Trigger Order
A trigger order is an order type that is executed only when a specific condition or trigger price is met. It allows you to set a trigger price at which the order becomes active and is sent to the market for execution. Once the trigger price is reached, the order is converted into a market or limit order and executed according to the specified instructions.
For example, you can set a trigger order to sell a BTC if its price drops to a certain level. When the BTC price reaches or falls below the trigger price, the order is triggered, and it becomes an active market or limit order to sell the BTC at the best available price. Trigger orders are commonly used to automate trade executions and manage risk by setting predefined conditions for entering or exiting a position.
It is necessary to set the transaction amount, order price and trigger price. When the market fluctuates to the set trigger price, the transaction will be executed by the order price the users set previously.
TP/SL Order
Take Profit (TP) and Stop Loss (SL) orders are essential tools for managing risk and protecting your capital. These orders allow traders to automatically close their positions at predefined price levels, either to secure profits or to prevent excessive losses.
A Take Profit (TP) order is used to lock in profits once a trade reaches a certain favorable price. It automatically closes your position when the market hits your target level.
For example:
- Suppose you buy Bitcoin at $30,000.
- You believe the price will rise and want to sell at $33,000.
- You place a TP order at $33,000.
- If the price reaches that level, your position is automatically sold, and your profit is secured.
TP orders are particularly helpful when you are not constantly monitoring the market, as they allow you to capture gains without manual intervention.
A Stop Loss (SL) order is designed to minimize your losses by closing your position when the market moves against you.
For example:
- You buy Bitcoin at $30,000.
- To limit your potential loss, you set a stop loss at $28,500.
- If the price falls to $28,500, your SL order triggers and sells your position, preventing further loss.
Stop loss orders are a core part of any risk management strategy, especially in crypto markets where prices can swing dramatically in a short time.
Both TP and SL orders are typically conditional orders — they remain inactive until the market hits the trigger price. Once triggered, they convert into a regular market order (executes immediately at the best available price) or a limit order (executes only at a specified price or better).
Trailing Stop
A Trailing Stop is a type of stop order that automatically adjusts its trigger price based on favorable movements in the market. Unlike a regular stop-loss, which remains fixed, a trailing stop “trails” the market price by a certain amount or percentage. Its goal is to lock in profits as the price moves in your favor while still protecting you if the price reverses.
Let’s say you’re holding a long position in Bitcoin, currently trading at $60,000. You set a trailing stop of $2,000. As the price rises to $61,000, your stop-loss also moves up, from $58,000 to $59,000. If the price reaches $63,000, your trailing stop is now at $61,000. But if the price starts falling, say from $63,000 to $61,000, your stop doesn’t move anymore. If the price drops below $61,000, the trailing stop is triggered and a market order is placed to sell your position.
TWAP orders
TWAP, short for Time-Weighted Average Price, is an algorithmic trading strategy that splits a large order into smaller chunks and executes them evenly over a specified time period. The goal is to achieve an average execution price that is close to the average market price over time, while minimizing market impact.
Unlike a simple market or limit order, a TWAP order aims to disguise the full size of a large order and avoid significant price slippage by executing gradually.
Suppose a trader wants to buy 1,000 BTC but doesn’t want to move the market by placing the entire order at once. Instead, they set up a TWAP strategy to buy 1,000 BTC over the next 4 hours. The algorithm might split the order into equal slices every 5 minutes, so it places a smaller order of around 20.83 BTC per interval.
Each slice is executed using a market or limit order, depending on the implementation. The size, timing, and aggressiveness of each slice can sometimes be customized, but in its most basic form, TWAP follows a fixed interval and volume schedule, regardless of market conditions.
The final average execution price of all the slices combined is intended to approximate the time-weighted average price of the asset during the order’s execution window.
Scaled Order
A Scaled Order is an advanced order type that splits a large order into multiple smaller limit orders distributed across a predefined price range. The goal is to average into (our out of) a position across multiple price levels, reducing market impact and avoiding a single large order at one price.
Unlike TWAP, which spreads execution over time, a Scaled Order spreads exeuction over price. The trader sets the total size, min price, max price, and the number of sub-orders. The system then places a ladder of limit orders between the min and max price.
Suppose BTC is trading around $60,000, and a trader wants to buy 10 BTC using a Scaled Order between $58,000(min) and $60,000(max) with 10 levels. The system will place 10 limit buy orders (e.g. 1 BTC each) at prices evenly spaced from $58,000 up to $60,000.
If the market drops from $60,000 toward $58,000, the higher-priced orders get filled first, and additional lower-priced orders fill as the price moves deeper into the range.