[TP Academy⑬] "Pause for 1 second before pressing the buy button"... The secret revealed by the quote window

Amid the hustle and bustle of the cryptocurrency market, for those indecisive investors, “TokenPost Academy” with 8 years of on-site experience will provide genuine investment standards. We invite you to embark on a seven-step master class journey to challenge the top 1%, based on “data” rather than “feelings,” and “strength” rather than “luck.” [Editor’s Note]

“Why is the transaction price 102 yuan when I pressed the buy button at 100 yuan?”

This is a common issue faced by impatient investors who see a surge in a coin’s price. The reason lies in habitually using a “market order(Market)” to sweep the order book as soon as they open the exchange app. Even spending just 1 second to confirm the “order book(Order Book)” before pressing the buy button can make a difference in returns.

◆ Makers(Maker) vs Takers(Taker): Which one are you?

Exchanges treat these two types of clients differently.

Maker(Maker): Refers to placing limit orders(Limit). They add liquidity to the order book by placing limit orders, thus favored by exchanges. They benefit from lower fees and sometimes even rebates.

Taker(Taker): Refers to immediately consuming existing orders on the order book with market orders(Market). They consume liquidity, resulting in higher fees.

If you frequently engage in short-term trading but only use market orders to buy? That means a significant portion of your profits is lost as fees. If you’re not in a hurry, develop the habit of using limit orders (placing orders).

◆ Spread and Slippage: Invisible costs

Looking at the order book, you’ll notice a gap between the sell price (sell order price) and buy price (buy order price). This is called the “spread(Spread).” For low-volume altcoins, this gap can be very large. This often results in starting with a loss of -2%, -3% immediately after buying and selling again.

Even more frightening is “slippage(Slippage).” When the order book is very thin, placing large market orders can push the price up or down, causing trades to execute at prices far above or below expectations. This isn’t because the price drops sharply right after I buy, but because I consume the entire order book, making the purchase more expensive.

◆ “The order book is the heart of the market”

If charts record the past, then the order book is the lively, beating heart of the present. Use your eyes to confirm whether the buy wall is solid and whether sell orders are emerging. Before pressing the buy button, check if the spread is tight. This is the first habit of “smart traders.”

👉 [Practical Trading] From the proper use of limit orders and market orders to professional trading strategies like stop-limit orders(Stop-Limit) and OCO orders. Please practice in TokenPost Academy’s “Phase 4: The Trader” course.

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