Using an online cryptocurrency exchange can be confusing at first, but once you understand some of the basic concepts, it’s easy. To buy and sell on an exchange confidently, you really just need to understand one concept: the difference between make and take orders. A Tasty Example I’ll explain the difference between make and take orders with an example of something we all know well–indulging in candy. Say you want some candy bars, so you go to the store to buy some. The price is already set ($3 per bar), and — if you were really hungry — you could buy the store out of all of its candy bars. Mmmm, Snickers An order, whether it’s for snickers or something else, is an offer of one thing for another thing. The “thing” could be a product, service, entity, object, and other things that people see value in. In this case we are ordering a certain amount of snickers bars for a certain amount of money. The idea is the same on an exchange, and all online cryptocurrency exchanges follow the same basic rules. There are slight differences, but when you know how to use one, it’s easy to use all of them. I’m going to explain these concepts using ethex.market, which is a new decentralized exchange I work for. It lists useful ERC20 tokens, like DENT. Taking Orders At the top of the image is the make area, and at the bottom is the take area. You can interact with either part once you have a wallet linked to the exchange, but let’s look at the take area first. In the take area, different offers are listed with their price, coin or token amount, and the calculated total (price x amount = total). Again, the price can be one of several different currencies, coins, or tokens. In this example, the price is in Ether (ETH), and the token that is up for grabs is DENT. In most exchanges, it’s as simple as clicking 2 or 3 times to take an offer. Detail of the take area These offers are available to everyone on the exchange to take. If you decide that you like the price and amount of an offer, you can “take” that offer as long as your wallet is capable of paying for the total (if you’re buying), or capable of sending the amount (if you’re selling). Taking orders applies to both buying or selling. Here are the main advantages and disadvantages: · You can take the offer immediately (+) · You can’t choose the price that you buy or sell (-) · You can’t increase the amount that is offered, but you CAN decrease the amount in some exchanges (+/-) I reduced the amount from 24000 to just 240 So, for “take” orders, you are taking the price and amount that is offered. If you are in a situation where time is of the essence, or otherwise want an offer as soon as possible, you should take that offer. But if you want to set the terms of your deal, you may want to make the offer. Back in the store, you’ve decided to max out your credit card and buy 500 snickers — enough to empty their inventory and fill up your car (you would buy more, but that’s all they had). Admittedly, filling up your car with snickers was a mistake. After eating the 12th one on the drive home, you realized that you were quite literally sick of chocolate. Now, you’ve decided it’s time to get them out of your sight — it’s time to sell! This time, YOU are going to make the order. But how do you make orders, and who will be your customers? Making Orders Similar to the take area, in the make area, you see a price, amount, and total. But this time, you can change the amount AND the price. The price can be set to anything, and so can the amount, as long as your wallet can handle the transaction. I arbitrarily set the price and amount for the buy/sell options The main drawback of making orders is the wait time. Sometimes, your offer will be taken very quickly, but sometimes it won’t be taken at all. The key to being a good order maker is creating an offer that is beneficial to you, yet appetizing to order takers. In summary, here are the advantages and disadvantages of order makers: · You can choose the price that you buy or sell at (+) · You can choose the max amount of what you are offering to buy or sell (+) · You have to wait for someone else to take your offer (-) Now let’s sell some candy! It turns out, finding customers was easy. The thunderous rumbling of your stomach and your tormented groaning can be heard over a 2-mile radius, so a few neighbors come to check on you. One says, “Too many chocolate bars again?” And another declares, “I’ll take them off your hands.” You manage to croak that you will sell all 488 of your snickers for the low price of $2 — a bargain! Since no one in their right mind would want that many candy bars, the whole neighborhood (which has gathered at this point) take a few at that price, until none are left. You just made an order! Even though it wasn’t the best deal (you lost a dollar on every bar you sold), you needed to get those candy bars out of your sight RIGHT NOW. And you did! That’s how you make and take orders on an online cryptocurrency exchange! If you want to test your knowledge, go to https://ethex.market and try to make/take and order. This article was written by my colleague Jordan Randolph and I had his permission to distribute it.