Kraken to blame for liquidity issue on XTBEUR pair?
What's up guys,
Saw an article about a crazy 13% wick on Kraken that triggered some stops and pissed people off. Is this Kraken's fault? No. At least, not really.
No, Kraken almost certainly did not commit fraud and run the stops on their own exchange. Exchanges make plenty of money just fine and in the USA doing the illegal act alleged is a great way to spend the rest of your life behind bars covering your nervous, sweaty a**hole.
I suspect many of you who call foul play simply do not understand how exchanges work. In an exchange, you have a "maker" and a "taker." A market maker is someone who makes an order to buy at a specific price. A market taker is someone who makes a trade at a specific price (usually *now*). Market makers use limit orders. Market takers use market orders.
Ask yourself: when you click the sell button, WHO is buying it? Answer: the person whose limit order your hit.
Simply put, there can only be so much liquidity. Kraken is a very low liquidity exchange. It cannot handle multi-million dollar orders without significant slippage. Do they need professional market makers to step in? That's for them to decide.
Even the most liquid exchange in ALL OF CRYPTO has huge wicks all the time (BitMEX). This is just the reality of trading. It always has been and always will be. If you don't like it, stop trading. This is where risk management comes in. If you can't afford to have your stop executed at a WAY different price then what you expected, then don't use a stop and hedge instead.
I've posted all kinds of information about VAR calculations. If you aren't going to take the time to educate yourself, that's on you. Quit externalizing blame. 9/10 times, it's your fault. Accept it and move on. For more information, read Options, Futures, and other Derivatives (Hull).
-YoungShkreli
If you want the most liquidity, go to BitMEX. If you want the most regulation, go to CME. Kraken has neither of these things.
Saw an article about a crazy 13% wick on Kraken that triggered some stops and pissed people off. Is this Kraken's fault? No. At least, not really.
No, Kraken almost certainly did not commit fraud and run the stops on their own exchange. Exchanges make plenty of money just fine and in the USA doing the illegal act alleged is a great way to spend the rest of your life behind bars covering your nervous, sweaty a**hole.
I suspect many of you who call foul play simply do not understand how exchanges work. In an exchange, you have a "maker" and a "taker." A market maker is someone who makes an order to buy at a specific price. A market taker is someone who makes a trade at a specific price (usually *now*). Market makers use limit orders. Market takers use market orders.
Ask yourself: when you click the sell button, WHO is buying it? Answer: the person whose limit order your hit.
Simply put, there can only be so much liquidity. Kraken is a very low liquidity exchange. It cannot handle multi-million dollar orders without significant slippage. Do they need professional market makers to step in? That's for them to decide.
Even the most liquid exchange in ALL OF CRYPTO has huge wicks all the time (BitMEX). This is just the reality of trading. It always has been and always will be. If you don't like it, stop trading. This is where risk management comes in. If you can't afford to have your stop executed at a WAY different price then what you expected, then don't use a stop and hedge instead.
I've posted all kinds of information about VAR calculations. If you aren't going to take the time to educate yourself, that's on you. Quit externalizing blame. 9/10 times, it's your fault. Accept it and move on. For more information, read Options, Futures, and other Derivatives (Hull).
-YoungShkreli
If you want the most liquidity, go to BitMEX. If you want the most regulation, go to CME. Kraken has neither of these things.
Comment:
Please read UgylOldGoat's posts on medium. It would help all of you a lot.
Comment:
A taker is someone who places an order at a specific time (usually *now*) *
This is why you need to do research on the exchange you use. I do not hold significant wealth on crypto exchanges and neither should you. You need to be prepared for the absolute worst people.