10-23-2018, 09:58 AM
(10-23-2018, 08:17 AM)askmike Wrote: The risks are huge (on illiquid markets). Gekko is a tool used by all kinds of people and I am very reluctant to add features that can result in loss of funds by in experienced users.
As of now I see no advantage in doing a market order over a limit order with a limit x% above the price (when buying). That executes as a market order up until some sane level. That way we prevent you losing 5% of your money when you trade on some tiny binance market.
Oh yes, I am also a fan and can confirm that limit orders, and sticky orders in particular, work nice with gekko during live trading in many situations, but not all.
Some guys, and I would say those developing strategies for a longer time, also figure out disadvantages of sticky compared to market taking orders, e.g. in this video: https://www.youtube.com/watch?v=PxVW7jM6WsI
Like @crypto49er is explaining, there are situations where limit order is performing worse a market order:
- A limit order assumes you have a market taker, picking your offer. In a pump and dump situation you may not have a taker and you are adjusting against a quickly changing order book without the ability to finish your trade. You are loosing money. A market taker could just jump in and complete.
- Some exchanges like binance do not have a fee advantage for limit orders...when the spread is small, why take the risk for waiting for a limit order to complete? In general we buy/sell because there is a price movement already and waiting make it worse.
- The process of sticky order is a lot more complex and has the risk of technical bugs - new order, cancelling, ..., new order, partial filling, id matching and so on. It is always a fight against exchange rate limits and gekko broker bugs like insufficient fund, partial filled orders or new unknown response codes. I experienced this many times and the order was not finished at all. Even sticky orders adjust quick, they do not use websockets but delayed api requests so it is not guaranteed to be topmost the orderbook all the time. A market taker order is a simple oneshot request.
- Like @crypto49er, I am watching and comparing prices between advice, trade initiated and trade completed events for a longer time now during live trading...and there are situation where you see a bigger time and price gap and you wish to have to ability to avoid this by using market taking. This happened on pretty liquid markets like kraken eth/eur.
In my eyes the sticky order is the preferred option, but with a very small candle size and in case your strategy knows from TA that you are within a pump and dump situation, I would prefer market taker orders. So strategy must explicitly advice to use the market taker option, default is sticky order, what do you think?