In the crypto market, there are differences between spot market and derivative market. Derivative market is more volatile, riskier, but also more profitable.
There are orders that are only available on spot market, there are also those that are only available on derivative market.
Limit order
Limit is order with a market execution type determined by the trader. This type gives traders the freedom to take positions in the best market price range and estimate periodic fluctuations in market movements.
- the position will be fixed, for example if you take a price position of 1200, then when settlement, the position remains the same.
- suitable for Daytraders or seasonal traders.
- suitable for certain market conditions, for example long bullish/bearish to get maximum profit.
Market order
Market is order with an automatic execution type, adjusting to market price fluctuations. This type provides freedom, especially for long-term traders, regardless of market conditions.
- positions are dynamic, when settlement, the position price is executed automatically, changing based on the current market price.
- suitable for Positioned traders or long-term traders.
- need a TP and SL strategy to anticipate liquidation.
Scaled order
Scaled is order with a certain price range. This offers control over order distribution and diversity due to the flexibility of executing multiple position limits in the price range.
- minimal risk because the position is in the price range low price - high price determined by the trader.
- it is best when market sentiment is neutral because market price movements are stable.
- Multiple order support allows traders to take long and short positions simultaneously.
- advanced settings, for example more orders and quantity when the price or rate goes up/down.
TWAP
TWAP is a time-based order. It allows placing separate orders at regular intervals to execute orders in a specified manner setting a duration of several minutes - several hours, until the validity of the expiry period or the order quantity is filled.
- suitable for flash orders with large transaction quantities at certain market moments.
- minimizes the risk of losing more assets because the order will stop at the expiration time, not from the TP/SL setting.
- allows random orders but does not guarantee full execution under certain market circumstances.
Iceberg
Iceberg is order strategy by dividing large orders into small batches and placing them gradually. Simply, large transactions are used for several order strategies, fast execution, or fixed prices with limit order.
- diversification of positions because orders are executed in several positions.
- minimize the impact of significant market losses.
Market differences
Derivative market has several market types and these differences will influence which typical orders are suitable.
For example, futures market is a prediction-based market and is based on a certain time period, for example predicting the price of Bitcoin or Ethereum for the next 1 month, so the market only presents positions for the specified time duration. This allows traders to conduct more in-depth market research and analysis before placing an order.
In other markets, arbitrage only recognizes limit and market orders. This market takes two different positions in the price range in two different markets (spot and derivative) on the same token. Arbitrage market tends to be slow and profits are not suitable for small assets.
Notice
For informational purposes only. Trading involves high risk investments. Consult relevant professionals before starting any investment activity.