Order Placement Explained: A Complete Guide to Maker and Taker Trading Strategies

In the cryptocurrency trading market, understanding the true meaning of “placing an order” is crucial for any trader. Maker and Taker are the two fundamental trading modes; they not only differ in their core processes but also directly impact your transaction fees and success rate. This article will start from the meaning of placing an order, providing an in-depth analysis of these two trading modes to help you make smarter trading decisions in the crypto market.

What Is a Maker Order? Understanding the True Meaning and Core Function of Placing an Order

A maker order refers to actively submitting a new trading condition on an exchange, such as setting a specific price at which you’re willing to buy or sell a certain cryptocurrency, then submitting this order to the order book and waiting for other traders to match your condition. Simply put, placing an order means you “create trading opportunities” rather than executing an existing trade immediately.

The core idea behind maker orders is that they provide market liquidity. When you place a maker order, your order becomes part of the order book, giving others the chance to trade with you. Because of this, maker orders are called “Maker” — you are creating a trading opportunity.

Two Basic Types of Maker Orders

Maker orders are generally divided into buy and sell orders:

• Buy Order (Bid Order): You set a specific price at which you’re willing to buy a cryptocurrency. For example, if you believe a coin will rise, you might place a buy order at $100, waiting for the price to drop to that level for execution.

• Sell Order (Ask Order): You set a specific price at which you’re willing to sell. For example, if you want to sell your holdings at $200, you place a sell order at that price.

When you set a maker order, it does not execute immediately but remains in the order book waiting for a match. This process can take seconds, minutes, or even days, depending on whether the market price reaches your set condition.

Core Advantages of Maker Orders

The biggest advantage of maker orders is lower transaction fees. Since maker orders add liquidity to the market, exchanges often charge lower fees for maker trades, sometimes even offering free trading. For large traders or high-frequency traders, this fee saving can be significant.

Additionally, maker orders give you full control over your trading conditions. You can set your ideal buy and sell prices based on your analysis and strategy, rather than passively accepting the best available market prices. This is especially valuable for traders with clear trading plans.

What Does a Taker Order Mean? Its Risks and Core Differences from Maker Orders

In contrast to maker orders, a taker order refers to immediately executing an existing order in the market. When you see a matching order in the order book (someone else’s trading condition), you directly match that order and complete the trade, becoming a taker. Simply put, a taker order is “using someone else’s trading opportunity directly.”

Taker orders are called “Taker” because you consume existing market liquidity — you “take” someone else’s order. The advantage of this method is speed, but the cost is higher transaction fees.

Two Execution Methods of Taker Orders

• Market Buy Order: You want to buy a cryptocurrency immediately, so you buy at the best available ask price in the market. No waiting needed; the transaction completes instantly.

• Market Sell Order: You want to sell immediately, so you sell at the best available bid price. Again, instant execution.

The essence of a taker order is to pursue speed, sacrificing some price advantage for immediate execution.

Risks and Costs of Taker Orders

The main disadvantage of taker orders is higher fees. Because taker orders consume market liquidity (you use existing orders), exchanges typically charge 50% to 100% higher fees for taker trades compared to maker trades, sometimes even more. Frequent taker trading can significantly eat into your profits.

Moreover, during market volatility, taker orders face slippage risk. The best available market price you see at the moment may change instantly after you place your order, leading to a final transaction price worse than expected.

Maker vs Taker — Fees and Execution Speed Trade-offs

Maker and Taker modes differ fundamentally in key metrics:

Execution Speed: Maker orders require waiting for the market price to reach your set level, which may take time. Taker orders match and execute immediately, offering the fastest execution.

Fee Structure: Maker fees are usually 0.05%-0.1% of the transaction amount, sometimes even free. Taker fees are typically 0.1%-0.2% or higher. If you perform 1,000 trades per month, the fee difference becomes very noticeable.

Market Liquidity Impact: Maker orders increase market liquidity, making the market more stable. Taker orders consume liquidity, relying on existing orders from others.

Trading Control: Maker orders give you complete control over your trading prices. Taker orders are passive, accepting the best available market prices.

Should You Use Maker or Taker? Market Conditions Decide Strategy

Different market conditions and trading goals call for different choices:

Stable Market Periods — Maker Strategy

When the crypto market is stable with low volatility, maker orders are preferable. You can set buy orders at support levels and sell orders at resistance levels, patiently waiting for the market to retrace to your target prices. In this scenario:

• Lower fees are advantageous
• You have ample time and are not in a rush
• You can achieve more favorable trade prices
• Suitable for long-term investors and large-volume traders

Volatile Market Periods — Taker Strategy

When the market is rapidly rising or falling, taker orders may be necessary. In such conditions:

• Maker orders might never execute (price quickly moves past your target)
• Missing opportunities can be costly
• Quick entry or exit is needed to manage risk
• Suitable for short-term traders and hedgers

High-Frequency Traders — Hybrid Strategy

Many successful traders adopt a hybrid approach:

• 80% of trades using maker orders to benefit from fee savings
• 20% of trades using taker orders for quick entries/exits or chasing rapid moves

This way, they enjoy the cost benefits of maker orders while capturing opportunities with taker orders when needed.

How New Traders Can Use Maker Orders to Reduce Costs

For beginners entering the crypto market, understanding the meaning and advantages of maker orders is vital. Here are practical tips:

Step 1: Read the Order Book The order book shows all current buy and sell orders with prices and quantities. Spend time observing how it changes to understand the supply and demand dynamics. Large buy walls at certain prices may indicate support levels.

Step 2: Set Reasonable Prices Avoid setting extreme prices (like the lowest buy or highest sell) that may never be reached. Based on current market conditions and technical analysis, set prices with a high probability of execution. Typically, place buy orders just above support levels and sell orders just below resistance levels.

Step 3: Be Patient The core of maker trading is patience. Your order might take minutes or hours to fill. During this time, you save on fees and can wait for optimal entry or exit points.

Step 4: Use Taker Orders Judiciously When a significant trading opportunity arises (e.g., breaking a key resistance), you can decisively use a taker order for quick entry. But for routine trading, prioritize maker orders.

Mastering the Meaning of Maker Orders to Optimize Your Trading Rhythm

The essence of a maker order is “actively providing trading opportunities while enjoying fee discounts.” Once you fully understand this, you grasp the first step toward controlling your trading costs in crypto.

Maker and Taker modes each have their application scenarios. Maker orders suit traders with patience, aiming to reduce costs, especially long-term investors and high-frequency traders. Taker orders are for those who prioritize speed and need to act quickly at critical moments.

By understanding the differences and applications of these two modes, and choosing flexibly based on market conditions, you can better control costs, optimize efficiency, and reduce risks in your crypto trading. Whether you’re a beginner or an experienced trader, a deep understanding of maker orders is key to gaining an advantage in the market.