Why market orders are risky and why paying attention to liquidity and trading volume is important.

Today Moons were listed on Bitrue exchange. Once the trading started there was very little liquidity on the exchange. Bitrue is not very big, they are at around 34th spot in terms of the trading volume.

Once people realized that the trading volume is very low they've decided to take advantage of it and someone listed 250 Moons for around $2.45 each as a limit order.

Some poor soul who decided to buy Moons using market order and bought 260 moons for around $600 dollars… with normal price of around $0.50c they could have gotten 1200 Moons instead on Kraken or Mexc…

https://preview.redd.it/bz99lwdn2hhb1.png?width=1258&format=png&auto=webp&s=c82ef71b6b93393b5a73cee2b80be7eb6bf11bac

Price jumped to around $2.46 for a brief moment and then quickly crashed to $0.55 because someone else sold only 16 Moons at a regular price of less than one dollar.

This shows how easily price can be manipulated if volume on exchange is very low and liquidity is poor.

Please be careful with your orders while trading. Use market order only when you are absolutely sure that there's enough liquidity on exchange to actually have that order filled at the price you want. Otherwise just use limit order that will only trigger the sale and buy orders at price levels that you actually want to use.

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48 thoughts on “Why market orders are risky and why paying attention to liquidity and trading volume is important.”

  1. So should I list my Moons for $10 and hope Elon does a market order for a $1 million?

  2. Poor fella. Wasted his money away. The thing is, it can be one of us, from this sub.

  4. I pray for that man’s sanity. He’s probably kicking himself, but hopefully he hodls till the next bull run where we’ll “surely” see $10!

  7. Let’s call that a learning moment for that individual and thank you for sharing so we can all potentially learn from their order as well

  8. Honestly it is on guy for using Bitrue. Whye? This exchange have $10 or 3% withdrawal fee… And up to 3 days withdrawal time… Both red flags for any investor.

  9. This is my biggest fear and why I only use limit/stop limit orders.

    This similarly happened when xrp glitched and hit $50.

  10. This also applies to stop losses. For your order to be filled, someone must be willing to pay for it. Sometimes you lose it all in a big dump.

  11. Mistakes happen. He will hopefully learn from it. We all lost money somehow on something. I for my part lost funds on paying high fees for certain purchases.

  13. Understanding the market and its variables is the best thing we can do. Without doing that, we are just gambling our money.

  14. I will count this as MOON ath was $2.45, don’t try to convince me another thing and bring this price in real.

  16. Aren’t exchanges supposed to get enough moons prior to listing and provide adequate marketmaking for the token (liquidity).

    If $600 can move price 500%, something is seriously wrong there

  17. I do my very best to only trade using limit orders now, incl if i see a trade going against me – I’ll move the TP to just above where price is and hope i catch a wick before it goes back down.

  18. We all thought Kraken or Binance listing will take us to $1.

    But a CEX ranks #34 took us to $2.45.

  21. Market orders only make sense on a big CEX with high liquidity.

    On anything else, pay attention to the order book and use limit orders.

  23. This is why you should not place orders on an exchange with low liquidities. Moons or not.

  25. Damn, poor guy got tricked, I’m sorry for him.
    Now we need 10$ moon to give the guy his money back

  26. We made it everyone moons flew right past $1 like we thought it would and hit $2.45. Moons are not $2.50 or riot.

  27. I don’t see why you’d ever do a market order. With the volatility at play, you mine as well always use limit orders.

  29. Omg! I am fuk scared to read this.

    I mever traded beyond Binanace and everythig else i used only Uniswap, Sushi… dexes.

    Very Good Insights Mate and Much appreciated!

  30. Why the fuck this comment section is getting downvoted to hell ?

    Edit later – suddenly the downvotes are gone, my guess is mods did something or maybe my comment jinxed it lol.

  31. Completely the fault of the exchange, however somone has learnt their lesson the hard way. I bet that now they will pay much higher attention to the liquidity

  32. Tip 1: always use limit orders, even if you want to buy at the ask/offer price e.g

    Moons are $0.49/0.51

    If you want to buy, instead of using market order, you can buy limit at 0.51 (or 0.52 if you’re afraid price will rise fast)

    Tip 2: if you’re using Kraken and you want to use a limit order to buy lower but not buy immediately on a sudden spike lower, use the “Post only” function which prevents immediate execution. Also useful if you fat finger the wrong price i.e 0.71, it will not execute

  33. If you are going to spend $600 on Crypto then at least do some due diligence beforehand please.

  34. You gotta be a special kind of evil to fool someone on a centralized exchange.

  35. They should have waited for more liquidity before opening trading. That guy who bought 250 moons for 600 dollars learned the hard way

  40. Need to study all possible criteria before involving in trade because its has factor so really upgrade skills in crypto foundation 👍

  42. Dude, this happens more than most know. Happens in stocks too. Many people just click.

  45. Ouch. Feel bad for the guy. I’m curious, is there any benefit to being on a smaller exchange with low liquidity? Like why not just be on a bigger one?

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