The first time I created a Binance account and opened a spot trading page the first time I was totally lost for a little bit and even tried looking some stuff up to understand better.
Trading Terminology
Spot Order: The most basic kind of order you can place. This is where you purchase a token off an exchange for whatever it is currently trading at. You get the tokens/coins in your exchange account wallet and can withdraw/trade right away.
Spot Order (DEX): These are almost exactly the same as a spot order on a CEX. The first being after a trade you get the token in an actual private wallet. There’s always a risk holding coins in your account on a CEX. Until it’s in a wallet you own keys on you don’t actually own the asset. The second big difference is that there is not usually an order book with bids and asks in it. There is an algorithm that determines the price. See DEX posts to dive deeper
Limit Order: This is where you set either a bid or an ask. This is the type of order I use most often to maximize my holdings and profits. It requires a bit of patience and sometimes the limit never gets hit before a pump or dip.
Bid: The price you are willing to pay for the asset
Ask: The price you are willing to receive for selling asset
Stop Limit: I haven’t used these kind of orders much before. This requires 3 variables to be input
Stop Price: When the price of asset hits your stop price then a limit order is placed. Before this there is not an order on the book. The benefit of this is to have less limit orders set. I don’t understand it but if there’s a ton of orders in the orderbook it screws wit the price
Limit Price: Price you want to sell or buy at like a normal limit order
# of tokens you wanna sell:
Stop Market: Same as stop limit order but instead it executes an order at market price when the stop is hit
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Trading Fees: Every exchange charges some sort of fee for every trade made. The amount varies by exchanges. Some offer discounted fees for holding that exchanges token
Order Book: Every current order on the market both bid and ask. Bids are green and asks are red most of the time.
Liquidity: The number of assets the exchange has in it’s possession. For DEX Liquiity includes two assets matched 1:1 against eachother
Chart: I will dive deeper into these in another post. This was the most confusing part for me early on as I hadn’t looked at charts before. These show the price of the tokens over time.
Candlestick: This is what threw me off the most at first. You can adjust the charts by time and you will see 1 candlestick for every period of time. These show the price of the coin over that period of time.
Volume: What it sounds like. The total # of assets that changed hands over the period of time you adjusted on the chart