This article is intended for Australian members. If you're looking for instructions for CoinJar UK, visit this article.
Types of exchanges
An exchange where the buy and sell prices are pre-determined. CoinJar is an example of an over-the-counter exchange.
An exchange where traders can submit buy and sell orders, determining the market price of a currency. CoinJar Exchange is an example of an Order Book exchange.
The trade itself - a proposal to buy or sell a currency for another.
The two assets being traded against each other. The trading pair will typically be listed as ‘BTC / AUD’ etc. All digital currencies on CoinJar Exchange can be traded against Australian dollars and Bitcoin.
The value of your order - the most/least you’re prepared to settle for, depending on whether you’re buying or selling.
The amount of your order - how much of the currency you’re choosing to buy or sell.
When selling a currency, the best “bid” is the highest amount someone is willing to pay for the currency.
When buying a currency, the best “ask” is the lowest amount someone is willing to sell the currency for.
When an order is placed that can fulfil another, the two orders are “matched”.
When a buy and sell order are matched each of the orders are then “filled”, completing the exchange of currency between the two participants. The aim of all participants is to have their orders filled.
The amount of trading activity of a particular currency over a given period.
The ease of trading a currency. If a currency is more “liquid” than another, it’s easier for a trader to buy or sell it on the market. Higher volume and varied price points leads to better liquidity.
A trader that submits their own orders to the Order Book at a price they determine, introducing liquidity to the market.
A trader that accepts existing orders on the Order Book at a price they agree to, removing liquidity from the market.
Anticipating the price of a digital currency will increase, and buying to take advantage of this.
Anticipating the price of a digital currency will drop, and selling to take advantage of this.