Market Maker

The Market Maker algorithm is designed for users who want to execute a large order while acting as a liquidity provider. The primary goal is to get filled passively by placing limit orders, which can lead to better execution prices and lower trading fees.

How It Works

It essentially follows the VWAP (Volume Weighted Average Price) trajectory, but primarily relying on passive limit orders to avoid taker fees and minimize market impact.
It only resorts to urgent 'taker' fills if the execution falls seignificantly behind schedule, or in other words, breaches the lower discretionary bound. In short, the goal of this strategy is: be passive first, only become aggressive when necessary to stay on track.

When to Use This Strategy

High Taker Fee Markets – Ideal for trading in environments where taker fees significantly impact profitability.
Non-Alpha-Driven Trades – Best for execution-focused trades where price prediction is not a priority.
High Sensitivity to Market Impact – Suitable for traders aiming to reduce order visibility and market influence.

Potential Drawbacks

Extended Execution Time – If market conditions limit passive fills, orders may take longer than expected to complete.
Uncertain Completion – Relying solely on passive orders means the strategy may face execution delays or incomplete fills in low-liquidity conditions.

This strategy is best for traders seeking cost-efficient execution with minimal market impact, particularly in high-fee environments where avoiding taker orders improves profitability.