Basic Trading Concepts

If you place an order in a single transaction, it is easy to determine the performance of your investment. Simply calculate your potential PNL by checking the execution price. However, if you place your orders in several transactions at different prices with different sizes, evaluating your investment’s performance is a little more complicated. In this case, the best method is to calculate the average execution price. Fortunately, our system automatically calculates and displays the average price. However, below are the equations to help you calculate this yourself. To explain these equations we will use different contracts as examples. BTC/USD Contract (Inverse...

Limit orders are one of the three types of orders that you can place on Phemex.com. Limit orders specify the maximum or minimum price that you are willing to buy or sell at. This order type helps minimize trading costs. However, limit orders do not guarantee execution. There is a chance that your order may not be executed if it is placed far out of the market. So how does the limit order work? For a long/buy order, if the order price is equal or greater than the best ask price, the order will be filled immediately. The executed price will be...

A Bracket Order (BO) is represented by a Limit Order (or primary order [PO]) that comes attached with two exits: a Take Profit (TP) limit order plus a Stop Loss (SL) limit/market order . (Learn How to place stops and define trade invalidation on Phemex Academy) The TP and SL orders are initially inactive until the PO becomes fully filled. Partially filled POs will not activate their associated TP or SL orders. Once the PO is fully filled, the TP limit order will immediately be sent out into the order book at a limit price which is specified by an...

Close on Trigger is a special order condition that is similar to Reduce Only in that it only allows you to reduce or close, but not increase your positions. In addition, once triggered, this condition cancels all other orders that apply to the same position (such as take profit or stop loss orders). For any inquiries contact us at support@phemex.com. Follow our official Twitter account to stay updated on the latest news. Join our community on Telegram to interact with us and other Phemex traders. Phemex, Trade Simple

Reduce Only is a special order condition that only allows you to reduce or close a current position you hold. If a Reduce Only order were to increase your position in any way, it will either be immediately canceled or the contract size will be adjusted to prevent an increase.

Post Only is a special order condition that will only allow your order to be posted when it can enter the Order Book. In other words, this condition is designed to ensure that you will receive a maker rebate. If that is not the case, the order will be immediately canceled. For any inquiries contact us at support@phemex.com. Follow our official Twitter account to stay updated on the latest news. Join our community on Telegram to interact with us and other Phemex traders. Phemex, Trade Simple

These special instructions help a user define how long an order remains active before execution or expiration. The following are three of the most common Time In Force instructions used on our platform. Good Till Cancel This instruction indicates that an order will continue to remain active until it is manually canceled by the user. Immediate Or Cancel This instruction indicates that any portion of an order that does not immediately fill will be canceled. Fill or Kill This instruction indicates that if an order does not fully fill immediately, it will be canceled. For any inquiries contact us at...

For an introduction on API, first read What is API and High-Frequency Trading (HFT)? FIX API stands for Financial Information Exchange API. Like all other APIs, it is a set of communication protocols that help different systems communicate. However, FIX API was specifically designed for the transfer of financial data. In other words, it is much more optimized and dedicated to financial trading than other APIs which tend to be more broadly applicable. As such, FIX API yields much more efficient and faster results for traders. Phemex is one of the very few exchange platforms that actually offers FIX API. This...

API stands for Application Programming Interface. This is an interface that essentially allows two different systems to communicate with each other. It is akin to having two individuals that speak different languages with an interpreter in between. More specifically, the API takes the inputs or requests made by one system and applies it to the target system in a way that returns a useful response or action. In terms of a trading API, it interacts with a trading platform to efficiently execute specified operations. High-frequency traders, as the name implies, use powerful algorithms or systems to make incredibly large numbers...

A Take Profit order allows you to specify a price at which your orders will execute and close when the price is moving in a favorable direction. This helps you increase the chances of closing out a position while ensuring a profit. We recommend this type of order for two main strategies: As a risk-management tool to ensure a minimum amount of profits on existing positions. As an automatic tool to exit the market at the desired price without manually waiting for the market to place the order. NOTE: For a more advanced conditional instruction known as a Trailing Stop,...