All right. So in this video I will be

talking about everything related to

orders on poly market. So I will be

talking about the order book and I will

be talking about the spread. I will be

talking about what is a tick size. I

will also be talking about stop- losses,

take profits. I'll be talking about what

is a mega, what is a taker and generally

just digging deep into that. So I hope

you will stick around. This is really

important information. And I've really

been researching this for a while now.

And now I'm going to do a brain dump on

you so you get a better understanding of

this. And this will actually enable you

to perform better with your trading. But

because it's important to understand

what happens when you place a trade, how

can you handle your trades? How can you

monitor your trades? How can you limit

risk exposure by implementing uh stop-

losses and take profits? Because as you

probably know, Poly Market does not

support stop- losses. So, it's something

we have to implement in our bot by

ourself. And I have an implementation of

that that I will show you how it works.

It might not be perfect yet, but as we

go along, I will improve it and make it

very robust when Raven is ready to

launch. So, let's get started. To

understand stop-losses and take profit,

we need to understand the order book.

So, I have uh this market here. The US

government shutdown Saturday and we have

the order book. Okay. So the order book

represents basically everybody all the

traders that are placing trades. This is

what you see here is resting orders on

the order book. The ask side is people

that are willing to sell which is

indicated by red and the bit side is

people willing to buy. So that's on the

buying side. And then you have a spread

which is the difference between the asks

and the bits.

And this also ties in a little bit with

what we talked about in the previous

video about what is a maker and what is

a taker. So I will be explaining that as

well because if you remember we have the

mega rebates program. So you are

actually able to earn money by becoming

a maker. And if you are what we define

as a taker you actually pay money you

pay trading fees. And this is

specifically for the 15minute crypto

markets because these are going crazy.

But we might actually have these fees

coming onto other markets that are very

liquid. So it's important to understand

well what is a mega and what is a taker.

So I'm going to try my best to explain

what that is. There's some confusion

about what is a mega and what is a

taker. Some people think that the megas

is someone that sells and the tears is

someone that buys because that's kind of

what your intuition would say, but

that's actually not what what it is. So

a mega or taker is defined as who

provides and who takes liquidity. To

provide liquidity to a market, you would

have to place what we call a resting

order on the order book. So if you let's

say you place a let's say you want to

sell but you want to sell as a mega

what you would have to do is you would

have to place a order to sell your

shares

at 45 not crossing

the bit not crossing a spread. So you

can actually place you can see there's a

spread now of 1 cent.

So if you play if you place a sell

order, let's say 45.5,

you did not cross the spread over to the

bit side, meaning that it's actually a

maker order. However, if you place a

order of let's say 44 to sell at 44,

that would be a taker. You are removing

liquidity because you have resting

orders that has provided liquid

liquidity

and um and it would actually be

taken right away by the people that are

buying. So the spread is the difference

between the best asks and the best bits.

So there's also something called a tick

size. So the tick size is basically how

you know how much you can increment your

prices with. Let's say you have a tick

size of 0.1. That means you can place um

you know orders at 45.1, 45.2 and so on

and so forth. So let's say the tick

price is 0.1. Then you could place a

mega order on the ask side at 45.9 and

it would it will still be a mega order.

And the same goes for the bit side.

Let's say that you want to buy as a

taker. That means you would have to take

liquidity from the ask side. You would

have to place a buy order at 45. So that

means place a order at the best ask then

you would be almost guaranteed that your

order would be filled right away unless

the market moves away from you which

actually happened for me a few times and

I'm I'm going to show you exactly what

happened there. So in that case you

would become at a at taker. If you want

to be a mega as a buyer you would have

to place your buyer orders within the

spread not crossing over to ask. You

could do it at 44. You could do it at

45, 44.5, 44.6 and so on depending on

the tick size. The text size we can get

from the API, but I'm not going to show

this in this video. So if we look at

this examples of a buyer limit buy below

best ask, it rests on the order book and

then it becomes a mega. If you do a

limit buy at or above the best ask, it

then fails and you become a taker. And

if you do it on the cell examples, a

limit cell above best bit, then it rests

and you are maker limit cell at or below

best bit, it fills and then you are

taker. I hope that makes sense. It all

depends on if you are crossing the

spread over to the other side. That's

what defines if you're mega or a taker.

And this is kind of I mean it's not this

is very important when you are

implementing your stop-loss and take

profit which is very relevant when doing

trading bots. So when implementing a

stop-loss we also want to understand the

different order types. So if we look at

poly markets documentation there's

different order types. You have an order

type called fill or kill order which is

a market order to buy in dollars or sell

in shares.

shares that must be executed immediately

in its entirety otherwise the entire

order will be cancelled. Now we have to

keep in mind here poly market doesn't

have market orders. So the definition

here of a market order is what we also

could call a taker order. So it's a

order you place on the best bit or as

depending on if you are a seller or

buyer. So if you want to do a market

order as a buyer, then you would have to

look at the order book. You would have

to say, okay, as a buyer, I need to

cross the spread over to the ask side.

