Does Zero Maker Fee Make BTC/EURI a More Attractive Trading Pair?
Good morning, everyone!
As I mentioned in a recent post, I’ve been dedicating my free time to developing a simple crypto trading bot that analyzes market data and executes trades through paper trading—meaning no real money is at stake.
I’ve now created a basic version and begun conducting some backtests. One key observation was how significantly trading fees can affect performance, particularly with platforms like Binance that charge around 0.1% per trade.
While testing on Binance, I discovered that certain trading pairs, including BTC/EURI, offer zero maker fees—take a look at the screenshot I’ve attached.
This brings me to my question:
Is it beneficial to trade BTC/EURI instead of a more popular pair like BTC/USDC just to avoid the maker fee?
Are there any hidden costs or downsides I should be aware of, such as issues with currency conversion or liquidity? It seems like there must be a catch—after all, not everything can be a straightforward advantage.
Thanks in advance for your insights, and sorry if this question seems elementary. I’m still quite new to this and pursuing this project primarily to learn.
One response
Good morning!
Great to see you diving into the world of crypto trading bots—there’s so much to learn, and it sounds like you’re really engaged with the process.
When it comes to trading pairs like BTC/EURI with zero maker fees, there are a few factors to consider beyond just the absence of fees:
Liquidity: Pairs with zero maker fees might attract traders, but you should always check the trading volume and liquidity of BTC/EURI compared to BTC/USDC. If the liquidity is low, it may lead to higher slippage when executing your trades, which can affect profitability.
Market Dynamics: BTC/USDC is a more widely used pair, often better supported by various market participants and trading strategies. This can mean more direct price signals and less volatility compared to a less popular pair.
Currency Conversion Costs: Even if the maker fee is zero, converting EUR to USD (or vice versa) can incur costs if you’re not using a euro-denominated account. Always consider the total costs involved in holding and trading your assets.
Spread and Price Discrepancies: Sometimes less popular pairs can have wider bid-ask spreads, which can eat into profits. Compare the spreads for each pair to see how cost-effective trading them would be.
Regulatory and Tax Considerations: Depending on where you’re located, trading in different fiat currencies (like EUR vs. USD) might have tax implications. Be sure to understand your local regulations.
Ultimately, zero maker fees can certainly bolster your returns, but balancing it with factors like liquidity and market conditions is crucial for sustaining performance. It’s excellent that you’re paper trading—use this opportunity to experiment with both pairs and analyze the performance under different market conditions.
Happy trading, and good luck with your bot!