What is Scaled Order?

This article explains what a Scaled Order is, how it operates, and when to use it effectively in trading. You’ll also learn how Scaled Orders on BITGP streamline the trading process, enabling seamless execution across a predefined price range.

Understanding Scaled Orders

A Scaled Order is an advanced trading strategy that splits a single large order into multiple smaller orders, each placed at different price levels. This approach helps traders manage risk, secure a more favorable average price, and minimize the market impact of a large order.

On BITGP, Scaled Orders are designed to simplify trading, allowing users to execute multiple trades effortlessly within a set price range.

Key Benefits of Scaled Orders

1. Risk Management: Spread trades across a range to avoid overcommitting at a single price point.
2. Average Price Optimization: Achieve a better average price by executing orders incrementally.
3. Reduced Market Impact: Divide orders to lessen influence on market price movements.
4. Automation: Configure once, and the system executes trades based on predefined settings.

How Do Scaled Orders Work?

Scaled Orders are defined by two main parameters:

1. Price Range: The upper and lower price limits within which orders are placed.
2. Order Quantity Distribution: Determines how the total trade volume is allocated across the range.

Size Distribution Options:

1. Flat: Each order is of equal size, regardless of price changes. Ideal for consistent exposure across the range.
2. Ascending: Order sizes increase as the price rises. Best for selling more (or buying less) at higher prices.
3. Descending: Order sizes decrease as the price rises. Useful for buying more (or selling less) at lower prices.

Example: Trader A wants to sell 5 BTC between $85,000 and $90,000 using a Scaled Order. Depending on the size distribution:

• Flat: Equal orders (e.g., 1 BTC each) at $85,000, $86,250, $87,500, $88,750, and $90,000.
• Ascending: Smaller orders at lower prices, larger at higher prices (e.g., 0.5 BTC at $85,000, 1.5 BTC at $90,000).
• Descending: Larger orders at lower prices, smaller at higher prices (e.g., 2 BTC at $85,000, 0.5 BTC at $90,000).

When to Use Scaled Orders

• Volatile Markets: Capture price swings for improved profitability.
• Range Trading: When prices are expected to fluctuate within a specific range.
• Position Accumulation: Gradually enter or exit a market position over time.

FAQs

1. What is a Scaled Order used for?
   • To split a large order into smaller trades across a price range, managing risk and optimizing the average price.
2. What’s the difference between Flat, Ascending, and Descending distributions?
   • Flat: Uniform order sizes. Ascending: Sizes increase with price. Descending: Sizes decrease with price.
3. When should I use Scaled Orders?
   • In volatile markets, during range trading, or for gradual position entry/exit.
4. Can I use Scaled Orders on both the website and mobile app?
   • Yes, they’re available on both platforms.
5. Can I cancel a Scaled Order after placing it?
   • Yes, cancellation or modification is possible via the Order History or Open Orders section.

Disclaimer and Risk Warning

All trading tutorials provided by BITGP are for educational purposes only and do not constitute financial advice. The strategies and examples shared are illustrative and may not reflect real-time market conditions. Cryptocurrency trading carries significant risks, including the potential loss of your funds. Past performance is not indicative of future results. Always conduct thorough research and understand the risks involved. BITGP is not responsible for any trading decisions made by users.