Limit Order Distribution

Limit order distribution involves placing a series of limit orders at various price levels rather than a single large order. This technique is used to build or exit a position while minimizing price impact and capturing better average prices.

In crypto markets, this is often called layering or grid trading. By spreading orders across the order book, a trader can benefit from liquidity at different depths.

This is particularly effective in markets with thin order books where a single large order would cause significant slippage. It also allows the trader to average into a position as the price fluctuates, smoothing out the entry cost.

Limit order distribution is a core strategy for market makers and large-scale traders who need to manage their impact on the market. It provides a structured way to interact with the order book while maintaining control over execution price.