What is the best ask? It's 46.

So if you place a order to buy at 46,

you could be almost guaranteed that they

fill if there's enough liquidity. So in

this case, let's say that I place an

order to buy at 46,

let's say 6,000 shares. The order would

be cancelled if it's a fill or kill

because it has to be executed first of

all immediately and also in its entirety

otherwise the entire order will be

cancelled. So if there's not enough

liquidity, if it's if there's not enough

shares, it's going to be cancelled. But

there's another one that we call or that

they call fill and kill order which is a

similar order. It's a market order to

buy in dollars or sell in shares that

will be executed

immediately for as many shares as are

available.

Any portion not filled at once is

canled.

So I actually haven't tried this one uh

myself. I have tried to fill or kill but

the way I understand this one is that

let's say that you place a buy order

at let's say now it's 6,000 let's say

you place it at 7,000

at 46 then you would get these 6 thou 6

6,100

but then the remaining shares you will

not get

and the same goes if you are selling

let's say that you are selling

um and there was Now there's 300,

there's 500. Let's say there's 500

liquidity and you sell a,000. You're

trying to sell a,000 at at 45. Then you

would sell the 561, but the remaining

400 something you would not sell. So

this is a very big distinction between

these two and it's important to

understand if you're going to implement,

you know, stop losses because let's say

that you place a stop-loss. Let's say

you place a a limit order to sell right

away because your position has moved

against you, but it's actually not

filled.

You know, what are you going to do? You

have to have some kind of monitoring in

place. And I'm also going to explain how

I have implemented that into Raven.

You also have good till cancelled. So a

good to can good till order is a limit

order that is active until it's

fulfillled.

So it kind of you know it's pretty

typical. you place an order. Let's say

you place an order here at 45 or 44.

It's going to just going to stay there

until it's filled and not do anything.

And then we have the good till date.

Order is a type of order that is active

until it's until it's specified date UTC

seconds timestamp

unless it has been fulfilled or

cancelled.

There's a security threshold of 1

minute. If the order needs to expire in

90 seconds, the correct expiration value

is now plus 1 minute plus 30 seconds. I

don't really understand what they mean

about this. So, there's a security

threshold of 1 minute. If the order

needs to expire in 90 seconds, the

correct expiration value is now plus 1

minute

plus 30 seconds. If you if you know what

they mean about this, leave a comment

down below because I don't really

understand what they mean here, but

that's okay. But I mean, it it kind of

makes sense. They're good till date. So,

you want to place a limit order. You

only want to have that, let's say, in 2

minutes or 3 minutes. After that, it's

going to expire. So, when you place an

order, it goes through different order

life cycle on Poly Market. You have

different statuses. And this is taken

from the documentation. But however

there's actually more statuses than this

that I have experienced when doing uh

trades but I'm going to go through

these. So we have the status that's

called match. So you place an order on

poly market you know it might be resting

on the order book. So nothing really

happens before something happens sort of

saying so when it's matched it means

that a trade has been matched and sent

to the executor service by the operator.

The executor service submits the trade

as a transaction to the exchange

contract. So you have to understand Poly

Market runs on blockchain. So first of

all you place an order through their

API. It's it goes to their centralized

servers on AWS. Now they're looking for,

you know, traders, sellers or buyers on

the order book. When they find someone

matching your order,

they going it's then matched, right? And

then it's going to be sent to be mined

onto the blockchain. Okay. And this is

when the next status happens. So the

status is mined. So the trade is

observed to be mined onto the chain. No

finality threshold established.

So it is going to be mined on the

blockchain. Okay. But before that

actually happens, it's sort of not

final. Something can still happen. It

can still be cancelled. How that's going

to hap happen, I'm not really sure, but

it can. And then we have the confirmed

status. This is where the order is

terminal. So the trade has achieved

strong probabilistic finality and was

successful. So you know on the

blockchain when you put a transaction on

the blockchain there's certain

confirmations that need to happen on the

blockchain before it's final. And this

is kind of what they wait for. And when

you have a certain amount of

confirmations well then they know that

it's confirmed. It have a strong

probabilistic finality and then it's

done. Okay. So this is what you need to

look for. There's also retrying and

failed and this kind of you know that

makes sense. So if you place let's say

you make a system in your trading bot to

place a stop-loss you have to monitor

your your positions to check if it's

actually confirmed or not. And u and

this is very important. It's something

that I have been working on implementing

into Raven. So the flow that I have been

working on is when we do the placement

and this is actually a different status

that they don't have in uh in this

overview here. So the placement is

basically just you place an order on the

on the order book and that's it. It's

now it's waiting to get matched. So the

placement when that happens I listen for

the user events. when we get the

placement, that's when uh we place the

order into what I call the pending order

tracker. Okay? And the pending order

tracker then just monitors for these

statuses over here that I just showed

you. And then when we get the matched,

that's when we take the order from the

pending order tracker over to the

position track. And now we actually have

a live position that we need to monitor.

