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Pardon my Ignorance but can somebody explain the basics

Of how trading (Bid Buy/Bid Sell) works of the common exchanges

www.mtgox.com www.btc-e.com

Aslo some of the common ways people or conditions suppress or raise the price of LTC & BTC

Thanks In Advance

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Currency exchanges are implemented through programs called order-matching engines. When a new order is entered, a buy order for example, the matching engine checks to see if there is a match on the other side, a sell order at the right price.

Bid is the price a user is willing to pay and Ask is the price at which a seller is willing to sell. The difference between the two is called the spread. Most exchanges try to minimize the spread. The price often quoted is midway between the highest bid and the lowest ask.

Here are some examples of matching engines: https://github.com/jordanbaucke/Limit-Order-Book

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What are some of the common ways to manipulate the market ?? –  BitCoin New Guy Jan 3 '13 at 8:51
    
Actually the "price often quoted" is the "last transaction" price. –  Lohoris Jan 3 '13 at 9:02
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SO people can do trades of .0001 BTC with a lower ask price to keep the SPOT price down ? There is a BOT doing that on BTC-e for BTC & LTC –  BitCoin New Guy Jan 3 '13 at 9:37
    
Interesting, are you sure its a bot? What are there transaction fees? –  Kinnard Hockenhull Jan 3 '13 at 16:16
    
.5% ...It keeps doing .001 BTC for a sell price straight after lats trade & at a lower price hmmm –  BitCoin New Guy Jan 3 '13 at 21:01
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