Using An Exchange

What Is An Exchange

An exchange is a place where traders go to buy and sell a certain set of assets. In this case cryptocurrencies. Traders want to all go to the same place (with the best fees/features) in order to have a large liquidity pool so they can trade quickly and easily (wanting to buy a million dollars worth of something when there is only half a million available on the exchange won’t bode to well).

Be careful, exchanges are centralized so they make themselves open to attack and exchanges have been hacked in the past and lost customers’ money. This is why it’s important not to keep everything on an exchange. Keep what isn’t being traded off the exchange in a personal wallet. That is a much smaller target than an exchange.

Requirements

Email Address

An active email address that can be verified is needed log into most exchanges. Confirmations and various notifications are also sent to this email.

Picture Of An ID Card

Depending on how much is being traded a user may be asked to submit copies of government ID.  Exchanges have to do this by law.

Funds

Funds from outside the exchange are needed to trade. An existing fiat bank account that can wire money to the exchange, or existing cryptocurrencies already owned.

Having access to a large pool of funds so your trades get filled quickly

Being able to buy and sell many different cryptocurrencies in one place

Having a support team there in case something goes wrong

Pros and Cons

The exchange can run off with Monero or personal information

The exchange can be hacked resulting in loss of Monero or information

Financial activities are more easily monitored by third parties

Different Features Of An Exchange

Trading Pair

The trading pair represents the two currencies that are being traded. The second currency listed is the “base” currency. The base dictates what currency pricing is in.

If Canadian dollars is the base (X/CAD) that means that the prices are in Canadian dollars. Whether it’s BTC, XMR, USD, or pancakes, the price will always be shown in Canadian dollars ($x.xx)

If BTC is the base that means that the prices will be in BTC. Whether it’s XMR, ETH, or cookies the price will Bitcoin (x.xxxxxxxx BTC)

BTC/CAD – Bitcoin Priced in Canadian Dollars

ETH/XMR – Ethereum priced in Monero

USD/EUR – US Dollar priced in Euro

Price Chart

The price chart is most likely the most prominent thing seen once logged in. The most common type of chart shown is a Candle Stick chart (pictured right). This will be just quick overview of the candle stick chart.  The chart to the right is set to the 1 Hour scale as noted by the 1H selected at the top.

Candle – Each candle represents one unit of time that has been selected.

Wicks – The thin ends of each candle. The wicks indicate the high and low for that time.

Body – The thick part of the candle, it represents the open and close of the selected time. If the candle is green that means the hour closed higher then it opened. If it’s red it means the hour closed lower then it opened.

Order Book

This is where the trades that are currently waiting to be filled can be seen. The pair in this case is XMRUSDT so that means Monero priced in USD.

The order book on the right shows traders are asking a total of 3340.59 USD for 49.894 XMR at a price of 66.95 USD per XMR. If someone wanted 1,000USD worth of Monero their order would be filled at the lowest offered price. However, if someone wanted to buy 5,000 USD they would have two options: Buy everything at the cheapest price then the rest at the new lowest price until their order is filled. Or buy everything at the cheapest price and leave the rest as an order yet to be filled at the same price. The first option would get XMR faster but would also drive the price up.

Order Form

The order form is used to input whether a trader wants to buy or sell regarding the pair they are looking at.

Open Orders

The open orders section shows which of your orders are still in the order book waiting to be filled. Canceling a trade will only cancel the part of the trade that has yet to be filled by the market.

Open Orders

Showing you your order history for your notes and for troubleshooting. Most exchanges will also give the option to export your trade history for your records.

Practice

If all this seemed a little confusing that’s because it is. Exchanges will become more familiar the more you use them. Re-read this a few times while looking at different pairs and different order books to learn how to apply the terms and knowledge properly.

Traditional markets operate in a similar manner to Monero exchanges, don’t be afraid to turn there for help with certain concepts. Follow the button below for steps on how to execute a trade now!

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