How to spot trade on OCMX

Spot trading on OCMX is a simple process once you’ve signed up for a OCMX account. Let’s take a look at OCMX’s classic exchange view and explore how to make a spot trade. You can find the trading platform by hovering over [Trade].

And clicking [Pro Version] on the OCMX homepage.

You’ll now see the Lite version trading view, which contains a few different sections of interest.

Let’s take a look at the most straightforward spot trade you can do: a market order. In our example, you want to purchase $1,000 (BUSD) worth of bitcoin (BTC). To do this, all you need to do is input 1,000 into the [Total] field and click [Buy BTC]. The exchange will deliver the BUSD immediately to the seller, and you will receive $1,000 (BUSD) worth of BTC.

    1. This option lets you choose the cryptocurrency pair you want to trade on the spot market. You don’t just have to buy cryptocurrencies with fiat, either. You can also exchange them for other coins and tokens on the spot market.
    2. Here you’ll see the chart view with customizable historical price data. Inbuilt into the window is TradingView, giving you a wide variety of technical analysis tools to use. If you want to learn some basic TradingView techniques, check out our guide here.
    1. The order book lists all of an asset’s open buy and sell orders organized by price. The green orders are buy orders, and the red are sell orders. When you make a market order to purchase an asset, you take the lowest price on offer. If your order still needs more volume to fill it, it will move up to the next lowest ask price. 
    2. This section is where you’ll create your buy or sell orders. You can see that it’s currently on the [Spot] section. Underneath, you can choose between [Limit], [Market], [Stop-limit], and [OCO] orders.

Advantages and disadvantages of spot markets

Every type of trading and strategy you’ll encounter has its advantages and disadvantages. Understanding these will help you reduce risk and trade more confidently. Spot trading is one of the more simple ones, but it still has strengths and weaknesses.

Advantages of spot markets

  1. Prices are transparent and only rely on supply and demand in the market. This aspect contrasts with the futures market that often contains multiple reference prices. For example, the mark price in the OCMX futures market is derived from other information, including the funding rate, price index, and Moving Average (MA) Basis. In some traditional markets, the mark price might also be affected by interest rates.
  2. Spot trading is straightforward to take part in due to its simple rules, rewards, and risks. When you invest $500 on the spot market in OCMX, you can calculate your risk easily based on your entry and the current price.
  3. You can “set and forget”. Unlike derivatives and margin trading, with spot trading, you don’t need to worry about being liquidated or getting a margin call. You can enter or exit a trade whenever you want. You also don’t need to keep checking your investment, unless you want to make short-term trades.

Disadvantages of spot markets

  1. Depending on what you’re trading, spot markets can leave you with assets that are inconvenient to hold. Commodities are perhaps the best example. If you spot purchase crude oil, you’ll have to take physical delivery of the asset. With cryptocurrencies, holding tokens and coins gives you a responsibility to keep them secure and safe. By trading futures derivatives, you can still get exposure to these assets but settle with cash.
  2. With certain assets, individuals, and companies, stability is valuable. For example, a company wanting to operate abroad needs access to foreign currency in the forex market. If they rely on the spot market, expenditure planning and incomes would be very unstable. 
  3. Potential gains in spot trading are much less than in futures or margin trading. You can leverage the same amount of capital to trade larger positions.

Closing thoughts

Spot trading in spot markets is one of the most common ways for people to trade, especially beginners. Although it’s straightforward, it’s always good to have extra knowledge of its advantages, disadvantages, and potential strategies. Apart from the basics, you should consider combining your knowledge with sound technical, fundamental, and sentiment analysis.

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