As a convenience to our users qTrade provides an estimate of your current account balance, converted into BTC, USD, and possibly other currencies in the future.
User account page: https://qtrade.io/settings/account
Although currency conversion seems simple, there are a lot of different ways of considering the true price of an asset - so knowing how we calculate these estimates can be important if you're seeing fluctuations in your estimated account balance.
Some price estimation methods:
- Use the last trade value on the market
- Use a moving average of trades on the market
- Use the best bid price (what we currently use)
- Use the best ask price
- Use the middle (bid + ask / 2)
- Composite of the above, but using values from other exchanges
All of these methods have substantial flaws. For example, often it might be best to lookup prices on other exchanges to get a consensus value - but some of the assets we list can only be found on qTrade.
Additionally, if you want to use a computed value, like moving average, people may find it confusing why their account estimated value is increasing/decreasing, especially if there is a short term market move in the opposite direction.
How we estimate values
For most currencies we convert the asset to a BTC value estimate, based on the current best market bid. The best bid is the best available offer for the market currency. For the NYZO/BTC market shown below the best bid is 0.0004252
Best market bid shown in red box
We'll do a simple example with this data:
- Imagine your account holds 500 NYZO
- Current best market bid on NYZO/BTC is 0.0004252 BTC per NYZO
- The estimator calculates your NYZO's estimated BTC value: 0.0004252 × 500 = 0.2126 BTC
- The estimator calculates your estimated USD value: 0.2126 BTC x [Current BTC/USD price]
Best bid estimation benefits
- it provides a reasonable indicator for how much you might get if you sold your funds right now
- We always have the data to make this calculation and update it instantly
- It is fairly easy to understand since the estimate always moves up/down with the market
Best bid estimation issues
- The current best bid may not be large enough to cover your entire balance. So if you immediately sold 500 NYZO (placed a market order) your average execution price could be below the best bid
- Different exchange orderbooks may have a different price than qTrade's, so this estimate may or may not be a pure reflection of the global market
- You may be able to sell your funds at a higher price (closer to the best ask)
- Large spreads can create unflattering estimates if you market buy
I bought $25 of XYZ and now my account balance estimate shows a much lower number. What happened to my funds?
If you immediately bought XYZ you probably bought at the ASK price. The estimator is based on the best BID, and the BID will always be lower than the ASK. Lets imagine a simple example:
- The CRUZ/BTC market's best ASK is 200 satoshis and a best BID is 100 satoshis
- You deposit $25 of BTC and purchase CRUZ @ 200 satoshis
- The balance estimator will show your balance as $12.50, because the BID is half of what you paid
This can be frustrating if you don't understand how the estimator functions, but is still an accurate result. If you were to turn around an immediately sell the CRUZ purchased in this way you would expect to get around $12.50 worth of BTC.