How to get the best price when buying or selling Cryptocurrencies
It is very important for you to execute the best trade prices when both buying your cryptocurrency and when selling your cryptocurrency. Since profiting from your investment will involve a purchase and a sell, this is doubly important! Doing so will make a significant difference in your total annual investment return and a very significant difference over the lifetime of your investing career. If you simply enter a buy order or a sell order, the exchange will put in a price for you that involves a margin which they keep. This margin is called "the spread." The spread is the difference between the bid and the ask price. The bid is the price at which an order currently exists to purchase the cryptocurrency at a given price. When you simply enter an order to sell, this is the default price at which your trade will transact. The ask is the price at which an order currently exists to sell the cryptocurrency at a given price. If you simply enter an order to buy, this is the default price at which your trade will transact. Using the ask price for a purchase would be like walking into a car dealership and just paying the sticker price; the price the dealership is asking you to pay. Don't you usually negotiate to get a better price? Well, this is no different.
You can see from the graphic above that there is often a significant difference between these two prices. It behooves you to do more than to just accept the price with the spread included.
The approach that I use is very siple. If I want the trade to execute quickly, then I use the highest bid price when I am buying or the highest ask price when I am selling. This in effect puts you into first place to execute the trade without the spread margin included. Keep in mind that market prices move, so the price may move away from the price you entered. But, more often than not, you get the price you request in this manner within a short period of time. Now, if you would like to get an even better deal and don't mind waiting and possibly not getting the cryptocurrency if your price is not met, then you can choose a price that is somewhat less than the highest bid when you purchase or somewhat higher than the lowest ask price when you sell. Basically you just move down the bid column or the ask column.
By doing this simple maneuver each time you place a trade, you will get a slightly better price each time you transact. When you consider that this small difference will be compounded every time you make a trade, you can understand how significant the impact will become over time.