What Does 'Price Type' to Follow Mean?
NOTE: This option is set to LAST PRICE by default
What is it?
The current 'price' of a coin can be looked at in one of 3 ways, BID, ASK, or LAST PRICE.
The asking price is the lowest priced sell order that’s currently available or the lowest price that someone is willing to sell at.
The last price represents the price at which the last trade occurred.
Last Price follow
The last price is the 'easiest' to understand and is the price on which most charts are based. Quite simply this is the last price that the coin was either bought or sold for.
Think in terms of the sale of any other asset. You’ve decided to sell your home and you list it at $350,000. You receive an offer of $325,000. After much negotiation, the sale finally goes through at $335,000. The last price is the result of the transaction— not necessarily what you hoped to get, nor what the buyer hoped to pay.
The last price is the most recent transaction, but it doesn’t always accurately represent the price you would get if you were to buy or sell right now. The last price might have taken place at the bid or ask, or the bid or ask price might have changed as a result of or since the last price.
The current bid and ask prices more accurately reflect what price you can get in the marketplace at that moment, while the last price shows at what price orders have filled in the past.
If you use the last price option, your orders will be triggered based on the price you see on a standard trading chart.
Bid Price follow
The price will be determined by the first order in the BIDs order book.
Example using Take Profit
You buy 1 ETH at $100 and set Take Profit of +5%, at $105.
After a while, ETH begins to rise and the following occurs in the trades:
Example using Stop Loss
You buy 1 ETH at $100 and set a Stop Loss of -5%, at $95.
After a while, the ETH begins to fall and the following occurs in the trades:
Ask Price follow
The price will be determined by the first order in the ASKs order book.
Example using Take Profit
You buy 1 ETH at $100 and set Take Profit of +5%, at $105.
After a while, ETH begins to increase, and the following occurs in the trades:
Example using Stop Loss
You buy 1 ETH at $100 and set a Stop Loss of -5%, at $95.
After a while, ETH begins to drop, and the following occurs in the trades:
Where can I find it?
If you are using the basic trade form it can be found in the stop loss section:
If you are using the advanced trade form it can be found in the advanced options of the Buy form, Target form, and define stop loss form. Please note that the choice for Target will apply to your Stop Loss also as these trade orders are connected:
Which should I use?
If you want to avoid confusion and the feeling of 'missing out' then using Last Price means that if you see the price reaching a certain level in the news or on a chart, your orders should trigger.
However, the downside to this is that you won't necessarily buy or sell at the exact price you were hoping for. This is because the bid or ask is not the same as the last price.
For example, if the price moves up rapidly and the last price could reach your target, but if there is no one else willing to buy the coins you wish to sell at this price (i.e there are no 'bids' at the 'last price') you will sell to the next available bidder which could be lower than you had hoped for.
Why doesn’t an order trigger sometimes if I use Bid or Ask?
If the order didn’t trigger at all, it happens when the price doesn’t reach the trigger level. When you use a conditional order, it doesn’t go to the exchange order book beforehand. We follow the price and place the order when the price reaches the trigger level. We use BID, ASK, and Last prices. Above you can find an example of how the BID price is different from the LAST price on the rise.
For conditional orders placed above the actual price, Let's assume the user selects the Bid price. It’s the price of the first order on the buy order book. When the price reaches $50 on a spike, the first BID order might still be at $47. The price might go up even to $50, and there are still no buy orders at $50.
For example, let’s say there is a BID order at $40. Someone buys everything up to $50 with a market order, but no one places a buy limit order higher than $40. In this case, even the price on the chart is $50, and the BID price is still at $40.
Similar happens on the price drops.
Conclusion
Using the last price will sometimes be a little bit inefficient as you will sometimes sell your coins for less than the target price. But it will mean that you always get in and out of your trades.
Note: Apart from Bid/Ask spread there are other reasons for stops not getting triggered. Server Latency (0 to 4 Secs) for most exchanges and up to 10Secs for some exchanges.
Remember: Your money, Your Responsibility