How To Set A Coinbase Limit Order
Cryptocurrency has grown from a modest, alternative investment to one that has changed the world and is worth over $2 trillion in total. You’ve probably heard of Coinbase if you want to invest in cryptocurrency or use it as a means of payment.
It has become one of the most popular cryptocurrency exchanges online, with tens of millions of users. It’s also one of the simplest methods to acquire bitcoin, contributing to its meteoric rise in popularity.
Coinbase, in a nutshell, is a cryptocurrency exchange where you can purchase popular currencies. Additionally, it can accommodate traders with features such as stop-loss orders and personalized trading that alter how people invest and sell their crypto.
Just a quick note before you read on, this does not work on the Coinbase mobile app.
What is a Limit Order?
A limit order is a form that allows you to buy or sell a commodity at a certain price or better. Buy limit orders will be performed only at the limit price or a lower price, but sell limit orders will be executed only at the limit price or a higher price. This condition enables dealers to have more influence over the pricing at which they trade.
A limit order is used to purchase or sell crypto at a predetermined price. For example, if a trader wants to purchase a cryptocurrency but has a restriction of $33.00, they would only buy the asset at that price or below. If the trader wants to sell Bitcoin stock with a limit of $33.00, the trader will not sell any shares until the price is $33.00 or above.
The investor is assured to pay the purchase limit order price or better by utilizing a buy limit order, but the order is not guaranteed to be filled. A limit order provides a trader greater control over the execution price of an asset, which is useful if they are hesitant to use a market order during times of high volatility.
You may use a limit order in various situations, such as when a stock is rapidly increasing or dropping, and a trader is concerned about obtaining a poor fill from a market order. A limit order may also be handy if a trader is not following a stock and has a precise price in mind at which they would be willing to purchase or sell that investment. Limit orders with an expiry date may also be kept open.
What’s the Difference Between Limit Order and Market Order?
You’ve probably heard of a market order and are curious about the difference between it and a limit order.
A market order instructs a broker to buy or sell a stock as soon as the order is made. Market orders are used by investors when they wish to join or leave a position immediately, regardless of the price. On the other hand, a limit order instructs a broker to purchase or sell a stock only if it reaches a certain price.
A market order ensures that the broker will complete the stock transaction, but a limit order does not. On the other hand, a market order does not ensure that the deal will be executed at a price desired by the investor.
So, should you place a market or a limit order? A simple litmus test may be used to evaluate whether to use a market or limit order to purchase or sell a stock. If executing a deal is critical to you, a market order is your best alternative.
However, if a specified price on stock buys or sells is a deciding factor, then a limit order is the best type. Even with the same stock, your preferences might shift over time. You could make a limit order to purchase a stock at a low price at first, and if that deal doesn’t go through, you can cancel your limit order and place a market order instead.
Buy now or buy at a certain setpoint – that is the question you should ask yourself when deciding between setting a market order or a limit order with your cryptocurrency investment.
What is Coinbase?
If you are looking into finally acquiring some cryptocurrency and testing out your preference to market limit or limit order, you have many options these days. In just a few short years, the number of online exchanges offered to investors has exploded into a number larger than ever expected. However, of all selections out there, Coinbase remains the most popular and well-reviewed by investors, both new and seasoned.
Coinbase is a cryptocurrency trading and investment website that allows users to purchase, trade, and exchange over 100 various and popular cryptocurrencies. This includes Bitcoin, Dogecoin, Ethereum and so many more.
If there is a cryptocurrency you are interested in, Coinbase likely has it. Coinbase has blossomed in popularity over the years and is now a major corporation with over 73 million users worldwide and a platform worth more than $255 billion.
For basic buy and sell orders, some users would most likely prefer the old Coinbase platform. However, Coinbase Pro, the newer and more capable upgrade of the system, is accessible to all Coinbase users and allows sophisticated users to access extra tools and order types, including limit orders.
Coinbase was established in 2012 as a platform for sending and receiving Bitcoin. The firm has expanded to accommodate dozens of distinct cryptocurrencies and now employs nearly 3,000 people globally.
Despite its growing size, Coinbase is a decentralized organization with no central offices.
Coinbase has users in over 100 countries, and clients exchange over $327 billion every quarter. Coinbase oversees a thriving bitcoin ecosystem that serves 9,000 financial institutions.
Coinbase has two distinct trading platforms, as well as a standalone bitcoin wallet service. You’re likely to find all you need to create and maintain a bitcoin portfolio or trading strategy among the Coinbase offerings.
Cryptocurrencies are a relatively new commodity to many that may be volatile and dangerous, making them unsuitable for many investors, especially beginners. However, if you’re interested in cryptocurrencies, Coinbase is a great place to start for both beginners and seasoned investors.
How to Set a Coinbase Limit Order?
Here is how you create a Coinbase limit order:
- Choose the Limit tab on the Orders Form section of your Trade View
- Choose whether you’d like to Buy or Sell
- Enter the exact size and your price
- In the Advanced settings, you may select either Post Only or Allow Taker
- Select Place Order to submit your order
There is a lot to keep in mind here, especially regarding the Post Only and Allow Taker features.
First up is Post Only. Post Only ensures that your limit order is posted to the order book and charged a Maker Fee if it is filled. If any component of the order executes instantly owing to its price when it reaches the matching engine, the whole order is denied. If desired, this may be used to ensure that an order is not subject to Taker Fees.
If you don’t activate Post Only, any portion of your order at a price that would execute instantly would execute immediately and be charged Taker Fees. Any remaining portion of the order will stay on the order book and be charged Maker Fees if filled.
As for Allow Taker, it has its specifications to remember. Allow Taker will execute the order regardless of whether it crosses the spread to fill an existing order. If any component of the order crosses the spread, the taker fee rate will be applied to that piece.
Limit orders are useful tools, but of course, they are not without flaws. The same feature that safeguards you against excessive losses might also prevent you from obtaining unexpected profits. Essentially, a limit order is like an autopilot, and, for better or worse, it will guide your crypto portfolio and perform tasks without your supervision.
Limit orders may result in the loss of extra earnings or shares in a turbulent market because they execute too quickly. They do what they are told; there is no doubt about that. But sometimes, that can keep you from great gains in the market.
Set a limit on your order outside of daily price changes if you wish to purchase or sell a stock. Make sure the limit price is set at a level where you can live with the result. In any case, you will have some say over the price you pay or get.
If you are the sort of crypto trader who doesn’t want to watch the market closely every moment of the day, a stop-limit is a great move for you. It will give your account guidelines to follow, and you can sit back, enjoy your life, and know that your crypto investments are following the rules you have set for them.
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December 2, 2021 at 11:24 pm
Maybe you should mention that none of this is possible in the coinbase app
December 2, 2021 at 11:26 pm
To elaborate further, it is briefly mentioned mid article, but should be made VERY obvious right at the beginning
December 3, 2021 at 11:37 pm
Thanks for noting that! We’ll move it to earlier in the article 🙂