Many, many software pieces and trading signals are used by crypto traders globally to make their trades more profitable. This is simply because one, the cryptocurrency trading is difficult and complex, and two, because the competition is ferocious! It has become more of a dog-eats-dog scene, and so even the slightest extra strategy or tool can make that big difference for a trader to stand out from the crowd. And, as such, TWAP signals and TWAP software have become very popular.
What is a TWAP Software
TWAP refers to the time weighted average price, often called a TWAP card, and can be applied to any instrument or commodity of exchange. In the case of crypto trading, TWAP is kind of a strategy, used by mostly the high frequency very big traders, to cause a kind of price deception or price misconception in the market. For example, if an investor wants to buy a lot of BTC, and he has gathered the funds to do so, however, placing such large orders may cause the market price to respond with a sharp rise, because of the panic such orders create among other crypto traders. So the investor might lose on his money. But if he divides his big order into many small orders, the TWAP prices rule, and the execution is smooth. TWAP software is also a kind of algorithmic trading software or signal, and the benefits are many.
Benefits of TWAP Software in Cryptocurrency Trading
It is not possible for human traders to trade at such high speeds, without TWAP software.
Market volatility is not affected upon.
It is easier to use, and is kind of a simpler version of the VWAP, i.e., Volume Weighted Average Price.
Calculated from the time an investor submits the order, to the time it gets completed. So a kind of fair trading software system.
TWAP orders are averaged on the basis of time.
The formula is pretty simple: Typical Price = (Open + High +Low + Close)/4
Not impacted by small volume trades at all.
Doesn’t chase the market price, instead the software acts more passively.
Huge losses can be avoided, because TWAP software calculates risks as well.
Who Uses the TWAP Software
Mainly, the TWAP software is used by big traders, who have to carry large volumes of trade. The trader specifies the price limits, and other criteria, along with the time period he or she wants to trade in. If a suitable order is possible for that duration, the TWAP software would fill in the order, slicing it into many smaller orders. However, TWAP software follows a pattern, which another algorithm can recognize, and alert its own systems. This must be avoided at all costs, and as such, investing in some great quality TWAP software like the one from executium.com is commendable. Remember these are not TWAP calculations which are tough; rather, it is the understanding and application of these calculations which is tough.