A cryptocurrency is a digital asset designed to facilitate peer-to-peer financial transactions and smart contracts on the internet in a decentralized manner.

A fiat currency has no intrinsic value and is established as legal tender by a government. Examples include the US Dollar (USD) and Euro (EUR).

In order to trade one currency for another, there must be a market (also known as a "currency pair") linking both currencies. In a currency pair, the price indicates how much of the quote currency is required to buy one unit of the base currency. For example, a price of 1,000 USD for BTC/USD means that 1,000 USD is required to purchase 1 BTC.

The first currency in a currency pair is called the base currency. For example, in the currency pair BTC/USD, BTC is the base currency.

The second currency in a currency pair is called the quote currency. For example, in the currency pair BTC/USD, USD is the quote currency.

Each tradable currency on Kraken has its own minimum order size. An order placed with a volume below the minimum order size will be rejected.

A limit order will buy (or sell) at a pre-specified price or better. A limit order can be maker or taker depending on whether it crosses the order book or not.

A market order will buy (or sell) at the best average market price. All market orders are taker.

A maker (not to be confused with a market order) is a limit order that is not immediately matched or filled with an existing order on the order book. Makers add liquidity to the order book.

A taker is a market or limit order that is immediately matched or filled with an existing order on the order book. Takers remove liquidity from the order book.

A stop loss order is typically used as a closing order to limit your losses or lock in your profits on a long or short position. But they can also be used to open a position.

A take profit order can be used to set a target profit price on a long or short position. The profit price can be set in terms of absolute price or as a percentage. As with stop orders, take profit orders can also be used to open positions.

Open orders can either be “touched” or “untouched”. An "untouched" open order is an unfilled order. A "touched" open order is an order that is partially, but not completely, filled.

When a stop loss limit’s stop price or take profit limit’s profit price has been met and the order becomes active, the order will be in the new and open order section with the status of ‘triggered’ until the volume is filled or the order is cancelled by the client.

On Kraken Terminal the order will be visible in the Orders section with both prices visible.

When trading using the API, you will not see a ‘Triggered’ status. The misc flag would be either ‘stopped’ for stop loss or ’touched' for take profit.

An order can be "partially" or "fully" filled. To fill a buy or sell order is to match it with one or more orders of the opposing type. Buy orders are filled by matching with sell orders; sell orders are filled by matching with buy orders.

A completely filled order will be listed as "closed".

A cancelled order is an order that has been withdrawn from the order book without being fully filled. A cancelled order will either be untouched or partially filled.

The order book is a list of unfilled buy and sell limit orders. It is used by an exchange to fill market orders at the best available price.

Kraken operates on the Central Limit Order Book (CLOB) style, where orders are matched based on Price/Time priority.

Here's an example:

To view the Order Book, sign in to your Kraken account and navigate to the Trade tab. Under the New Orders tab you can click on Order Book. 

Slippage is the difference between the price that a trade is expected to cost and the actual price when the trade executes. This can be caused by a market order being placed and the price changes in the time between the order being created and executed. It will also happen when an order is large enough that it is split between many trades in the order book. To protect you from large slippages, we offer a Fat Finger warning when filling an order form or a confirmation window with the guaranteed price when using Instant Buy.

For example, using the above image of an order book, if someone placed a market buy of 1.645 BTC  the market price would display as €3,155.6, however the average price paid would be €3,156.96.

An order listed on the sell side of the order book.

An order listed on the buy side of the order book.

The Bid/Ask Depth represents the cumulative volume of buy and sell orders at a particular price. The bid depth at a given price is the cumulative volume of current buy orders on the book at that price or higher, while the ask depth at a given price is the cumulative volume of current sell orders on the book at that price or lower.

The difference in price between the highest bid and the lowest ask on the order book.

The bid/ask spread chart available for Kraken markets only shows the spread between the highest limit buy order and the lowest limit sell order (plotted over time). A market order will fill in this gap if there are matching market orders of the opposing type sufficient to fill it. Otherwise it will fill, at least in part, using limit orders of the opposing type.

Here's an example from the BTC/USD-market:

See: kraken.com/prices/orderbook

A visual representation of the demand and supply at different price levels. The bid/ask depth available for Kraken markets only shows the bid and ask depth of limit orders on the order book.

Here's an example from the BTC/USD-market:

See: kraken.com/prices/orderbook

A term that describes the amount of activity on a market. High liquidity means a high volume of activity in a market where lots of parties are willing to take the other side of a trade.

A market’s volatility is its likelihood of showing rapid and unpredictable price movements.