Short-term algorithmic trading strategies

[dadpitz]

There are various approaches described in the literature that claim to reliably predict short-term price movements in the range of approx. 1 minute. While the results concerning prediction accuracy look promising, I still wonder how one could leverage such approaches. Background: I've written a simulator which so far implements two basic trading strategies on historical data. The first strategy is straightforward in that it simply market buys/sells an asset when the simulated prediction indicates an upward/downward movement, respectively. Not surprisingly, exchange fees of say 0.1% more than eat up the profits (the relatively high volatility of most coins compared to shares etc. is apparently not sufficient to outweigh the fees for such short time frames). The second strategy I tried is to place limit orders (price = highest bid / lowest ask) to avoid taker fees. However, the probability with which an order gets filled seems to be very low, particularly since the predicted price movement points to the "opposite" direction. As I'm relatively new to algorithmic trading, I googled for market making strategies and studied some papers but didn't really find a solution. Does anybody have similar experiences or hints to related literature? Thanks!

[1714654682]

1714654682

[Bitcoin_Arena]

I did think about this too but i don't think it's possible with cryptomarkets.
Crypto exchange trading fees aside, Volatility is a very big challenge that just makes those algorithmic trading strategies not to work ot well and i think that's why there is not so much literature about what you are seeking for.

[musino33]

Have you considered using exchanges that offer rebates? This means that you are paying no fees as long as you do limit orders only. Instead you will earn in the range of 0.025-0.050% per trade. This is your payment for providing liquidity. This kind of fee structure should make market making strategies a lot more viable. 

I know Bitmex is offering 0.025% rebates. HitBTC provides rebates too but only if you are trading more than 6000 BTC in volume.     

If none of these sound particularly appealing to you, you can pm me. I work for an upcoming exchange that will offer better rebates than Bitmex. I could possibly make you one of our main market makers, with the benefits that entails.

[BlackPanda]

I did think about this too but i don't think it's possible with cryptomarkets.
Crypto exchange trading fees aside, Volatility is a very big challenge that just makes those algorithmic trading strategies not to work ot well and i think that's why there is not so much literature about what you are seeking for.

It's better to trade naturally, so we will learn to make various decisions. By itself, we have full power over what we do. Basically doing trading is a simple thing, we only need to sell coins that we have far more expensive than when we buy them. Let's think carefully and don't lose opportunities. Every trader has the opportunity to be successful, so let's do the best and we will achieve success together.

[anthon.stephens]

Look ready-made solutions. There are a lot of trading bots working with the crypt and various exchanges. Each has its advantages and disadvantages. If you want to write your own, the study of competitors will help to see the market of bots, on the other hand. You can take into account all the developments and write something worthwhile. In other matters, like traders (people) and bots have the same problems. In the long run, everyone works in a minus. The main difficulty is to work in a multithreaded mode, launching one bot over several trading pairs. Many exchanges limit the work on requests to the API. Accordingly, a high-frequency waiting for a periodic ban and possible losses in trade.

[akram143]

If anyone want to get daily profit he need to buy first and sell fast then only I can manage his profit every time to be a more higher income at the end of the month so this strategies will be very useful for everyone to get the profit everytime very easily but it need some experience also.

[whirlcoin]

There are various approaches described in the literature that claim to reliably predict short-term price movements in the range of approx. 1 minute. While the results concerning prediction accuracy look promising, I still wonder how one could leverage such approaches. Background: I've written a simulator which so far implements two basic trading strategies on historical data. The first strategy is straightforward in that it simply market buys/sells an asset when the simulated prediction indicates an upward/downward movement, respectively. Not surprisingly, exchange fees of say 0.1% more than eat up the profits (the relatively high volatility of most coins compared to shares etc. is apparently not sufficient to outweigh the fees for such short time frames). The second strategy I tried is to place limit orders (price = highest bid / lowest ask) to avoid taker fees. However, the probability with which an order gets filled seems to be very low, particularly since the predicted price movement points to the "opposite" direction. As I'm relatively new to algorithmic trading, I googled for market making strategies and studied some papers but didn't really find a solution. Does anybody have similar experiences or hints to related literature? Thanks!

yes while we are doing the short-term trading it will give lots of pressure and tension if the value of suddenly gone to low value at the time we don't have need to be panic at the situation so you need to be more careful with your trading experience will helpful for doing some strategies like this

[rizkyhiw]

I did think about this too but i don't think it's possible with cryptomarkets.
Crypto exchange trading fees aside, Volatility is a very big challenge that just makes those algorithmic trading strategies not to work ot well and i think that's why there is not so much literature about what you are seeking for.

