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Why basis points matter?

Common mistakes when trading in cryptocurrency markets. Introduction to the order execution costs and true liquidity.


Resume

  • Uninformed trades are primarily initiated by retail investors or by financial institutions that either execute retail orders or hedge their crypto exposure to retail buyers/sellers

  • Slippage is of low importance for uninformed traders and may be irrelevant to the order execution strategy

  • Limit orders don’t guarantee execution and may involve additional market risk as well as hidden losses

  • Market impact worsens final execution price when you use limit orders or a series of market orders

  • Liquidity aggregators can be a powerful solution for uninformed traders as they tend to offer better exchange rates and exclude non-existent liquidity from fraudulent crypto exchanges

  • The internalisation of the client trading flow reduces market impact and may improve the order execution price

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#cryptotrading #bitcoin #ethereum

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