A Swing Trader’s Dream: How Bake’s Direct Asset Swaps Beat the Competition

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Swing trading is a simple-to-understand yet difficult-to-master method for capitalizing on the sudden price changes in the volatile crypto market. 

What is Swing Trading?

Swing trading is an opportunistic trading strategy where traders take advantage of sudden price swings in the market. 

Unlike day trading, which requires multiple trades within a single day, swing trading can span from days to weeks, allowing traders to capitalize on more significant price movements. 

The keys to successful swing trading are:

Speed: Executing trades quickly to capitalize on price movements.Low Fees: Reducing the cost of trading to maximize net profits.Low Slippage: Ensuring the trade is executed at the expected price.

One of the biggest problems swing traders face is the gap between the “expected price” and the “actual price.”

The expected price is the value gained on the trade alone, while the actual price is the value gained after all fees and slippage have been accounted for.

This gap often catches new swing traders out, specifically due to most trading platforms requiring users to convert assets into stablecoins before making trades. 

This extra step not only increases costs but also introduces additional slippage, reducing a trader’s profits. 

The solution? Simplify the steps.

Bake’s direct asset swaps remove the need for stablecoin conversion, reducing fees and minimizing slippage.

Now you can swap the asset you have for the asset you need, without converting to stablecoin and incurring additional costs and effort.

The Traditional Approach: Stablecoin Intermediaries

Most trading platforms require traders to convert their assets into stablecoins (like USDT or USDC) before trading them for another asset. 

This two-step process incurs double the fees and often results in higher slippage, which can reduce a trader’s profits.

For example, on platforms such as Kraken or Coinbase, a typical trade involves:

Step 1: Converting ‘Asset A’ to a Stablecoin (incurring a fee)Step 2: Converting the Stablecoin to ‘Asset B’ (incurring another fee)

This double conversion increases transaction costs and exposes the trade to potential market fluctuations between the two steps.

Bake’s Approach: Direct Asset Swaps

Bake’s “Any Asset to Any Asset” swap functionality eliminates the need for stablecoin intermediaries, requiring only one transaction for any asset swap:

Single Transaction, Single Fee: By allowing direct swaps between any two assets, Bake reduces the transaction to a single step, halving the fees.Reduced Slippage: With only one transaction, the risk of price fluctuations between steps is minimized, resulting in lower slippage.

Cost Comparison

Example for a trader swapping $10,000 worth of Asset A for Asset B:

Coinbase (Two-Step Process):

Step 1: Asset A to Stablecoin ($10,000 * 0.50% = $50)Step 2: Stablecoin to Asset B ($10,000 * 0.50% = $50)Total Fee: $100

Kraken (Two-Step Process):

Step 1: Asset A to Stablecoin ($10,000 * 0.40% = $40)Step 2: Stablecoin to Asset B ($10,000 * 0.40% = $40)Total Fee: $80

MetaMask (One-Step Process):

Direct Asset A to Asset B Swap ($10,000 * 0.875% = $87.50)Total Fee: $87.50

Bake (One-Step Process):

Direct Asset A to Asset B Swap ($10,000 * 0.40% = $40)Total Fee: $40

Try Bake’s “Any Asset to Any Asset” Trading

Bake’s Any Asset to Any Asset trading eliminates the need for stablecoin intermediaries. It reduces the transaction steps, slippage, and fees — making it an optimal choice for swing trading.

You can try Bake’s “Any Asset to Any Asset” trading directly through the Bake app.

DISCLAIMER: Please note that the information on this blog and in any articles posted on this blog is for general information only and should not be relied upon as financial advice. Cake Pte. Ltd., Cake DeFi, UAB, and its affiliates (the “Cake Group”) are not licensed financial advisers. You may wish to approach your own independent financial advisor before making any decision to buy, sell or hold any product and/or digital assets mentioned in this blog.

Any views, opinions, references, assertions of fact and/or other statements are not necessarily the views held by the Cake Group. The Cake Group disclaims any liability whatsoever that may arise out of or in connection with such statements. Always do your own research before investing in any financial assets and consult a qualified financial advisor if necessary.

 

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