Order-splitting algorithms are a creative approach in attempting to solve some of the ordering issues faced by traders operating in the cryptocurrency markets. This post will seek to explain the benefits of using these orders on Tokenplace’s trading platform, which is currently in a beta building phase.
The dawn of cryptocurrencies has presented traders with a new frontier in which to test their skills. Although the trading infrastructure offered by cryptocurrency exchanges is growing in sophistication with each passing day, it is still a far cry from the comparatively comprehensive systems boasted by the securities markets.
Any trader who has attempted to trade in the cryptocurrency markets will know that the market is seriously fragmented. Finding trading opportunities, trading pairs, or even just purchasing the specific currency you want can often involve a significant amount of financial manoeuvring.
For those traders who are bold and brave enough to attempt to navigate their way through the cryptocurrency markets, Tokenplace provides an innovative workaround for many of these issues.
Tokenplace is a trading platform that uses its original multi-exchange trading algorithms to allow traders to trade on multiple exchanges at the same time. Traders who choose to take advantage of this will no longer need to constantly rotate between exchanges to trade, and will instead be able to place their orders through Tokenplace’s intuitively-designed platform that was created specifically for crypto traders by crypto traders.
Traders of every experience level will be familiar with the basic order types that can be used in the securities markets. Limit orders allow traders to obtain securities at specific prices; their more frequently used counterparts, market orders, are for those who prefer expediency over accuracy.
While these order types are also found in the cryptocurrency markets, Tokenplace has recently implemented a new kind of order that attempts to overcome some of the very specific problems faced by crypto traders.
These new ordering algorithms are known as “order-splitting algorithms,” which are similar to Smart Order Routing (SOR) systems used by some securities traders. As the crypto markets are so fragmented, finding the best deal in terms of price can often be challenging. Manually scanning through multiple exchanges and analysing large amounts of data is as frustrating as it is time-intensive.
Order-splitting solves this problem by intelligently gathering market data from dozens of different exchanges to locate the best possible price. This analysis will not only factor in the exchange fees but, unlike the prices displayed by most exchanges, order-splitting algos are also able to secure the maker price as opposed to the taker price. While this may not seem like a substantial benefit, those who have experience in trading on the cryptocurrency markets will know that fees and taker prices quickly take their toll on profits.
To use these new order-splitting algorithms, users can seamlessly integrate their existing exchange accounts with the Tokenplace trading platform via API keys. Once the accounts have been integrated and the order-splitting order has been placed, the algorithm will scan through the market data provided by all of the connected exchanges to determine the best exchange to purchase on. Tokeplace will then transmit those orders directly to the exchanges. The purchased (or sold) cryptocurrency will then be found on your specific accounts.
In an effort to ensure that you secure the best possible price, the algorithm may determine that the most prudent course of action is to break the order down into smaller pieces across multiple exchanges. Acting somewhat like a limit order, the order-splitting algorithm patiently analyzes the available data, waiting for the optimal taker or takers to become available before making any purchases on your behalf.
The order-splitting algo is so focused on securing the best price that if your order was substantial enough to move the market, the order would automatically splinter itself into smaller orders over a period of time to ensure that the market would not move as a result of your purchases.
However brilliant a trader may believe himself to be, the human mind is simply not capable of performing this level of analysis at the speed required when trading. Order-splitting algorithms represent one of the most meaningful steps forward for retail traders in the cryptocurrency markets to date.
At this stage, we can reasonably assume that cryptocurrencies are here to stay. The fragmented nature of the markets today are simply part of the growing pains to be expected in any new asset class. Tokenplace’s order-splitting algos will help to ease some of the issues presented by this fragmentation.
Right now, the crypto market is fragmented by all the competing exchanges, while traditional securities are fragmented by national boundaries. As Tokenplace begins to reduce this fragmentation, it is likely that cryptocurrencies will grow to be the first truly global asset class, since crypto is capable of transcending national boundaries. Hopefully, the growing pains of today will be little more than a bad memory tomorrow.
To take advantage of these orders and the wide range of other advantages offered by Tokenplace’s unique trading platform, head over to app.tokenplace.com to create an account today. Order-splitting functionality is set to go live early next year, but you can already start consolidating your portfolio and analysis in one place and trading on multiple exchanges in one window.