Crypto Trading Infrastructure: Exchanges, Orders, APIs, and Strategy Scripts
Summary
This beginner overview explains the components of automated trading in crypto markets. It distinguishes exchange accounts and their internal wallet, spot, and derivatives balances; exchange APIs and their access keys; trading pairs; and spot markets versus dated and perpetual contracts. It also explains order types, contract quantities, and how maker and taker roles depend on whether an order adds or removes liquidity.
The article then describes the roles of a trading platform, its historical-data backtester, and the script that sends orders through an exchange API. Examples use FMZ concepts to show how market and contract selection affect the instrument being traded, and how scripts can run on hosted machines using different programming languages. These are conceptual and platform-specific examples, not a trading strategy or performance study. The backtesting discussion notes that the simulated exchange set and supported pairs are limited; the infrastructure guidance does not assess exchange security or provide evidence that any trading approach is profitable.
Key ideas
- API keys authorize programmatic exchange access, so their permissions and handling affect account security.
- A spot instrument is identified by its trading pair, while a derivatives instrument also requires a contract type.
- Spot market orders and futures orders can use different quantity conventions.
- Maker or taker status depends on whether an order adds liquidity to the book or executes against available liquidity.
- A backtest replays historical data in a simulated environment and may support only a limited set of markets.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.