Understanding Iceberg Orders
An iceberg order strategy is a type of algorithmic trading that allows you to:
- Automatically split large orders into smaller, manageable chunks.
- Execute orders based on preferred patterns (e.g., faster execution vs. better price placement).
After a smaller order is fully filled or the initial order's price level changes, the system checks market depth and places subsequent orders accordingly.
Iceberg Order Example: BTC/USDT
Scenario: A user wants to buy BTC using an iceberg strategy when the price drops below 35,000 USDT.
Step-by-Step Setup
- Order Size per Chunk: Set to 0.1 BTC.
- Number of Pending Orders: Set to 5.
- Total Order Volume: Set to 5 BTC.
Advanced Settings:
- Execution Preference: Faster execution, better price.
- Price Limit: 35,000 USDT.
- Trigger Condition: Immediate execution.
How It Works
Order Book:
- The first limit buy order is placed at the mid-market price (average of best bid/ask).
- Subsequent orders follow the bid ladder (e.g., second at best bid, third at next bid, etc.).
Dynamic Adjustments:
- If price exceeds 35,000 USDT, the strategy pauses.
- Filled orders trigger new ones based on updated market conditions.
- Price shifts cancel stale orders and re-place them per the latest order book.
FAQs About Iceberg Orders
1. How does an iceberg order differ from a limit order?
- A limit order is static, while an iceberg order dynamically splits and replenishes based on market depth.
2. What happens if the market moves against my iceberg order?
- Unfilled portions adjust or cancel to align with new price levels.
3. Can I customize execution speed vs. price priority?
- Yes. Advanced settings let you prioritize faster fills or better prices.
👉 Master Iceberg Orders for Smarter Trading
Where to Learn More?
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