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Hackernoon logoResearch on the Usage of Orders on Crypto-Exchanges by@kick_ecosystem

Research on the Usage of Orders on Crypto-Exchanges

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@kick_ecosystemKick Ecosystem

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Despite the fact that the demand for "classic" orders remained,
crypto enthusiasts showed a growing demand for other complex trading instruments such as the smart orders

Relevancy Statement

The relevancy of the research conducted recently by KickAcademy reveals that due to the fact that more and more traders both on stock exchanges and cryptocurrency exchanges complete their trading strategies with the help of the complex trading instruments. The percentage of use of simple and complex orders by traders is extremely interesting, as well as their attitude to the complexity of mastering the exchange functionality and the impact of order types on the profit.

Research data

The study overlooked 1,716 respondents from more than 100 countries. The most active users were from the USA, Russia, India and Indonesia. Most of the participants were users that trade crypto assets on crypto exchanges. Most of the respondents are engaged in trading every day, and one in two respondents spend more than an hour doing so.

Types of orders

Market Order, MKT — this order is executed at the Current Price (CP) that is valid at 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 ready to buy or the minimum price at which you are ready to sell the selected asset. The price for the Buy Limit Order must be lower than the market price and for the Sell One 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 set is reached. Most commonly, the 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 to stop the further loss on the asset.

Take Profit — this order is a command to close a position when the profit margin is reached. For example, if you place the Stop Order for $9, the asset you bought for $10 will be sold when the price drops to $9. If you set the Take Profit Order at $11, the asset will be sold when the price reaches this level and you will fix the profit.

Stop Limit Order, STP + LMT
 — a stop order with the limit (restriction) function of an execution price. If the price has reached the Stop Price, the Stop Limit Order is placed. In this case, the Limit Price may either coincide or differ from the Stop Price. Most often, this order is used to avoid the sharp price movements of the asset.

Trailing Orders— a dynamic order that automatically moves with the market price. This order has no fixed price and allows placing orders with the moving price level. This allows you to make transactions at the most favorable rate.How much time per day do you spend trading on the exchange on average?

The results

In the course of the research, we have found that different types of orders and functionalities that the exchanges are trying to implement, have a great response from traders. Moreover, various orders are actively used by them. However, the simple types of the orders, which immediately end up in the order book after, are still the most frequently used. The Limit Orders are on the frontline of leadership.

A significant part of traders surveyed notes that using the complex order types and the additional functionality greatly affects the profitability of trading. For most people, the availability of a wide range of trading functionalities on the cryptocurrency exchange is one of the most important criterias. In addition, in some cases, users prefer exchanges that have complex orders.

Nevertheless, the research revealed that despite the attractiveness of the smart orders and their positive impact on profits, almost half of the respondents had difficulties in mastering these order types. It follows herefrom that the exchanges should be more attentive to the education and training issues and interactive demonstration of the functionality of smart orders for the greater user adoption.

Obviously, in order to retain traders, the exchanges should not only pay attention to technical support and convenience in working with classic orders, but also initiate the development of new tools, that correspond to the market challenges. The new KickEX crypto exchange demonstrates one of such examples of successful implementation of the complex orders. Here advanced traders have double Stop Orders and Trailing Orders at their hand.

In addition, the developers have taken care of the smart cashback feature— up to 100% of trading commissions, and the affiliate program KickRef for additional partly passive income for users. The "conservative" traders should think about introducing new complex orders into their trading strategies, which, as the research has shown, have a chance to bring profits up the next level.

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