What is Chain Order in Cryptocurrency?
When trading in the cryptocurrency market, you can use various order types to follow price movements and not miss opportunities. One of them is the chain order. A chain order is a trading strategy that automatically triggers another order when an order is executed.
How does chain order work?
A chain order is created by linking two or more orders. The main order, which is the first link of the chain order, can be a market or limit order. When the main order is fulfilled, the secondary order, which is the next link in the chain, comes into play. A secondary order can also be a market or limit order. When the last order, which is the last link of the chain order, is fulfilled, the chain is completed.
Why are chain orders used?
Chain orders can be used for different purposes in the cryptocurrency market. For example, an investor may want to buy or sell when a certain price is reached. In this case, he can set the main order as a limit order and set the secondary order as a market order. Thus, it can automatically buy or sell when the desired price is reached.
Another example is an investor may want to realize his profit or cut his losses. In this case, he can set the main order as a market order and set the secondary and final order as a limit order. Thus, after buying or selling, it can automatically close its position when the profit or loss level it has determined is reached.
What are the advantages and disadvantages of chain order?
The advantages of the chain order are:
- Ability to trade without the need to constantly monitor price movements
- Making profit or minimizing loss without missing opportunities
- Disciplined trading strategy without making emotional decisions
The disadvantages of the chain order are:
- Don't forget to cancel the chain in case market conditions change
- Payment of commission fee for each order included in the chain
- Do not lose liquidity while waiting for the execution of each order included in the chain.