What is iceberg request?
An overflow order is a large trading order divided into different smaller lots.
An overflow order is a way to buy or sell large amounts of cryptocurrency. If there are large shifts in the market, for example, buying or selling 50,000 Bitcoin (BTC) simultaneously, the transaction is highlighted in the order books. Usually, a massive drop in the value of cryptocurrencies causes market turmoil. Not only for the person who placed the order but also for all other traders.
When investors want to carry out large transactions, they divide them into various smaller orders. Among all the activities in the market, no one notices a series of micro-transactions. When someone finds out, the investor has already executed the transactions.
Why use iceberg orders?
Iceberg trading avoids major changes in the crypto market, such as price disruptions.
Iceberg ordering is a simple way to prevent panic in the market. Based on a logistics plan, transactions are carried out in an orderly manner. This prevents fundamental changes in cryptocurrency and demand. Trades are usually executed by the broker until the schedule is completed and the total order is settled.
Here is an example of an overflow order: If you want to sell 1,000 BTC, you divide a large order like this into smaller pieces. You start with a sell order of 300 BTC. Then she sells 200 BTC, another 250 BTC, and finally another 250 BTC.
This automatically leads us to the next question: What are hidden commands? Are they similar to iceberg orders? Basically, iceberg orders are actually hidden orders with one difference: the hidden part of the command is executed after it appears in the order book, while iceberg orders are executed directly.
Related: A Beginner’s Guide To Making Crypto Profits And Reinvesting
Who Uses Iceberg Commands?
Iceberg trading is often carried out by large institutional investors.
Iceberg orders, also known as reverse orders, are used by market makers, which is another word for the individual or company that bids and bids. When it comes to large crypto transactions, we are mostly talking about institutional crypto investors. They often trade large amounts of cryptocurrencies, which can have a huge impact on the market.
As an observer, it is possible to look up the order in the order books, but only a small portion of the market maker’s Iceberg orders appear in the level 2 order books. In the crypto world, the level 2 order books contain all the bids and orders on the exchange including Price, Volume, Timestamp – This is the process of collecting data in real time.
They call it the tip of the iceberg for a reason: the rest of the arrangement is “underwater”. For smaller investors such as private traders, placing an overflow order is unusual.
How does Fayd Talabat work?
Investors break the big order into several small pieces and put them in the market 1:1.
When investors want to buy or sell large amounts of cryptocurrency, they use iceberg orders. They want to trade but they don’t want to stir up market turmoil. By breaking their demand into smaller parts, they do not affect market demand or supply because they are off the radar.
The main objective of these investors is to execute all their orders at the requested price. For example, when you sell or buy large amounts of bitcoin, the last thing you want as a trader is to inflate the price of the currency due to buying pressure from other investors.
But, how do you determine the order of the iceberg? To get started, you have to start digging into the level 2 order books. Level 1 provides basic price data and doesn’t keep any details. Level 2 provides a lot of information and shows the depth of the market up to the top 10 quotes.
When you are looking for iceberg strategy commands, you need to use level 2 order books because when the first command in the line is executed, the next one is reloaded. Dive into the trading columns and find orders at a similar price. It’s all about the style.
How do you place an iceberg order?
Use a platform where you have direct access to the order books and the market, open an account and start trading large amounts in small steps.
Iceberg chart cannot be traded on regular trading platforms. You can only place flood orders on platforms that provide Direct Market Access (DMA). DMA requires a powerful technically developed platform where you can access order books like BitMEX or BitFinex.
Once you open an account, you can start trading. Almost every platform works the same way. You must select the order type and instead of an instant order, limit order or stop order, you can choose to execute an overflow order. In the following example, you see that you have some fields to fill in. In this case, the user buys a total amount of 1,000 BTC. The platform, in this case, OKX, will automatically buy the required amount of BTC.