How to place orders like a pro. 🎯
Building trading bots taught us many things about how exchanges work.
Here’s how you can game the order book to get the best price and be sure your order will be hit.
Only use Market orders when you’re in a hurry.
Market orders execute at the current best price. If there isn’t a lot of Bitcoins in sale in the order book and you place a big market order, you’ll buy the most expensive ones.
However, if you place a limit order, you set the price you’re going to buy at.
If you place your order close enough to the current price, you’re almost sure that the constant zigzag of the price will touch your order. With a market order, you don’t set the price you get.
Place your orders before walls in the order book.
When there’s a lot of orders at a particular price (a possible resistance/support), forms a wall. It takes a lot of volume to break a wall.
The probability that the price will evolve between the walls is higher than beyond them. Therefore, the best price to place a limit order is just before a wall.
After your order gets filled, a lot of volume will be needed to break the wall. It protects your position.
Never put a round order price.
The third, less known rule is to never put a round order price. The reason is that most traders place their orders at round prices. At a non-round price, you’ll have less competing orders.
Here’s all you need to know to place limit orders!
Don’t hesitate to send me an email if you have knowledge I could add to this article.
Alex Toussaint - firstname.lastname@example.org
I'm the co-founder of Kaktana. Kaktana makes it simple to build automated technical-analysis strategies on crypto markets.
We're helping you to leave the computer work for the computers.