Hummingbot Strategy Hacks 101
Hummingbot currently comes with three main built-in trading strategies. A quick recap, these are:
- Pure-market making: the most general form of market making, placing bid and asks for a single token pair on a single exchange.
- Cross exchange market making (aka liquidity “mirroring”): making orders on one exchange (typically a less-liquid exchange, e.g. a DEX), and hedging those orders on another, more liquid exchange (e.g. Binance).
- Arbitrage: monitoring a single token pair (or equivalents, e.g. different stable coin pairs) and trading when there is a pricing dislocation (buy low, sell high).
But did you know that you could use these strategies as building blocks to create other trading strategies? As the Hummingbot team continues to build out the capabilities of Hummingbot, particularly additional exchange connectors and strategies, there are other strategies users can already derive from the existing three strategies above.