Crypto trading explained: orders, spread and price charts

An exchange works like a marketplace. Anyone who wants to buy says what price they'll pay; anyone who wants to sell does the same. All those orders sit in the order book: sellers and their ask prices at the top, buyers and their bid prices at the bottom. When a buyer and a seller land on the same price, there's a deal.

The gap between the lowest ask price and the highest bid price is called the spread. For big coins on a busy exchange it's small; for small coins, or when markets are jittery, it can get quite wide.

Lots of apps don't show you an order book at all and just give you one price. The spread is then often built into that price. See two different prices for buying and selling? The difference is the spread.

Market order: buy now, at the best price

A market order goes through straight away, at the best price in the order book at that moment. Quick and simple. The downside: with a big order or not much on offer, you end up buying some of the pricier coins too. That's called slippage.

Limit order: only at your price

With a limit order, you pick the price yourself. Buy bitcoin with a limit of €70,000 and your order only goes through if someone's willing to sell at that price or less. Maybe straight away, maybe later, maybe never. Until then your order stays in the order book, or until you cancel it.

Stop-loss: sell automatically if the price drops

A stop-loss sells automatically if the price drops below a level you've picked. Handy for limiting a loss, but there's no guarantee: in a fast drop, the sale can go through well below your stop price.

Maker and taker

If you put an order in the order book that doesn't find a match straight away, you're a maker: you're making the market. If you take an order that was already there, as with a market order, you're a taker. Lots of exchanges charge makers a lower fee than takers.

Every time you buy or sell, you usually pay in two ways: the trading fee, a percentage of the amount, and the spread. On top of that there can be fees for depositing or withdrawing money, and a network fee if you send crypto to your own wallet.

Work out what a purchase costs on each platform with our fee calculator. Which platforms have a MiCA authorisation and what else they charge is in compare exchanges.

Most exchanges show the price as a row of candles, or candlesticks. Each candle stands for a set period: a minute, an hour, a day or a week. You choose the period yourself, usually at the top of the chart.

The thick part of the candle runs from the opening price to the closing price for that period. If the closing price is higher, the candle is usually green; if it's lower, red. The thin lines above and below show the highest and lowest price. Below the chart you'll often see the volume: how much was traded in that period.

A chart shows what has happened, not what's going to happen. Lines, patterns and indicators help some traders make decisions, but they never come with a guarantee. If you want to draw charts and try out indicators yourself, you can do that with TradingView, for example. For a quick look at the trend, there's our market regime gauge.

1. Pick a platform with a MiCA authorisation. Compare the fees and check the authorisation in our authorisation register.
2. Deposit a small amount. Start with money you can genuinely afford to lose.
3. Choose your coin and your order type. For a first purchase a market order is fine; if you want a fixed price, go for a limit order.
4. Look at the total. Check the price and the fees before you confirm, not just the exchange rate.
5. Confirm and check your balance. Your purchase will then show up in your account.
6. Keep bigger amounts yourself. How that works is in our beginner's guide.

• Buying on FOMO. Jumping in after a big rise because everyone else is doing it is exactly how lots of people end up paying too much.
• Trading too often. Every order costs money. If you buy and sell every day, your gains often leak away in fees.
• Trading with borrowed money. With leveraged products you can lose the lot in a few minutes. Don't touch them when you're just starting out.
• No plan. Decide in advance when you'll sell, both when you're up and when you're down.

For most people, buying a fixed amount regularly is a lot calmer. How that works is in buying crypto automatically (DCA).