Do you use a market order?
While market orders are ideal for hiding your position from other traders, 3Commas doesn't place them to exchange beforehand, which means the price should reach your Take Profit condition to trigger it. We monitor it in real-time, but we use BID or ASK prices instead of the LAST price:
- The BID price is the price of the first buy order on the exchange's order book.
- The ASK price is the price of the first sell order on the exchange's order book.
- The LAST price is the price of the latest trade that happened on the exchange, be it a buy or sell.
You see LAST prices on the chart
The confusion here is that BID price is often lower than LAST, and the ASK if often higher than LAST.
Still, these prices are the best your market take profit can get because exchanges execute market orders:
- Against buy order book when you're closing the long trade by selling coins. Considering this, we use BID price for tracking price for the take profit on long deals.
- Against sell order book if you're closing short trade by buying coins. So we use ASK price while it comes to tracking take profit on short trades.
- Conditional order to sell coins use BID price, and conditional orders to buy coins use ASK prices.
Here's how BID can differ from LAST
When you see $50 on the chart, the first BID order might still be at $47. Assume there is a BID order at $40, and someone buys everything up to $50 using one big market buy, but no one places a buy order higher than $40. Even the price on the chart is $50, the BID price is still at $40.
That's an exaggerated example, but similar things happen all the time, especially on low volume coins and timeframes like 1 minute. Below is a 1-minute chart's fragment where you can see the LAST price reaches 19.45. The BID price here will be below 19.40, close to 19.36.
Open any market on the exchange and compare charts with order books to see the difference, especially on sharp price moves.
Use limit orders if you want to catch all price peaks
The only way to avoid skipping such price spikes is to use limit orders. They're going to the exchange order book beforehand, so when someone executes a big market order, it'll take your limit order too.
Do you use trailing take profit, trailing buy, trailing sell?
Trailing orders execute at the market rate, so the same thing about the BID and ASK prices apply. Please see the explanation above.
You need to disable trailing features and use limit orders if you want to avoid skipping trades.
Do you use conditional market orders?
Conditional order follow the current price, well, by BID or ASK. Please refer to the first section about market orders. That's the last time we say about this, promise!
Conditional orders are a great way to avoid locking your funds and hide orders from other traders, but if you need to catch that big one-second move, you should stick to limit orders.
Do you use conditional limit orders?
The conditional limit order consists of two parts:
- The condition price is the price to determine when to place the limit order. Works the same way as described in the section about market orders.
- The order price is the price of the limit order that goes to the order book when the coin price reaches your condition.
The limit order allows you to control the worst price you're willing to sell or buy your coins, but it also should be filled. The order is likely to be stuck on the exchange's order book if the price doesn't reach it or moves fast through your level. To prevent the limit order from being stuck:
- Set the order price a bit higher than the conditional price for buy orders.
- Set the order price a bit lower than the conditional price for sell orders.
If you set the order price much higher for sell orders and lower for buy orders, the price should take an additional move to reach and fill your order. Sometimes it's handy, but you should consider chances the order might end up stuck.