to place an order to buy or sell an asset at a market price. Placing a market order means you accept the risk of buying or selling at the best price that is on the order book.
Advantage of Market Orders
Using a market order means you can trade immediately without waiting for the exact price like a Limit Order. You will be able to trade fast using the best rate offered at the given time.
The disadvantage of Market Orders
One of the disadvantages of a Market Order is when Slippage occurs. As Investopedia defines,
“Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. Slippage can occur at any time but is most prevalent during periods of higher volatility when market orders are used. It can also occur when a large order is executed but there isn’t enough volume at the chosen price to maintain the current bid/ask spread”.
For instance, if you buy 1 bitcoin at the current market price of $13,553. If the order book only has 0.2 bitcoin ($2,710.6) at the current market price of $13,553, this amount will be filled and displayed in the Filled Order section. As this is a market order, the remaining 0.8 bitcoin will be filled fully but at a different price level as the first order does not have enough liquidity for you to fill the full 1 bitcoin. So in actual fact, you didn’t buy 1 bitcoin at $13,553 , instead the average price you buy will be higher or lower. The same logic applies to sell orders as well.
What is a Limit Order?
A limit order when you place an order to buy or sell assets at a specific price. It is usually an instruction to execute a trade at a state more favorable than the current market price. The instruction allows you to specify a minimum amount that you would be willing to sell. Or a maximum amount which you would be ready to buy digital assets on an exchange.
For example, if the Bitcoin price is now 19,000 AUD, but you want to buy when the price goes down to 18,000 AUD. Instead of sitting in front of your screen all day waiting for it to happen, you can place a limit order to buy BTC. When the price hits 18,000 AUD, your order will be executed right away.
Advantage of Limit Orders
A trader can set their ideal price to execute a trade while saving their time of monitoring the market price. If the market reaches that level, a trade will be carried out without the need to monitor the market continually. A positive slippage could occur to a Limit Order. If the current market price falls below the set amount, your position could be opened at a favorable price .Using Limit Order could be a useful risk management method to minimize a loss on a trade. A trader can stop a trade if the market reaches a level that is less favorable than the current market condition.
The disadvantage of Limit Orders
A limit order may never be guaranteed to be filled because the market price did not reach that amount you have specified. You might have an open order for weeks with no match because the market price never reaches your desired price.
Account Section
On Zipmex, an account section is located at the bottom left-hand side of the screen. It contains all your essential trade, deposit, and withdrawal information. Navigate these tabs to locate the status of each trade, deposit, or withdrawal.
The digital assets market could be highly volatile. We encourage you to do your due diligence and research before investing. Be more informed and trade wisely by reading some of our guides such as Bitcoin explained, Basic things to know before trading, and how to decide which asset to invest first.
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