Is it too soon to talk about Crypto yet?

[Fuddyduddy1952]

I appreciate all the information, but it's way over my head. I like simplicity which is why my one bitcoin example.
Gold for example (I don't own any...just what I looked up) right now is about $3,000/ounce which is what you pay, then if you sell it a month later and it's now $3,100/ounce you would receive 95% because of commission. So you paid $3,000 and a month later receive $2,945. If instead gold went to $3,200/ounce you would get $3,040 so you made $40.
That's simple & easy to understand.
Can cryptocurrency (bitcoin specifically) be explained like that?

 

[MinnesotaEric]

I appreciate all the information, but it's way over my head. I like simplicity which is why my one bitcoin example.
Gold for example (I don't own any...just what I looked up) right now is about $3,000/ounce which is what you pay, then if you sell it a month later and it's now $3,100/ounce you would receive 95% because of commission. So you paid $3,000 and a month later receive $2,945. If instead gold went to $3,200/ounce you would get $3,040 so you made $40.
That's simple & easy to understand.
Can cryptocurrency (bitcoin specifically) be explained like that?

Yes, if you sell Bitcoin at a higher price than you purchased it, your gain is reflected in your account balance.

 

[Fuddyduddy1952]

Yes, if you sell Bitcoin at a higher price than you purchased it, your gain is reflected in your account balance.

I understand that's true with anything. What I'm trying to understand is watching bitcoin live streaming which I did just now and every second the price is fluctuating up and down.
1) what does one coin cost me??? When I buy it...at what "second" is it that I pay???
2) If it's, say, $82,240,34, is THAT what I pay?
3) If it goes to $82,528.55 and I sell...what's the "commission"? Did I make a profit?
It's so confusing because it can be $82,528.55 and a minute later be up or down $500!

 

[MinnesotaEric]

I understand that's true with anything. What I'm trying to understand is watching bitcoin live streaming which I did just now and every second the price is fluctuating up and down.
1) what does one coin cost me??? When I buy it...at what "second" is it that I pay???
2) If it's, say, $82,240,34, is THAT what I pay?
3) If it goes to $82,528.55 and I sell...what's the "commission"? Did I make a profit?
It's so confusing because it can be $82,528.55 and a minute later be up or down $500!

The same thing happens with equity prices, bonds, options, commodities.

Again, learning about the types of orders matters.

In equity trading, common order types include market orders for immediate execution at the best price, limit orders to buy or sell at a specific price, and stop orders to trigger a trade when a certain price is reached, such as stop-loss or stop-limit orders.

Here's a more detailed breakdown of common equity order types:


Basic Order Types:

• Market Order:
  This order instructs the broker to buy or sell the stock immediately at the best available price.
  
  
• Limit Order:
  This order allows you to specify a price at which you're willing to buy or sell the stock.The order will only be executed if the stock price reaches or exceeds the limit price (for buy orders) or falls to or below the limit price (for sell orders).
  
  
• Stop Order:
  This order becomes active only when the stock price reaches a specified trigger price.Once the trigger price is reached, the stop order becomes a market order (for stop-loss) or a limit order (for stop-limit).
  
  • Stop-Loss Order: A stop-loss order is used to limit potential losses by automatically selling a stock when the price falls to a specified level.
    
    
  • Stop-Limit Order: This order combines the features of a stop order and a limit order. The stop price triggers the order, which then becomes a limit order to be executed at the specified limit price or better.
    

Advanced Order Types:

• Trailing Stop Order:
  This order allows you to set a stop-loss price that moves up or down with the stock price, providing a dynamic way to protect profits or limit losses.
  
  
• Bracket Order:
  This order type is used in intraday trading to limit losses by placing a target price and a stop-loss price along with the main order.
  
  
• Cover Order:
  This order type is a market order or limit order placed along with a stop-loss order, used to minimize losses in intraday trading.
  
  
• Take Profit Order:
  This order specifies a profit target, at which point a stock would be sold and the trade would close.
  
  
• Fill or Kill (FOK):
  This order requires immediate and complete execution of a trade or its cancellation, and is typical of large orders.
  
  
• Good-til-Canceled (GTC):
  This order remains open until it's filled, canceled, or for equities, if the stock undergoes a corporate action.
  
  
• Immediate or Cancel (IOC):
  This order gets executed immediately. Any portion of the order that cannot be fulfilled immediately gets canceled.
  
  
• Hidden Order:
  This order type allows traders to place orders that are not visible to other market participants.

 

[Fuddyduddy1952]

I really appreciate all the detail but just hoping for a simple explanation.
Bitcoin price changes every second.
I want to buy one coin. What do I pay? Where/how.
I want to sell. What do I get?
It can't be as simple as looking at a computer screen then NOW! and I paid $82,234.55
Then I'm watching and see $83,234.55 then NOW! and I just made $1,000.

 

[rumwrks]

I want to sell. What do I get?

All to often hung out to dry... (and yes I know Changelly isn't the "best" exchange but coinbase and the rest pull the same games).

 

[quicksandfarmer]

All to often hung out to dry... (and yes I know Changelly isn't the "best" exchange but coinbase and the rest pull the same games).

View attachment 3168885

I'm sure contacting the crypto regulators will get that sorted out in no time.

Oh wait.

 

[rumwrks]

I'm sure contacting the crypto regulators will get that sorted out in no time.

Just call 1-900-bitcoin[1] and you're good to go is what I heard...

[1] Not a real number.

 

[quicksandfarmer]

I really appreciate all the detail but just hoping for a simple explanation.
Bitcoin price changes every second.
I want to buy one coin. What do I pay? Where/how.
I want to sell. What do I get?
It can't be as simple as looking at a computer screen then NOW! and I paid $82,234.55
Then I'm watching and see $83,234.55 then NOW! and I just made $1,000.

When you buy any kind of security, first you have to put money on deposit with a broker. Then you enter in a buy order and specify the number of shares. The broker executes the purchase at whatever the price happens to be at the moment of purchase and takes that much money out of your account. If you don't have enough money in your account the purchase fails. When you go to sell, the broker sells at the current market and credits your account.

The broker doesn't do this for free, how he gets paid depends on what's customary in that market. In some markets he gets a flat fee per transaction or per share. Sometimes he takes a percentage. Sometimes there's a spread between buying and selling prices. I have no idea what is customary with crypto.

It used to be customary that the broker would execute the purchase and then wait before recording it to the customer. If the price went down or stayed the same the trade would go through. If the price went up the broker would record the original trade to his own account and then sell it to the customer at the higher price. This is called "front-running" and is now illegal in US stock markets. I don't see how front-running could be prevented in crypto markets.

 

[MinnesotaEric]

I really appreciate all the detail but just hoping for a simple explanation.
Bitcoin price changes every second.
I want to buy one coin. What do I pay? Where/how.
I want to sell. What do I get?
It can't be as simple as looking at a computer screen then NOW! and I paid $82,234.55
Then I'm watching and see $83,234.55 then NOW! and I just made $1,000.

Quicksandfarmer offered a very good description.

The price bouncing around is a live spot price. Every time there is a transaction the price of the transaction is published as a "print" (going back to when records of transactions were literally printed on a ticker tape). The price bouncing up and down can seem very arbitrary to anybody who doesn't know what they are looking at.

Here is a educational video that I hope will help you understand.