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Market Making Strategy Example (Staggered Orders) by fer01

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· @fer01 ·
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Market Making Strategy Example (Staggered Orders)
Here I will show you the basics of how to help provide liquidity to a market and accumulate more coins in the process. I use this strategy on the BitShares DEX. You can change any of the variables here to suit your style.

The point of this strategy is to add numerous orders to the books of any market by covering certain price ranges. We pick a mid point and from there place buy and sell orders at 2,5% increments until we hit the boundaries of our desired range.

In this example I have been working BTS-EOS. I originally started with a midpoint of 38 BTS, which was the price at the time. I set buy orders at 2.5% increments down to 1BTS and sell orders up to 400BTS. This would be my starting range. As the price moves up filling my sell orders, I follow the price and replace them with lower buy orders. As the price moves down filling my buy orders, I follow the price and replace with higher sell orders. Always taking advantage of the price swings.

I use a spreadsheet to help me keep track of my orders. In this example my midpoint moved up (with the price) as orders were filled. You can see that four sell orders were filled (red) and that I replaced them with four buy orders (green). Keeping the midpoint empty always. As I accumulate coins or fiat, once I have enough to place an extra order I use it to gradually widen my chosen range. It’s up to you what you do with yours!

![Staggered.png](https://steemitimages.com/DQme6VKL2XzCsR5N7Prx95eGCcA9EQjXCDu6bUCcK8e4zCD/Staggered.png) 

Below is a screenshot of my exchange page for this example. As you can see my order sizes are always 110BTS and they are highlighted in blue on the order books. If you look at the “open orders” section you can see my highest buy and my lowest sell. Compare this to the charts above and you will notice the midpoint gap still in place. You can also see “my trades” where orders are getting filled, constantly buying low and selling high.

![Orderbook.PNG](https://steemitimages.com/DQmZhC6GWng1EGqTGWuAKic9kKYB6Ny62nh4ZWZwsQDZyBH/Orderbook.PNG)![Mytrades.PNG](https://steemitimages.com/DQmbeK8u5QowEqJzwjFeCz62oyRVgwvh3NTuRucTcfACmzn/Mytrades.PNG)

By keeping the mid-price blank all the time you create a spread of 5% between the buy and sell orders, once the two corresponding orders have been filled you have made your profit. By keeping the order price constant you start to accumulate a balance of extra coins on the way down and extra fiat on the way up.

When creating a basic spreadsheet, pick your mid point. Say $100, set a sell order 2,5% above ($100x1.025). Then you will follow with another 2,5% increment ($105x1.05) and so on. Do the same for your buy orders but this time to deduct 5% each time ($100x0.975).

i already filled in a lot of orders the last day's, while the price remain in the same range. So i make a lot of profit even do the price doesn't move alot.

If you guys need any help, setting the right-orders. Please ask!
👍  , ,
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vote details (3)
@cheetah ·
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://medium.com/@CryptoKong123/market-making-strategy-example-staggered-orders-a8cd098889ee
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@steemitboard ·
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@steemitboard ·
Congratulations @fer01! You received a personal award!

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