It's better to trade naturally, so we will learn to make various decisions. By itself, we have full power over what we do. Basically doing trading is a simple thing, we only need to sell coins that we have far more expensive than when we buy them. Let's think carefully and don't lose opportunities. Every trader has the opportunity to be successful, so let's do the best and we will achieve success together.

Yes it is true that it is the basis of trading by buying at very cheap prices and selling at high prices after pumping, it looks very simple but we also have to take advantage of a very good time by doing analysis to be able to enter when the pumping will occur and that is also not simple because the crypto market is very difficult to predict and therefore not too difficult to think about, as much as possible not to be ambitious in trading.

[1Referee]

It's better to trade naturally, so we will learn to make various decisions. By itself, we have full power over what we do. Basically doing trading is a simple thing, we only need to sell coins that we have far more expensive than when we buy them. Let's think carefully and don't lose opportunities. Every trader has the opportunity to be successful, so let's do the best and we will achieve success together.

Humans 'naturally' can't put their emotions aside, which bots don't have to deal with. You have to look at charts, shift through the different hourly, weekly and monthly time frames, which takes a good while to figure out what's going on, while a bot knows what the state of the market is and execute plenty of trades in the process.

I think what you are referring to is more long term buy low sell high type of investing, which you indeed don't need a bot for, but you can do both buy low sell high investing, and have a bot do very short term trading, which due to the increasing volatility becomes more of an interesting option.

[bisdak40]

If anyone want to get daily profit he need to buy first and sell fast then only I can manage his profit every time to be a more higher income at the end of the month so this strategies will be very useful for everyone to get the profit everytime very easily but it need some experience also.

I think you mean here, buy low then sell high. But how could you predict that the price you are now into is much lower when you sell it? Price of crypto is volatile and unpredictable so for us to be able to gain profit we need some sort of an insider that will give us the signal of when to but that particular coin because it would pump in the later days.

[traderethereum]

I only use hourly for the interval in the market because it makes me don't have a problem to predict where the price wants to moves. But if I want to trade more than 5 times, then I will change the interval to 30 minutes and still watching the order movements.
But I realise to make daily trade will be riskier than the weekly trade because we need more skills to predict the price and we also need to know how to analyse the chart, the order price and the trend.
But I don't use any algorithmic method since I don't have the skills to do that. I prefer to watch closer to the market and do what I can do. I only know that buy low and sell high will the best strategies in trading.

[gilangIDR]

If anyone want to get daily profit he need to buy first and sell fast then only I can manage his profit every time to be a more higher income at the end of the month so this strategies will be very useful for everyone to get the profit everytime very easily but it need some experience also.

I think you mean here, buy low then sell high. But how could you predict that the price you are now into is much lower when you sell it? Price of crypto is volatile and unpredictable so for us to be able to gain profit we need some sort of an insider that will give us the signal of when to but that particular coin because it would pump in the later days.

That is a problem, that we will never be able to easily predict price movements. What needs to be considered is that we must frequently monitor price movements, because when we miss seeing the market we can lose momentum. This momentum is what we use to gain a number of advantages in buying and selling coins that we want.

[Bitinity]

I only use hourly for the interval in the market because it makes me don't have a problem to predict where the price wants to moves. But if I want to trade more than 5 times, then I will change the interval to 30 minutes and still watching the order movements.
But I realise to make daily trade will be riskier than the weekly trade because we need more skills to predict the price and we also need to know how to analyse the chart, the order price and the trend.
But I don't use any algorithmic method since I don't have the skills to do that. I prefer to watch closer to the market and do what I can do. I only know that buy low and sell high will the best strategies in trading.

Yap it is complicated to use algorithmic trading strategies, IMO it is for pro traders only who do trades in daily basis.
Buy low sell high is the basic strategy of trading, it is easy to be said but it is hard to be implemented as well. It is hard to find the right time to buy especially in this current market condition.

[Ailmand]

Algorithmic trading strategies might be too complicated if you try it without having enough knowledge and skills about trading. It might lead you closer to risks. I think if you're not a full-time trader, it would be better to focus on the usual and well-known strategy that we all know.

