Cryptocurrency Trading: Exchanges vs. Terminals

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What a time to be alive! Cryptocurrency trading has never been easier; thanks to crypto trading terminals such as Superorder. While the development teams work tirelessly to innovate fresh ideas and deliver new features that improve the user experience, we wish to broaden your understanding between two confusing concepts in crypto trading; exchanges and terminals. Let’s dive right to it.

Cryptocurrency Trading is Growing

Cryptocurrency trading is a relatively new concept to more than two-thirds of the world’s population (if we are practical). It started as this great enigma that only nerds and hackers in the deep web knew about. Today, cryptocurrency trading is proving to be the future of digital payment systems. Several multinational corporations such as Microsoft, Subway, and even AT&T accepting cryptocurrency as a form of payment in one way or another. According to CNBC, 8% of Americans are invested in cryptocurrency. Not bad for an asset that’s been around for only 10 years!

There are two types of crypto trading platforms; exchanges and terminals. If you plan on jumping on board the crypto trade wagon and become a professional trader, you need to know the differences between the two. They are both closely related concepts, but the devil is in the details.

Cryptocurrency Exchanges Explained

Without getting too technical, a cryptocurrency exchange is defined as a web-service that allows users to exchange their cash into a cryptocurrency and vice versa. It is the most basic platform whose main purpose is to exchange fiat currency such as the US dollar or the GB Pound into a cryptocurrency such as Bitcoin. Plus, it provides for trading crypto coins between themselves. 

While some crypto exchanges are programmed only to accept the exchange of digital coins, others allow only listed fiat cryptocurrencies. With such, you can exchange your currencies in supported pairs such as BTC-USD (Bitcoin to US dollars) or ETH-EUR (Ethereum to Euros).

There are three main types of cryptocurrency exchanges; Centralized, Decentralized, and Hybrid.

I. Centralized Cryptocurrency Exchanges (CEX)

This type of exchange, also known as CEX, holds similarities to the traditional stock exchange platforms. The crypto-world uses the term “centralized” to mean “a third party.” In such trades, the currencies to be traded are held by a custodian, which could be a trusted bank or middleman. They offer more liquidity and functionality compared to the rest. The biggest issue facing CEX is the vulnerability to hacking.

II. Decentralized Cryptocurrency Exchanges (DEX)

Unlike centralized cryptocurrency exchanges, DEX does not rely on middlemen. The buyer and seller tend to stay true to the independent, pure philosophy of the cryptocurrency industry. DEX facilitates peer-to-peer trades by letting buyers and traders transact directly with each other. They are less popular than CEX due to lower liquidity. They are, however, immune to hacking.

III. Hybrid Cryptocurrency Exchanges

Hybrid cryptocurrency exchanges are the next generation of cryptocurrency exchanges. According to Medium, the hybrid cryptocurrency exchange is a co-existence between CEX and DEX that will bring the harmony that currently lacks in both exchanges. It is still in the early stages of inception and will in the future, fuse the liquidity and functionality of CEX with the security and privacy of DEX. 

Cryptocurrency exchange web-services are stripped down to offer only the basic exchange services. Apart from exchanging currencies, some crypto platforms also allow you to view simple charts and compare different rates. But that is the end of the line. As a rule of thumb, cryptocurrency exchanges are not fully operational trading platforms on their own. That is where terminals come in.

Cryptocurrency Terminals Explained

Cryptocurrency terminals are virtual platforms that support the actual trading between cryptocurrencies, not just the exchange of one currency to another. These terminals use special scripts of the program to illustrate the current cryptocurrency market situation in real-time. Such scripts focus on optimizing the interaction between the users/traders with the cryptocurrency markets. Therefore, they provide more information such as a wider choice of orders and advanced tools such as the ability to place simultaneous deals across multiple cryptocurrency platforms.

Superorder is one such terminal, with useful features such as hidden orders for anonymity and extended chart time frames which are powered by TradingView.

Differences between Crypto exchanges and terminals

I. Orders and Markets

Any trading market is defined by both the markets it operates in and orders it has. Cryptocurrency exchanges, being mere platforms for exchanging one currency for another, only offer two order options:

  • Market buy/sell – which are transactions that are meant to be transacted quickly at the given market price.
  • Limit buy/sell – which is the maximum and minimum price a trader is willing to buy or sell.

Crypto terminals offer a wider array of orders which include conditionals and trailing stops. Additionally, crypto exchanges mostly serve their home markets while crypto terminals are global, granting you access to multiple exchanges right from a single trading platform.

II. Analytical Capabilities

Crypto exchanges revolve around basic transactions, which results in basic charts and linear timeframes that are inconclusive for responsible trading. Crypto-terminals, on the other hand, possess advanced analytical capabilities that result in more detailed charts. This paves the way for simultaneous trading of cryptocurrencies across multiple platforms.

III. Personalization

Crypto terminals possess more advanced tools compared to those offered by exchanges. Traders, therefore, get the convenience of personalizing the features to their preference. Such include the ability to self-tune certain parameters, set up different wallets, and to self-tune the built-in portfolio trackers.

Exchanges, on the other hand, have very few basic features; most of which are needed for successful trading. Traders, therefore, have little control of what features they get to turn on or off.

IV. Integration

Crypto exchanges usually come in the form of a web-service. Crypto terminals, on the other hand, come in different forms including a web-service, a mobile app, or a computer program. This relatively gives terminals the upper hand with regards to mobility.

Crypto Exchanges vs Terminals

Crypto Trading with Superorder

From the above discussion, it is clear that terminals offer better trading experience compared to exchanges. Moreover, Superorder trading terminal brings you the following benefits:

  • Stronger analytical tools, such as advanced technical indicators and order types.
  • A strategy builder that works by way of drag and drop.
  • A friendly interface that is simple to use.
  • Powerful portfolio tracking that helps you stay on track with your current assets.

Don’t just take our word for it, explore Superorder today and learn how to make your first crypto trade with us!

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