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What Are the Major Types of Strategies Being Used in Crypto Market-Making Bots? - Printable Version

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What Are the Major Types of Strategies Being Used in Crypto Market-Making Bots? - smithtaylor - 10-01-2024

Spread Strategy:
 Bots place simultaneous buy and sell orders at slightly different prices, profiting from the spread between the bid and ask prices. This helps maintain liquidity in the market.
Rebalancing Strategy
Bots constantly rebalance asset holdings by buying and selling based on market conditions, ensuring that the portfolio remains balanced while capturing price differences.
Ping-Pong Strategy:
 The bot sets a buy order and, once it gets filled, immediately places a sell order at a higher price. It keeps “pinging” between these two actions to generate small, continuous profits.
Time-Weighted Average Price (TWAP)
This strategy divides large orders into smaller ones, executing them over time to avoid sudden price impacts and reducing the risk of slippage.
Grid Trading
The bot sets predefined price levels (grid) and places buy orders at lower levels and sell orders at higher levels, capturing profits as the market moves within the grid.



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