[Zadicar]

I only use hourly for the interval in the market because it makes me don't have a problem to predict where the price wants to moves. But if I want to trade more than 5 times, then I will change the interval to 30 minutes and still watching the order movements.
But I realise to make daily trade will be riskier than the weekly trade because we need more skills to predict the price and we also need to know how to analyse the chart, the order price and the trend.
But I don't use any algorithmic method since I don't have the skills to do that. I prefer to watch closer to the market and do what I can do. I only know that buy low and sell high will the best strategies in trading.

Yap it is complicated to use algorithmic trading strategies, IMO it is for pro traders only who do trades in daily basis.
Buy low sell high is the basic strategy of trading, it is easy to be said but it is hard to be implemented as well. It is hard to find the right time to buy especially in this current market condition.

Better stick out into that basic stuff rather than forcing yourself to use up that algorithmic trading strats yet these things are already needing sufficient knowledge and experience for
you to able to cope up with these strategies.These things will really be complicated into those traders who havent much experience towards trading.

[Bitinity]

I only use hourly for the interval in the market because it makes me don't have a problem to predict where the price wants to moves. But if I want to trade more than 5 times, then I will change the interval to 30 minutes and still watching the order movements.
But I realise to make daily trade will be riskier than the weekly trade because we need more skills to predict the price and we also need to know how to analyse the chart, the order price and the trend.
But I don't use any algorithmic method since I don't have the skills to do that. I prefer to watch closer to the market and do what I can do. I only know that buy low and sell high will the best strategies in trading.

Yap it is complicated to use algorithmic trading strategies, IMO it is for pro traders only who do trades in daily basis.
Buy low sell high is the basic strategy of trading, it is easy to be said but it is hard to be implemented as well. It is hard to find the right time to buy especially in this current market condition.

Better stick out into that basic stuff rather than forcing yourself to use up that algorithmic trading strats yet these things are already needing sufficient knowledge and experience for
you to able to cope up with these strategies.These things will really be complicated into those traders who havent much experience towards trading.

Sure we should not force ourselves to use something that we have no basic knowledge about it, but we can try to learn about it to go to the next level of our trading skills. Sticking on one usual thing is basically not so good principal as we will stuck on that step without any progress, so if there is a chance to learn something new then we should not waste the chance.

[Haunebu]

These strategies hardly ever work in the long run in this extremely volatile market while they are far more effective in the stock markets which is why I don't concern myself with such strategies and only focus on long term trading.

Buying and HODLING for the long term has almost always helped me gain profits in the long run.

[LimLims]

See dude,  to be very honest and frank,  there is no such strategies that do work when you use it for second time or next time.
Yeah but i am not denying that it doesn't work for second time,  i mean it does works but it may be due to pure luck.
And secondly many people love to losse their money with their own strategy,  if they lose through any other people's stratergy then they just simply blame the pther people.
By the way your strategy seems to me pretty fine.

[klaaas]

However, the probability with which an order gets filled seems to be very low

Maybe calculate the volume movements and adjust the buy and sell amounts on that. It will make sure order go trough. What are the short time spans your trading against ?

[traderethereum]

I only use hourly for the interval in the market because it makes me don't have a problem to predict where the price wants to moves. But if I want to trade more than 5 times, then I will change the interval to 30 minutes and still watching the order movements.
But I realise to make daily trade will be riskier than the weekly trade because we need more skills to predict the price and we also need to know how to analyse the chart, the order price and the trend.
But I don't use any algorithmic method since I don't have the skills to do that. I prefer to watch closer to the market and do what I can do. I only know that buy low and sell high will the best strategies in trading.

Yap it is complicated to use algorithmic trading strategies, IMO it is for pro traders only who do trades in daily basis.
Buy low sell high is the basic strategy of trading, it is easy to be said but it is hard to be implemented as well. It is hard to find the right time to buy especially in this current market condition.

Better stick out into that basic stuff rather than forcing yourself to use up that algorithmic trading strats yet these things are already needing sufficient knowledge and experience for
you to able to cope up with these strategies.These things will really be complicated into those traders who havent much experience towards trading.

Sure we should not force ourselves to use something that we have no basic knowledge about it, but we can try to learn about it to go to the next level of our trading skills. Sticking on one usual thing is basically not so good principal as we will stuck on that step without any progress, so if there is a chance to learn something new then we should not waste the chance.

But we need to suggest the OP to learn the basics of trading first before he learns short-term algorithmic trading strategies because that is important to understand the basics first than to jump into intermediate lesson. But we cannot force him to stop to learn that strategy especially if he feels that he cannot make a profit from the basics. But I don't know that he could get a profit too if he doesn't understand the basics.