What is a maker order?
Maker is short for “market maker.” These people are the ones placing limit orders and providing liquidity for exchanges. If there were no market makers, there would be no orders in the books for you to buy (or take).
How can I tell if I’m a maker order?
If you place a sell order that is higher in price than the highest bid (buy) order, or you place a buy order that’s lower in price than the lowest sell order. In the following order book, the sell orders are in the red book, the buy orders are in the green book.
Let’s pretend we are selling tokens and want to be a maker order. The highest buy order (green book) is .00049130, so to be a maker order, your ask price would need to be .00049131 or higher. If you’re asking price is .00049131 (or higher), you will be a maker order and your order will be placed in the red order book and wait to be filled by someone.
Now let’s look at the order books if you plan on buying tokens and want to be a maker order.
The lowest sell order (red book) is .00049496, so for your buy order to be a maker order, your price would need to be .00049495 or lower.
Can I stack my order on an existing maker order and still be a maker order?
Yes. If you were selling and wanted to be one of the next orders to sell you could place your sell order at .00049496 (the lowest sell order in the red book) and still be a maker order.
If you were buying and wanted to be one of the next buy orders to fill, you could place your buy order at .00049130, and your order would be the next to fill (unless someone put a higher buy order before yours filled) and your order would also be a maker order.
What are the advantages and disadvantages of maker and taker orders?
Advantages: No fees, get a better price (depending on market conditions)
Disadvantages: Takes longer to fill your order. It could be hours, days, or months before the market gets to your ask price.
Advantages: Fills instantly, no waiting or worrying on when your order is going to fill.
Disadvantages: You must pay fees. Majority of the time you will get a lower sell price (or pay a higher buy price) than you would have had you placed a maker order, depending on market conditions.