Atomars exchange team is constantly working on improving the platform and adding new functionality and tools for a better user experience.
Just recently Atomars added Stop-Limit orders to give traders an extra option and flexibility to manage their trades. Stop-Limit orders can be selected in the drop down menu of the Order form.
What are a Limit and Market Orders?
Before proceeding with the description lets first discuss what is a Limit and Market orders — the most basic orders you may find on any cryptocurrency or traditional stock exchanges.
A Limit order is an order that you place on the order book with a specific limit price which is determined by you. When you place a limit order, the trade will only be executed if the market price reaches your Limit price (or a better price). This means that you may use limit orders to buy coins at a lower price or to sell them at a higher price than the current market price.
Example of a Limit order: you want to buy BTC at a lower price than what is currently being bid. Login to your Atomars account, choose the BTC market you want (e.g., BTC/USDT) and go to the trading terminal (exchange) page. Then, find the Limit order tab, set the price and amount, and click the Buy BTC button. You may also set the amount by clicking the percentage buttons, this way you can easily place a limit Buy order for 25%, 50%, 75% or 100% of your balance.
Same process can be applied to the Sell Limit order, but in that case you plan to Sell BTC at a higher price than the current market price.
You should use Limit orders when you are not in a rush to buy or sell, since limit orders are placed on the order book and are not executed immediately, which also means that you save on trading fees.
A Market order is an order to quickly buy or sell coins at the best available current market price. To be filled (executed) it needs a liquidity, meaning that it is executed based on the Limit orders that were previously placed on the order book.
Unlike Limit orders, where orders are placed on the order book, market orders are executed instantly at the current market price. Meaning that if the Market order volume exceeds the total volume of the Limit orders placed in the order book, such Market order will be still executed, but partially filled (order volume will be equal to the total volume of the Limit orders). You shall also understand that the execution price of the Market order may differ significantly from the current market price if there is not enough liquidity in the order book. One shall check the order book before placing the Market order to make sure there is enough liquidity and the execution price will be within the comfortable range of the trader placing such order. Also you pay higher fees when placing a Market order (since you are taking the Limit orders set by other traders, which are acting as market makers whilst you are acting as a market taker).
Example of a Market order: you want to create a market order to buy 1 BTC. Login to your Atomars account, choose the BTC market you want (e.g., BTC/USDT) and go to the trading terminal (exchange) page. Find the Market order tab, set the amount to 1 BTC, and click the Buy BTC button.
Market orders are handy in situations where getting your order filled is more important than getting a certain price (you need to quickly buy or sell coins). This means that you should only use market orders if you are willing to pay higher prices and fees caused by the slippage. In other words, market orders should only be used if you are in a rush.
If you’re new to crypto and trading for the first time we strongly recommend you to avoid using market orders because you will probably be paying way more than you should. In such a case, you should use a Limit order (see above).
What is a Stop-Limit Order?
To understand a Stop-Limit order you must understand what is a Stop price and Limit price. The Stop price is simply the price that triggers a Limit order, and the Limit price is the specific price of the Limit order that was triggered. This means that once your Stop price has been reached, your Limit order will be immediately placed on the Order book.
The Stop and Limit prices can be the same, but this is not a requirement. It would be safer for you to set the Stop price (trigger price) a bit higher than the Limit price (for Sell orders) or a bit lower than the Limit price (for Buy orders). This increases the chances of your Limit order getting filled after the Stop-Limit is triggered.
Let’s say you just sold 1 BTC at 7336 USDT because you believe the price is close to a major resistance level and will likely go down from here.
In this situation, you may want to set a Stop-Limit Buy order to minimize your losses in case your assumption is wrong, and the price starts to increase. To do that, log in to your Atomars account and go to the BTC/USDT market. Then click on the Stop-Limit order in the drop down menu of the Order form and set the Stop and Limit price, along with the amount of BTC to be bought.
So if you believe that 7336 USDT is a reliable resistance level, you may set a Stop-Limit order just above this price (in case it doesn’t hold). In this example, we will set a Stop-Limit order for 1 BTC with the Stop price at 7350 USDT and the Limit price at 7360.
Same concept, when you think that the price of the coin will go up, but you would like to protect yourself from a possible price drop, you may set a Sell order with the Stop and Limit prices lower than the current price (or the support price you believe the coin reached and bottomed).
Note that the Stop-Limit order will only be placed if and when the Stop price is reached, and the Limit order will only be filled if the market price reaches your Limit price. If your Limit order is triggered (by the Stop price), but the Market price doesn’t reach the price you set, the Limit order will remain open and you will be able to cancel it at any given moment.
Important notice: in a situation where the price drops too fast, and your Stop-Limit order is passed over without being filled. In this case, you may switch to Market order to quickly get out of the trade (read about the Market order above).
When should you use Stop-Limit order?
Stop-limit orders are valuable as a risk management tool, we recommend you to use it to avoid significant losses. Stop-Limit orders are also useful for placing Sell orders to ensure that you take your profits when your trading targets are reached. You may also set a Stop-Limit Buy order to buy coins after a certain resistance is breached during the start of an uptrend.