Bear markets may require different trading strategies than bull markets. Here are three advanced methods traders use on Okcoin. 🔍
TL;DR
- Crypto is, for now, in a bear market
- Navigating a bear market may require different strategies than a bull market
- Experienced traders use three advanced order types on Okcoin: trigger, trail, and TWAP orders
Advanced trading methods
There’s no doubt crypto is in a bear market – for now. To adapt to the specifics of a bear market, traders might need to adapt their strategies. Having a range of different order types helps for that.
There are, first, the three most common order types: Market, limit, and stop orders. But experienced traders who develop sophisticated strategies tend to also use these more advanced order types:
- Trigger orders
- Trail orders
- TWAP orders
Never heard of them but keen to improve your trading skills? Let’s dive in. 👇
What’s a trigger order?
Scenario: Imagine Bitcoin is trading at $21,000, and if it reaches $22,500, you think it will go higher.
Trigger orders automatically execute another order type when a certain target price is reached. This follow-on order can be a market or limit order.
In this scenario, you would have to select a trigger order and enter $22,500 as the trigger price. If bitcoin then reached $22,500, the trigger would activate and your follow-on order would be placed. Traders who think the rally will continue with no retracement will usually place a market order; those who think the market will retrace slightly will usually place a limit order. Here the trigger price is $22,500 and the buy limit order could be set at $22,225. If the price did retrace to $22,225, the order would be executed.
Check out our Help Center to read more about trigger order.
What’s a trail order?
Scenario: Imagine Bitcoin is trading at $21,000, and if it reaches $21,500, you think it will go higher – but you also want to limit any downside.
A trail order is a type of stop order, with a twist: The stop price changes as your order becomes more profitable.
In this scenario, you would have to select the trail order and enter $21,500 as the trigger price. With a 2% trail price, a moving stop order would be initially set at $21,070. If the price reaches $23,000, your stop order would rise to $22,540. If the price falls, the stop order would remain at $21,070. That’s why it’s called a 2% trail order. The order type trails the highest price since the order was placed and is executed if the price falls 2% or more from the highest price.
Check out our Help Center to learn more about trail orders.
What’s a Time-Weighted Average Price (TWAP) order?
Scenario: Imagine you want to place a large sell or buy order, but don’t want to move the market or increase the entry price.
A time-weighted average price (TWAP) order is a trading order strategy that helps you to buy or sell to attain an average price. Each TWAP order consists of smaller sliced orders placed at regular intervals.
To place one, select TWAP as an order type and fill-in the following:
- Total Amount: This is the total amount you want to buy or sell (e.g., 1 BTC or 1 ETH).
- Price Variance: This is how high or low – in percent – you are looking to buy or sell compared to the current price. Price variance between 0.01% to 1% are acceptable options.
- Sweep Ratio: This is how large each sliced order can be based on the price variance range. The higher the sweep ratio, the more liquidity orders take from the order book. You can set the sweep ratio from 0.01% to 100%.
- Order Limit: This is the maximum size (in base currency) of one sliced order.
- Price Limit: This is the maximum buy or minimum sell price (in quote currency) of each sliced order.
- Time interval: This is the time between the placement of each sliced order. You can set intervals from 5 to 120 seconds.
Check out our Help Center to learn more about TWAP orders.
The importance of trading fees
On top of order types, trading fees are a key element in trading, especially during a bear market. That’s why we make a special effort to offer some of the lowest trading fees in the industry.
