> For the complete documentation index, see [llms.txt](https://tradewithonyx.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://tradewithonyx.gitbook.io/docs/trading/twap.md).

# TWAP

## What is TWAP?

TWAP (Time-Weighted Average Price) is an order execution strategy that breaks a large order into smaller trades, executed at regular intervals over a set duration.

Instead of placing one large order that may impact price, TWAP helps smooth execution, reducing slippage and market impact.

<figure><img src="/files/15NMIAxy2PEZnq65Sw3P" alt="" width="354"><figcaption></figcaption></figure>

### How TWAP works

The TWAP order specifications can be split into 4 distinct components:

1. Order Size – The user specifies the total amount to buy/sell.
2. Duration – The time over which the order will be executed.
3. Intervals – The order is split into smaller chunks, executed evenly at each interval.
4. Execution – Orders are placed automatically until the total size is filled.

To understand: Buying **50 BTC** over **1 hour** with **12 intervals** intends that the system will execute **\~4.167 BTC** every **5 minutes**.

***

### Randomize mode

When Randomize mode is enabled:

* The system slightly varies the size and/or timing of each order.
* This makes execution less predictable and harder to track.
* Helps mitigate predatory algorithms or bots attempting to anticipate TWAP orders.

To understand: Instead of executing exactly **\~4.167 BTC** every **5 minutes**, the system may execute 3.5 BTC, then 5.1 BTC, with timing offsets of a few seconds.

***

### Reduce-Only Mode

When Reduce-Only mode is enabled:

* The TWAP will only reduce your current position.
* It prevents the strategy from flipping your position (e.g. closing a long and accidentally opening a short).

This ensures TWAP is used strictly for scaling out, not scaling in.


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