What is Market Spread? How Spread Impacts Your Crypto Trading

[crabby]

Hi Everyone,

I wanted to have a discussion regarding market spread. I think this is a topic that is often overlooked by new traders in the market. Since new traders don't understand the impact of market spread, they may attempt strategies that involve too much trading.

I wrote up a brief article on the topic here:

What is market spread?

I would love to hear how you guys approach market spread and ensure you are factoring this into your trading strategy.

Looking forward to chatting with everyone!

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[cryptoaddictchie]

I would love to hear how you guys approach market spread and ensure you are factoring this into your trading strategy.

I did factored it. Market spread determine the demand of trading on that token oe coin. Higher spread means low demand and closer means its good. Sometime I use arbitrage strategy for this, looking for an exchange with higher spread and bought there then bring to a bigger volume exchange to sell since trading is active with lots of selling and buying activity.

Nice link by the way to explain it.

[GreatArkansas]

Talking with market spread, some centralized exchange also making money with this, especially those exchanges that major of their customers will use some fiat currency for the exchange of some currency including cryptocurrencies like Bitcoin and Ethereum. Like for example, if you buy Bitcoin at the market price at this time, and sell it immediately at market price, you may lose a huge amount.

[CryptopreneurBrainboss]

Market spread determine the demand of trading on that token or coin. Higher spread means low demand and closer means its good. Sometime I use arbitrage strategy for this, looking for an exchange with higher spread and bought there then bring to a bigger volume exchange to sell since trading is active with lots of selling and buying activity.

Frankly I pay less attention to the spread as I don't trade actively instead place my order and let the market buy me in when it hits my targeted price same with when I intend selling my coin. Exchanges are fun of manipulation how the spreed on their platforms are view with the use of bot trading and they can be observed on every exchange even the more advanced ones like Binance.

With this in mind, I think I won't be looking at the instant bid or sell price to determine my spread if I was actually to use that in my trading strategy not forgetting the bot usually don't have enough volume to execute big orders but they're just used to keep the market active so it seems there are trades ongoing every second.

[cryptoaddictchie]

With this in mind, I think I won't be looking at the instant bid or sell price to determine my spread if I was actually to use that in my trading strategy not forgetting the bot usually don't have enough volume to execute big orders but they're just used to keep the market active so it seems there are trades ongoing every second.

This works on an inactive exchange with less volume. Exchange like Binance? Cant really take advantage of the spread factor, but pick a less bot environment market. Ive tried digifinex to do trading on xfi, and seriously the spread there is kind worse, I should have sell my tokens on uniswap using atomic swap. Their market is literally govern by bots, even you click the price set on your order.

 Spread can be an advantage but also it could be a big loss if you dont take advantage of market.

[passwordnow]

If most transactions are just instant and there will be having no issues with the exchanges we use. If it's easy to register and use them and will not surprise with KYC and delay of our deposits/withdrawals, it is easy to take advantage the market spread. Before, I see traders who are making a living with it but today, I rarely see someone focuses doing it. I don't do it as I don't want to have any problem with slow and sudden surprise problems with the exchanges.

[el kaka22]

I have found out that you guys started a telegram group, that is great to hear I always wanted to be a bit more inside of what you guys are doing instead of just reading these amazing articles you write, hopefully I will be more active with shrimpy from now on. At the end of the day spread is something day traders and scalpers usually care about and not what long term people do, I am personally a long term investor and last purchase I made was about 8 months or so ago when bitcoin dropped, and I am not planning on changing that approach and becoming day trader anytime soon.

This means if you want quick profits and take bigger risks market spread could help you out, especially in many altcoins where liquidity and volume is low the spread could be your bread and butter.

[Dorodha]

Market spread is going well now the crypto market is rising and the price of Bitcoin is rising in terms of investment. But now is a good time to hold on to affect crypto trading. The market is likely to rise further. In that case if you sell Crypto Trading now you will regret it later. Although Fiat is a currency-centric exchange the demand for decentralized exchange is high. Everyone is holding on to Bitcoin and Ethereum from trading how much the price will go up will depend on the situation in the market.

[Coin_trader]

Market spread is going well now the crypto market is rising and the price of Bitcoin is rising in terms of investment.

The spread on BTC is almost negligible due to its volatility, As you notice, Every minutes of trading of BTC hits the price of the current Buy and Sell price. Spread varies on different exchange so in general we can't discuss it if we are using different exchange on trading because spread was created due to the volume of supply and demand on the exchange. For example in HitBtc, the spread of a certain coin is high due to less trading activity while on Binance it has a small spread.

[palle11]

The spread is the difference in price in the market. If you watch some platform has it following the buy or sell. But the difference is not in all time the same, it fluctuates with time zones, sentiments which brings demand and sells.

[DevilSlayer]

You can easily identify if a certain cryptocurrency is a liquid or illiquid through market spreads. Actually there is analysis also when it comes to reading bid and ask boards and most of the professional traders are using it. It is a skill that you should master in order for you to become a profitable trader. So for those who do not know what is liquid and illiquid cryptocurrencies. If you say a certain coin or token is liquid, you can easily get in and get out without any problem. Usually the liquid cryptocurrencies are the worth it to buy because these are the potential ones where it have high market capitalization and also daily volume while illiquid cryptocurrencies, these are coins where you cannot exit easily because of the market spread that is very huge. So basically there is a bid and ask board, the spread is the difference of the 1st in bids and also the first in asks sides. Note that most of the shitcoins are illiquid wherein the spread have huge differences.

[Smartvirus]

Maybe the caption is wrong or it's just my view point being biased or one sided but,
Is there really anything as market spread?
Because, when I hear the market, I get all whole lot of generality with no specifications to specific pairing but then, it's in the pair that the spread occurs and

It is basically the difference between the Bid and Ask price = spread. It varies between pairs based on the volatility and the exchange or platform your trading on.
The spread measures to what extent do your profit starts coming as it is only after this spread is covered do you start profiting in a trade.