How to save 1% of any steem transaction on the exchange.
First of all, this post is long and maybe a bit boring. I know that. But is worthy because this procedure can save you more than 1% of your money.
This article is an overview of how to trade steem on the exchange platform a bit smarter way. I know that lot of people at steemit are not investors or traders but they need to cash out steem anyway. I will try to explain how to do it without any negative impact of the market or better say how to get even more money out of the trades.
Two sides of the market
Lets take it simple. Many of you think that market is about two sides. Buyers and Sellers. Yes, this is truth. But not an ultimate truth. There is a lot of subcategories of people who wants to sell or buy. In trading analogy is better to say orders, not people. Because one guy can put many different orders to the market with many different order-types. The other guy is clicking on the button. And this is the crucial thing.Don't press the button before you know the consequences.
The order types
There are two different categories of order types. Marketable orders and non-marketable orders.
The marketable orders ( Market , marketable Limit) are those orders which cause immediate action (liquidity taking). This reaction is immediate execution of the trade against your counterparty. If you want to use this type of order you will pay the commission (fee) because your order is executed immediately. You have to pay the time premium .
Non-marketable order (non–marketable Limit) is the order which do not cause immediate reaction (liquidity providing) So, if you use this type of order you will not pay the time premium. Your costs should be much lower then in the first example. You taking a risk that your order will not be executed immediately or ever.
This is an example of maker – taker fee model.
There you go. This is how fee schedule may look like (source poloniex.com). This is the one of the worst fee schedule I ever seen. Worse than this is only Kraken, I guess. But for us is necessary, because many of you are going to use poloniex for cash out. The good news is that situation could be only better.
Get smarter
Now we know there are more categories than buyers and sellers. There are smart buyers , smart sellers and other buyers and sellers. I don't want to say that other participants are not smart enough. There is also lot of motivation to sell or buy immediately but if you do not need to use it, then is no reason to pay more.
A bit complicated? I will make things clear by two more images.
The thing you can see above is an orderbook or a market depth. There you can find all visible orders on the exchange. All people behind this orders are able to wait a little bit for an execution. In the first row (Top Of the Book) you see orders which have best chance to be filled in very short period of time. ( participants are using non-marketable orders - makers)
On the image below you can see exactly opposite. Traders call this report also Time&Sales or Tape . These trades come from people who are not willing to wait even second. (participants are using marketable orders - takers )
There you go. Time range of 10 minutes. Price oscillation with range from 0.00147381 to 0.00149175. It is more than 1.2% if I am right. Am I ? All of those people were willing to pay also 0.25% of commission. Its more than 1.45%. This behavior could be even worst but I am not going to spread panic. I can leave it for next day :)
I would rather to show you simple step by step guide for beginners how to Sell Steem properly.
Selling
- 1. transfer your steem to your exchange account
- 2. try to put your orders inside of the spread (between Bid and Ask)
- 3. if you have enough time put your sell order front of the first Lmt Sell order in the orderbook
- 4. if you have no time put your sell order exactly to the middle between Bid and Ask
- 5. if you want immediate execution, put your sell order exactly front of the Bid at the orderbook.
- 6. never use market order
- 7. If you want to sell more, split your amount of steem to few different orders with smaller size
And finally - If you want to sell this amount
Very good advice, I never sell at BID price, always trying to find a good spot as close to the Ask as possible.
trying to understand, but it is a bit like Chinese if you don't understand Chinese. I trained as artist, and have had sciencey people say stuff to me like 'i just don't don't understand your universe'. well that is what I feel about this stuff.
Well, this is very serious problem but not yours. I have tried to simplify as much as I can but it seems that I fail . I am an algorithmic trader so this is far away from my universe. :)
Anyways, I will explain this once again because this post has been written for people like you, to help you save your returns. so let me try to explain it once again in here.
please, take a look on this picture. do you see all those red numbers? those numbers are prices higher than current price of bitcoin . the green numbers are lower than current price. top of the book is price 281.35 RED on the SELL side and 281 GREEN on the buy side. difference between those two numbers is empty space. (spread) if you want to BUY , you have to place your LMT BUY order to this empty space or lower (GREEN SIDE). If you want to SELL then you have to put your SELL LMT order to the empty space or higher (RED SIDE). and why ? because if you just clicking on the button without setting up the price, then you are :
if someone with very high amount of money doing the same thing over and over again. (Steem is very sensitive on the SELL Side because of cash outs) This make cause of real trouble. No steem , No steemit, No rewards. Market will be dead forever. There will be no investors willing to buy. and rewards you earning in STEEM or STEEM DOLLAR could be worthy just 0.000000000001.
and I am trying to prevent this situation by explaining right trading behavior. because the steemit is nice project and I do not want to let him destroy himself.
thank you for your questions. do not hesitate to ask ,please .I will be happy if you will share this post with your friends. I do not need votes , followers or any other reward. I just want to people like you understand that.