How to use LIMIT vs. MARKET Order Placement Strategy
Introduction
In the world of trading, orders are the backbone of every transaction. Two of the most common order types used by traders are "Limit Orders" and "Market Orders." In Vestinda, we offer a unique take on Market Orders, which involves placing a Limit Order on the exchange but with a strategic twist to enhance the likelihood of order execution. In this tutorial, we'll delve into the concepts of Limit Orders and Market Orders, and how they work within the Vestinda platform for the Order Placement Strategy.
LIMIT Order Placement Strategy
What is a Limit Order?
A Limit Order is a type of order where a trader specifies the price at which they want to buy or sell an asset. Unlike Market Orders, which are executed immediately at the current market price, Limit Orders only execute when the market reaches the specified price or a better one.
How LIMIT Order Placement Strategy Work in Vestinda?
In Vestinda, when you set your Strategy to use a Limit Order, you are essentially instructing the platform to execute your trade at a specific price or better. Our platform will monitor the market conditions, and when the condition of the Strategy is activated, the Limit Order is triggered at a price in between the best BID and best ASK in the OrderBook. If the market does not reach your specified price, your order is canceled and it will be placed again in the orderbook at a new price according to how the market moved.
MARKET Order Placement Strategy
What is a Market Order?
A Market Order is an order to buy or sell an asset immediately at the current market price. Market Orders are executed quickly, ensuring that you enter or exit a trade promptly. However, the exact price at which the Market Order is executed may differ slightly from the current market price due to market fluctuations.
How Does MARKET Order Placement Strategy Work in Vestinda?
In Vestinda however, we offer a unique approach to the MARKET Order Placement Strategy. When you select the Order Placement Strategy to be MARKET, the Strategy will still place a Limit Order on the exchange, but with a strategic twist. Instead of blindly executing at the current market price, Vestinda's Market Order calculates a price that maximizes the chances of success for filling your order. This price is somewhere on top of the Order Book on the right side (BID or ASK depending if the strategy enters or exits a Position).
Our system analyzes the market conditions and factors in various variables to determine the optimal price for your order. This calculated price helps increase the probability of your order being filled successfully while avoiding unfavourable price slippage in illiquid markets.
Key Takeaways:
- Limit Orders allow traders to specify the exact price at which they want to buy or sell an asset, ensuring precise control over their trades.
- Market Orders in Vestinda are designed to strategically place Limit Orders on the exchange to maximize the chances of successful execution while minimizing price slippage.
- Vestinda's approach to Market Orders combines the speed of Market Orders with the precision of Limit Orders, offering traders a powerful tool for executing their trades.
In conclusion, understanding LIMIT and MARKET Order Placement Strategy is essential for effective trading on the Vestinda platform. With our innovative Market Order system, traders can enjoy the speed of market execution while maintaining control over their trade prices, ultimately improving their trading experience.