And this is also where I implement the

stop loss. So with the the position

tracker uh tracks the position but it

also tracks the stop-loss. Okay. And it

tracks the the the order life cycle from

match to update mind confirmed and so

on.

And um so when it's confirmed you know

then we actually have an order live and

we need to monitor it. We need to track

it and that's when the stop loss is

actually activated. So I will just

quickly brief you on the position

monitor. We have different methods. So

for example, when we have the position

monitor, we have a start,

we have a start monitoring method that

basically just starts the the monitor,

right? And then we have a handle price

change. So the position monitor is

subscribing to certain events from the

event bus. Okay, so that's the events we

get from the user events. You can see

how it takes a processed event. If you

don't know what I'm talking about now,

watch some of my previous videos because

I've explained this in previous videos

and kind of explain the architecture of

this trading bot. And then you can see

here we have the check position P&L and

this again it just checks what is the

P&L of the position and we need this to

take profit. We need this to stop the

loss, stop loss, right? And then we

basically just checks this and uh we

have then a um a generate a generate

exit action over here. So we just check

if we have a stop loss and if that is

within the threshold that we are looking

for. We generate the exit action. Okay.

And that's then going to be published to

our executing layer. Currently I have

hardcoded the filler kill order type but

I will be changing this in Raven. So you

can choose how you want the bot to

behave, you know, fine grain things,

experiment and and stuff like that. But

for now, what I've done is to use the

fill or kill. And um I will show you

what happens in

here. So you can see here, this is a

real trade I did. So I've been doing

real trades, you know, not actually to

try to make money, but just to see

how the stop-loss works that I've

implemented.

So what I do is I did a mega order

first. Doesn't really matter if it's a

mega or take in this case. So I buy five

at 0.55.

And then the position monitor monitors

the position and looks for the P&L. If

the P&L is less than the threshold, I

think this it was 10% in this case, it's

uh going to execute a sell order. And I

did the fill or kill. And uh what

actually happened was it got killed

because you can see here from the time

the order is placed

on poly market the market already moved

against it and this is the risk that we

need to uh think about. So it was

actually killed even though I placed the

order on the best bit. So placing it on

the best bit should have made it a

market order but since you know the

market move you can see how rapidly it

moved down in this case. I think at the

time there was just no um orders at that

time and then was simply just killed and

then my system then it didn't the system

then keeps monitoring if the if the

order go through or not and in this case

it was killed so it placed another one.

So it it did a filler kill number two

here at uh 0.4378 4378 and then it was

actually filled but but uh I think um

here it was like 10% already and then it

when it was uh when it was finally

filled the second time you know it was

like down 20% or something. Um so yeah

that was uh not the best trade. Um but

you know we live and we learn and so I'm

I'm I'm tweaking this as I go along. And

of course in Raven which is you know the

the framework that I'm working on we

will be able to set the uh the you know

the different metrics do you want to

fill or kill and so on and so forth. So

yeah if you haven't seen already you

probably have maybe I'm building Raven

which is kind of still the project name

which is what I'm building here in

public. It's not just a trading bot I

built for myself, but it's actually a no

code strategy builder for prediction

markets. It's something that I'm

planning to release. And it's a, as I

said, it's a no code strategy build. You

can see how you can create these

different nodes and construct your own

strategy. So instead of spending, you

know, too long time on trying to build

a, you know, a Python bot from the

ground up, you will actually soon be

able to use this framework to build and

test uh your own strategies. Very easy,

very efficient. And uh now you can join

the weight list. So I'm still building

this. I'm building this in public on my

YouTube channel. So you can click here,

join the weight list, and then down here

you can provide your email. And if you

do that then you will actually be one of

the first in line to get access because

I will not be releasing this like you

know in a grand way. I'm just going to

be doing it um you know gradually first

take like you know maybe 10 people then

20 people then maybe 100 people and so

on so forth. So if you're on the early

access you will be getting access

earlier than everybody else. We also

have uh Poly Traders which is a free

discord community for prediction

markets. We have different channels such

as you know bot development. We have

strategy and data. We have predictions

crypto bite coding and we have a forum

where people there posting insights. So

it's a great way to uh meet other you

know traders, other builders, other

programmers and so on. And there's a lot

of nice alpha and insights in here. So I

really highly highly suggest you to join

it and it's free to join. Of course,

it's a free and open community for

everybody that's interested in

prediction markets, poly market,

calcium, and so on so forth. So, I've

made sure to leave links down below in

here in the description. You can find

the link to the weight list, and you can

find link to Discord. So, with that

said, I think it's all for now. I hope

it made sense. And if you have any

questions or if I said anything that was

not correct, please, you know, leave

your comment down below and uh let's

have a discussion. So, until next time,

see you and have a good one.