Continuous Trading denotes a market structure where trading activity for assets, including cryptocurrencies, occurs without interruption throughout the trading day or period. Orders are matched and executed as they arrive, providing constant price discovery and immediate transaction opportunities. Its purpose is to offer sustained liquidity, enable constant price reflection of supply and demand, and facilitate rapid responses to market-altering information or events, differing from periodic auction systems.
Mechanism
The mechanism involves an automated matching engine that continuously processes incoming buy and sell orders. As orders are submitted, they are immediately compared against existing orders in the order book. If a match is found at an agreeable price, a trade is executed instantaneously. Unmatched orders are placed into the order book, awaiting a counterparty. This system relies on high-speed data transmission and low-latency processing to maintain real-time operation.
Methodology
The methodology of continuous trading relies on an always-on operational architecture, ensuring system uptime and data integrity for constant market access. Market participants, including automated trading systems, continuously monitor order books and market data to place or adjust orders in real-time. This structure enables strategies requiring immediate execution or continuous price monitoring. Effective system design prioritizes fault tolerance and rapid recovery to sustain uninterrupted market functionality.
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