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by hisabness 3050 days ago
How did you come up with the calculations for moving prices on GDAX? I’m curious about how to do that math. Thanks.
1 comments

Pretty simple really. GDAX already does the calculations for you.

https://www.gdax.com/trade/BTC-USD

Move your mouse around the order book (the "bottom" chart). It indicates the current order book. There's some dude selling 0.0406 BTC at $8380. But then there's another dude selling 1.467 BTC at $8385.

If you wanted to buy ~2 BTC, you'd "run out" of BTC to buy at $8380.0. So you also buy the BTC up to $8381, $8382... etc. etc. until you get all the BTC you need. This increases the price to $8385.

Obviously, the numbers will be different by the time you see my post, but you get the idea. In essence, if you buy out the supply of BTC on the market, you increase the price. Even at ~$100 to $1000, you are already moving the market up and down a little bit, and when you get into the $millions, you start to really affect the market by a significant amount. If you watch the BTC charts long enough, you'll see some $5 Million+ orders come by and swing the price of BTC by $500 or so.

Note that this information is also available for the Stock Market. Its why people pay attention to a number called "volume", the more trades that happen, the less your particular trade affects the market.