In the dynamic world of cryptocurrency trading, two foundational concepts—maker and taker orders—shape how trades are executed on exchanges. For beginners, these terms might seem technical, but mastering them is essential for optimizing trade execution, minimizing costs, and improving overall strategy. This guide breaks down everything you need to know about maker and taker orders, their differences, benefits, and how to use them effectively in real-world trading scenarios.
What Is a Maker Order?
Definition of a Maker Order
A maker order refers to placing a new buy or sell order that does not immediately match with an existing order on the exchange’s order book. Instead, it "makes" liquidity by adding depth to the market. Because this type of order increases available trading options for others, the person placing it is known as a maker.
For example, if the current best bid for Bitcoin is $60,000 and you place a buy order at $59,500, your order won’t execute right away. It will sit in the order book until another trader sells at that price. By doing so, you’re contributing to market stability and earning potential fee discounts.
👉 Discover how maker orders can reduce your trading costs instantly.
Types of Maker Orders
Maker orders typically fall into two categories:
- Limit Buy Orders: An instruction to purchase a cryptocurrency at a specified price lower than or equal to the current market rate.
- Limit Sell Orders: An instruction to sell at a set price higher than or equal to the prevailing market value.
These orders only execute when market conditions meet your predefined criteria.
Benefits of Using Maker Orders
Using maker orders offers several strategic advantages:
- Lower Trading Fees: Most exchanges reward makers with reduced fees—or even zero fees—because they enhance market liquidity.
- Greater Price Control: Traders can define exact entry or exit points, avoiding unfavorable slippage.
- Improved Market Depth: By adding orders to the book, traders help create a more stable and efficient marketplace.
This makes maker orders particularly appealing for long-term investors and high-frequency traders who prioritize cost efficiency.
What Is a Taker Order?
Definition of a Taker Order
A taker order executes against an existing order on the order book, removing liquidity from the market. As the name suggests, takers "take" available orders rather than creating new ones. These are often market orders or aggressive limit orders that match immediately.
For instance, if you place a market buy order for Ethereum, the system automatically fills it using the best available sell prices. You become a taker because you’re consuming existing liquidity.
Types of Taker Orders
Common taker order types include:
- Market Buy Orders: Immediate purchases at the best ask price.
- Market Sell Orders: Instant sales at the best bid price.
- Aggressive Limit Orders: Limit orders priced aggressively enough to match existing orders instantly.
These ensure rapid execution regardless of slight price deviations.
Advantages and Drawbacks of Taker Orders
The primary benefit of taker orders is speed—critical during periods of high volatility when timing affects profitability.
However, there are trade-offs:
- Higher Fees: Since takers remove liquidity, exchanges charge higher fees compared to makers.
- Potential Slippage: In fast-moving markets, large market orders may fill at less favorable average prices.
Despite the added cost, taker orders are indispensable for traders who value immediacy over savings.
Key Differences Between Maker and Taker Orders
| Aspect | Maker Orders | Taker Orders |
|---|---|---|
| Liquidity Impact | Adds liquidity to the market | Removes liquidity from the market |
| Execution Speed | Slower (waits for match) | Instant (executes immediately) |
| Fee Structure | Lower or zero fees | Higher fees |
| Price Control | High (set your own price) | Low (accepts market price) |
Understanding these distinctions allows traders to align their strategies with market conditions and personal goals.
When Should You Use Maker vs. Taker Orders?
Ideal Scenarios for Maker Orders
- Stable Market Conditions: During low volatility, placing limit orders slightly off the current price can result in better fills without rushing.
- Cost-Sensitive Strategies: Active traders aiming to minimize fees should favor maker orders.
- Long-Term Position Building: Investors accumulating assets over time can use limit orders to average in at desired price levels.
👉 Learn how professional traders optimize entry points using maker strategies.
Best Use Cases for Taker Orders
- Urgent Entries/Exits: When reacting to news or technical breakouts, speed outweighs cost considerations.
- High Volatility Environments: Rapid price swings make waiting risky; taker orders secure execution.
- Stop-Loss or Take-Profit Triggers: Automated exit strategies often rely on market orders to guarantee fulfillment.
Choosing between maker and taker depends on whether your priority is precision or immediacy.
How Fees Influence Trading Strategy
Transaction fees directly impact net returns, especially for frequent traders. Exchanges commonly apply a maker-taker fee model, where:
- Makers receive incentives (e.g., -0.01% to 0.1%)
- Takers pay premiums (e.g., 0.1% to 0.2%)
Over time, consistently using maker orders can significantly reduce trading expenses. High-frequency traders often design algorithms to post limit orders exclusively, capturing rebates while avoiding taker fees.
Conversely, short-term speculators may accept higher costs for guaranteed execution, prioritizing opportunity capture over fee savings.
Choosing the Right Order Type Based on Market Conditions
Adapting your approach to market dynamics enhances performance:
- Low Liquidity Markets: Use maker orders to avoid slippage and contribute to price discovery.
- High Liquidity & Volatility: Taker orders become more viable due to tighter spreads and faster fills.
- Range-Bound Markets: Place maker limit orders near support/resistance zones to catch reversals efficiently.
Smart traders monitor order book depth and recent trade volume to decide whether to make or take liquidity.
Tips for New Cryptocurrency Traders
Beginners should start by experimenting with both order types in simulated environments before risking capital.
Key recommendations:
- Study the Order Book: Understand how bids and asks form price levels. This helps set realistic limit orders.
- Avoid Extreme Pricing: Setting a buy order far below market value may never fill. Balance ambition with practicality.
- Start Small with Makers: Practice placing limit orders to build confidence in timing and pricing.
Developing patience with maker orders builds discipline—a crucial trait for long-term success.
Frequently Asked Questions (FAQ)
Q: Can a single trade be both a maker and a taker?
A: Yes. If part of your order fills immediately (taker) and the rest waits (maker), both fee rates apply proportionally.
Q: Do all exchanges offer maker fee discounts?
A: Most major platforms do, but structures vary. Always check the exchange’s fee schedule before trading.
Q: Are taker fees always higher than maker fees?
A: Generally yes, though some exchanges offer tiered models based on trading volume or token holdings.
Q: How do I know if my order was a maker or taker?
A: Your trade history will label each transaction as “Maker” or “Taker,” along with applicable fees.
Q: Is it better to always be a maker to save on fees?
A: Not necessarily. While saving on fees is beneficial, missing profitable opportunities due to unfilled orders can cost more.
Q: Can I switch from a maker to a taker strategy mid-trade?
A: Yes—canceling a pending limit (maker) order and replacing it with a market (taker) order allows quick adaptation.
Mastering the Art of Maker and Taker Trading
Successful cryptocurrency trading isn't just about predicting price movements—it's also about understanding how you trade. Maker and taker dynamics influence everything from execution speed to profitability. By strategically choosing between adding liquidity (maker) or removing it (taker), traders gain greater control over costs, timing, and risk exposure.
Whether you're a day trader seeking rapid gains or a long-term investor building positions gradually, integrating maker and taker principles into your routine sharpens your edge in the competitive crypto marketplace.
👉 Start applying smart order strategies today—see how small changes boost your trading efficiency.