Add Liquidity vs Remove Liquidity

[ytr30]

Can somebody give me an example?

If XYZ is at 50 bid and 50.01 ask and I send order to buy 100 shares at 50.02 do I remove liquidity? How do I add with automated trading?

thank you

 

[Bob111]

http://ibkb.interactivebrokers.com/node/201

 

[ytr30]

thank you

 

[AKAtrader]

So how do you add liquidity on a stock like 20.01 x 20.02?

THis gets even harder when u try buying a momo stock breaking out.

 

[Bob111]

Quote from AKAtrader:

So how do you add liquidity on a stock like 20.01 x 20.02?

THis gets even harder when u try buying a momo stock breaking out.

if you are buying a momo stock breaking out-then you almost certainly removing,not adding liquidity

 

[AKAtrader]

SO removing liquidity is the standard way to trade?
I should just not worry about it and try to use the cheapest remove liquidity ecns?

 

[WhiteOut56]

Providing or removing is the standard way

 

[NY0BScalper]

Quote from AKAtrader:

SO removing liquidity is the standard way to trade?
I should just not worry about it and try to use the cheapest remove liquidity ecns?

It's the standard way to trade breakouts. Half of all trades are "adds", half are "removes" - whenever you "remove," "take," or "punch," the person on the other side is "providing." When I trade breakouts, I usually have a pre-determined profit target in my mind, so I remove on the entry and add on the exit, making my ecn fees effectively 0.

 

[cactus_trader]

after trading you will soon realize how important order execution really is.

what ECN's to remove or provide liquidity is huge. Each ECN pays or cost a different amount etc