Market if Touched

A market order that is executed when a specific trigger price is reached, wherein the trigger price is lower than the trading price at deployment.

How it worksMarket if touched order explained

The market if touched order is an order that begins in standby, where its initial function is to wait until the trading price of an asset reaches a predefined level. Once the trigger price has been reached, even if only briefly, the market order becomes active and begins buying or selling, at then-present prices, irrespective of the market conditions.

The main benefit of this order type is to take advantage of the anticipated fall in price. However, its execution period is seemingly arbitrary, and may not fully capture the complexity of the market. For example, if one placed a market if touched order at -10% of the current trading price, it may be the case that the market goes down to -20% over the original price, yet because the market if touched order executes so quickly, traders might miss out on a considerable fraction of the potential returns. (To avoid such a scenario, traders might want to look into deploying a trailing market if touched order).

It’s worth noting that a market if touched order is nearly identical to a stop market order, but it’s differentiated by the fact that the trigger price is lower than the current trading price, as opposed to the opposite scenario. These order types are considered different primarily due to programming limitations on legacy systems. Many older platforms are unable to support two or more triggers at different possible execution ranges without breaking the system -  they were separated out of practicality, instead of for the benefit of the user.

Due to its underlying programmable swap design, Axo allows you to build orders under whichever conditions you want, but will then assign them names based on conventional terminology. In other words, as Axo can easily execute such triggers, it makes the distinction between various order types primarily academic and kept for the benefit of the traders still used to the traditional terminology. 

Illustrative AXO price: 12.5 ADA
Use case

How it is used

Max wishes to buy ADA with DJED. He has become convinced that the price might fall further, but he doesn’t know when this might happen. Max dislikes having to constantly check market prices for his ideal entry conditions. On the other hand, he also doesn’t want to set a limit order as he knows it might never get fully filled, and the price might go beyond it. As he wants to take advantage of falling prices, he places a market if touched order at a value that is 10% lower than the current price levels. A short while later, Max’s assumption turns out to be correct and, without having to constantly monitor the order, when the price fell to the desired price (-10% of the initial price point) a market order was activated filling Max’s order at the available prices.

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