How trade engine works? How cryptocoin trade engine works? Is there any open source project available other than buttercoin. I want to build a simple trade engine in ruby on rails for cryptocoins. what are the essential parts needed other than API?
You can code a trade engine in language like C++ or any other which ever is suitable for you. What actually happens in the back-end is an script keeps on repeating after particular interval for new trades or deposits that script can be coded in any language which can communicate with the database. Following is the example of a PHP script which checks for new trades and then update the database if any new trade took place: 

&lt;?
$sell = mysql_query("SELECT * FROM trades WHERE `From`&lt;&gt;`Type` LIMIT 1000000000000");
$num = mysql_num_rows($sell);
echo $num;
for ($i = 0; $i &lt; $num; $i++) {
$id = mysql_result($sell,$i,"Id");
if($id != 0)
{
    $trade = new Trade($id);
    $trade-&gt;GetEquivalentTrade();
    $trade-&gt;ExecuteTrade();
}
}
?&gt;