On BTC-E, you can see the recent trade history for the different currency pairs. For example right now you see these recent trades:

14.05.13 01:27  Sell    112.75 USD  4.77859 BTC     538.7860225 USD
14.05.13 01:27  Sell    112.76 USD  0.359638 BTC    40.55278088 USD
14.05.13 01:27  Sell    112.76 USD  0.122198 BTC    13.77904648 USD
14.05.13 01:27  Sell    112.76 USD  0.022195 BTC    2.5027082 USD
14.05.13 01:27  Sell    112.76 USD  0.0100155 BTC   1.12934778 USD
14.05.13 01:27  Sell    112.76 USD  1.20736 BTC     136.1419136 USD
14.05.13 01:27  Sell    112.76 USD  0.360915 BTC    40.6967754 USD
14.05.13 01:26  Buy     112.9 USD   1 BTC           112.9 USD

Shouldn't every trade of type "sell" match a trade of type "buy"? Or at least the amount of all recent sell-trades should match more or less the amount of all recent buy-trades? If you look at the history of the last 15 minutes right now, the amount of BTC in sell-trades is much higher then the amount of buy-trades. How can this be?

1 Answer 1


Most exchanges work with an order book. In this method, the two parties involved in the trade are slightly different.

The order book lists prices at which people want to buy and prices at which people want to sell.

You can see btc-e's order book on their homepage. Let's assume the following simple order book:

    person 1 wants to sell 3 BTC for 101 EUR/BTC
    person 2 wants to sell 1 BTC for 100 EUR/BTC
    person 3 wants to buy  2 BTC for  95 EUR/BTC
    person 4 wants to buy  5 BTC for  90 EUR/BTC

Note the ordering of the orders, it's on purpose. In all order books, the highers buy price is always lower than the lowest sell price.

Now, these people are passive traders (this is afaik not an official term), meaning that they are waiting for the price to reach a certain value in order to trade. Mostly, they do not need to buy/sell fast, but want to have a good price.

Then, there are active traders, that want to do their trades immediately. So, when I want to buy 1 BTC immediately ("at market price"), I will have to pay 100 EUR for it, as this is the best sell offer I can buy from. If I wanted to fast sell 1 BTC, I would get only 95 EUR for it, meeting the best buy order to sell at.

So in fact, when an active trader wants to buy 1 BTC, he actually creates a buy order for 1 BTC ar 100 EUR/BTC. This order will match the order from person 2, so they will trade. This means that the trade is initiated by the buy order from the active trader. For this reason, this trade will be logged as a buy trade.

Rounding up: Trades are logged according to the type of trade the active trader did.

Some things that are useful to keep in mind:

  • The bid/ask prices that most exchanges advertise, are the highest buy and lowest sell prices from the order book, respectively.
  • A buy trade will raise the lowest ask price (or keep it the same), while a sell trade will lower the highest bid price.

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