Trading Order System Description

This chapter provides a detailed introduction to the order types and matching mechanisms in TBBIT Futures trading, including definitions, use cases, and risk disclosures for various orders. Understanding the order system helps users execute trading strategies more efficiently and control risks.

I. Market Order A Market Order is an order type where the user executes a trade immediately at the best available current market price. When a user submits a market order, the system matches it directly with existing orders in the order book to achieve instant execution.

• Features: Fast execution speed, usually immediate; does not guarantee the execution price; slippage may occur during high volatility.

• Use Cases: When quick entry or exit is required; executing trades when market liquidity is sufficient.

• Risk Disclosure: Actual execution prices may deviate from expected prices during violent market fluctuations or insufficient depth.

II. Limit Order A Limit Order is an order type where the user sets a specific price to buy or sell. The order will only be executed if the market price reaches or is better than the price set by the user.

• Features: Controls the execution price; no guarantee of execution; may result in partial fill or no fill at all.

• Use Cases: When there are specific price requirements; intending to enter or exit within a particular price range.

• Risk Disclosure: During rapid market movements, limit orders may fail to execute, causing users to miss trading opportunities.

III. Stop-Loss / Take-Profit (TP/SL) TP/SL are conditional trigger orders used to control risk and lock in profits. When the market price reaches a preset trigger price, the system automatically submits the corresponding order.

1. Stop-Loss: Used to limit losses. When the market moves unfavorably and reaches the stop price, the system automatically executes a closing operation.

2. Take-Profit: Used to lock in gains. When the market reaches the expected profit target, the system automatically executes a closing operation.

• Features: Automatic execution without constant monitoring; promotes disciplined trading; effectively controls risk and reward.

• Risk Disclosure: In extreme market conditions, there may be a deviation between the trigger price and the actual execution price.

IV. Conditional Order A Conditional Order is an order automatically submitted by the system when the market price meets a preset trigger condition. Users can pre-set a trigger price and an execution price (market or limit) for automatic execution once conditions are met.

• Features: Automatic triggering enhances trading efficiency; can be combined with TP/SL strategies; supports multiple trigger logics.

• Use Cases: Breakout trading strategies; placing "ambush" orders at key price ranges; executing strategies when unable to monitor the market in real-time.

V. Post-only and Reduce-only

1. Post-only: Ensures the user's order will not execute immediately but instead enters the order book as a maker order.

   • Features: Acts only as a Maker order; avoids taker fees; if the order would execute immediately, the system cancels it automatically.

2. Reduce-only: Ensures the order is only used to reduce the current position and will not increase the position or open an opposite position.

   • Features: Used only for closing or reducing positions; prevents accidental reverse positioning; commonly used for risk control.

VI. Order Book and Market Depth

1. Order Book: A collection of all unfilled buy and sell orders in the market, displayed and sorted by price.

   • Buy Orders (Bids): Usually sorted from highest to lowest price.

   • Sell Orders (Asks): Usually sorted from lowest to highest price.

2. Market Depth: Refers to the quantity of orders available for execution at different price levels.

   • Significance: Greater depth means better liquidity; shallower depth makes prices more prone to drastic fluctuations.

   • Trading Impact: Insufficient depth may lead to significant slippage; large orders may impact the market price.

VII. Summary In TBBIT Futures trading, the order system is the core tool for executing strategies: Market orders for speed, Limit orders for precise price control, TP/SL for risk management, and Conditional orders for automation. Users should select order types reasonably based on market environments to enhance efficiency and control risk.