What are the advantages and disadvantages of using the 'market on close' strategy in the cryptocurrency industry?

3 answers

• jacinta gyoergyJul 09, 2024 · a year ago
  The 'market on close' strategy in the cryptocurrency industry offers several advantages. Firstly, it allows traders to execute their trades at the closing price, which can be beneficial for those looking to take advantage of price movements that occur towards the end of the trading day. Additionally, this strategy can help reduce the impact of market manipulation, as the closing price is determined by a larger number of trades. However, there are also disadvantages to consider. One drawback is that the closing price may not accurately reflect the true market value, especially in illiquid markets. Furthermore, executing trades at the closing price can be risky, as it leaves traders vulnerable to sudden price fluctuations that may occur during the closing auction. Overall, the 'market on close' strategy can be a useful tool for certain trading objectives, but it is important to carefully consider its advantages and disadvantages before implementing it.
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• Povlsen ProctorDec 06, 2021 · 4 years ago
  Using the 'market on close' strategy in the cryptocurrency industry can have its pros and cons. On the positive side, this strategy allows traders to take advantage of potential price movements that often occur towards the end of the trading day. By executing trades at the closing price, traders can potentially benefit from these price fluctuations. However, there are also drawbacks to consider. One disadvantage is that the closing price may not accurately reflect the true market value, especially in volatile markets. Additionally, executing trades at the closing price can be risky, as it leaves traders exposed to sudden price swings that can occur during the closing auction. It is important for traders to carefully assess the advantages and disadvantages of this strategy and consider their risk tolerance before implementing it.
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• KaradiMay 24, 2021 · 4 years ago
  The 'market on close' strategy in the cryptocurrency industry can offer advantages and disadvantages. One advantage is that it allows traders to execute trades at the closing price, which can be beneficial for those looking to take advantage of price movements that often occur towards the end of the trading day. However, there are also drawbacks to consider. The closing price may not accurately reflect the true market value, especially in illiquid markets, which can lead to potential losses. Additionally, executing trades at the closing price can be risky, as it leaves traders vulnerable to sudden price fluctuations that may occur during the closing auction. It is important to carefully weigh the pros and cons of this strategy and consider individual trading objectives and risk tolerance before implementing it.
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