Understanding Price Ladder Trading

Disclaimer: Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. or the authors take no responsibility for any damages or losses.

Trading cryptocurrencies is a game of dealing with harsh volatility and the uncertainties of timing the market. Throw in human emotions; all you get is anxiety rather than profits. Therefore, advanced traders devise various strategies to minimize the risks and reap greater rewards. Ladder orders or Price Ladder Trading is one such tool advance traders opt to ensure the win.

What is Price Ladder Trading?

In simpler terms, price ladder trading is incremental buying or selling of any crypto-asset rather than opting for a single price. These incremental buy or sell orders are called ladder steps. It helps limit losses during the market fluctuations by spreading in and out of positions. 

Price ladder trading can also be leveraged to execute the well-known Dollar-cost averaging (DCA) trading strategy. DCA is yet another strategy to minimize risks during highly volatile market conditions. With this strategy, investors and traders purchase an asset regularly, doing away with the attempt at the market timing.

How to Ladder your Orders?

To ladder your orders, one must set incremental buy/sell limit orders across a specific spread of the order book instead of buying or selling at a single price. By setting these incremental steps, you can ladder all your limit buy and sell orders. Let’s understand the need for ladder orders for both scenarios of buying and selling a crypto asset.

Ladder Buy Order 

If you’re looking to buy BTC worth $1000 while Bitcoin is currently reading at $34k and its daily price graph is hovering around $33k to $35k. So, instead of putting a single buying order for a given price ($34k), you can leverage price ladder trading to put in four different buy orders worth $250 each spread over a price range of $33k to $34k. You can maximize your profits by pushing the average buying price lower.

Ladder Sell Order

Similar to a buy order, in this case, you can book higher profits while selling as Bitcoin’s price goes up. In this case, ladder sell orders help you increase the average buy price. Especially in highly volatile conditions, when it’s near impossible to time the market top, Ladder sell orders play a vital role in reaping maximum rewards. 

Benefits of Price Ladder Trading

  • Minimizing the risks
  • Does away with the need for timing the market’s top
  • Tackling high volatility
  • Less anxiety

Limitations

Even though price ladder trading offers maximum rewards and minimizes the risk, ladder orders come with limitations. One of the major limitations of this trading strategy is its complex nature and tedious process. Applying price ladder trading on a crypto exchange can be a tedious process. Most major exchanges lack features or an intuitive interface for traders to opt for ladder orders without placing individual orders. 

There comes HyperTrader in the picture. HyperTrader allows users to quickly execute ladder orders within a given price bracket with a simple and intuitive interface. With HyperTrader, users can place and execute up to 20 orders with a single click. 

Place Ladder Orders with HyperTrader

  1. Click on the ‘Ladder’ tab in Order Section.
  2. Fill in Start Price, End Price, Number of Orders, and Quantity.
  3. Place the order.

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