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Strategies

A Hummingbot strategy is a continual process that monitors trading pairs on one or more exchanges in order to make trading decisions. Strategies separate trading logic, open source code that defines how the strategy behaves, versus parameters, user-defined variables like spread and order amount that control how the strategy is deployed against live market conditions. Strategy parameters are stored in a local config file that is not exposed externally.

Strategies utilize the standardized trading interfaces exposed by exchange and protocol connectors, enabling developers to write code that can be used across many exchanges. Each Hummingbot strategy is a sub-folder in the /hummingbot/strategy folder.

Strategy types

Hummingbot offers the following automated trading strategies, each with its own set of configurable parameters.

  • Market making: strategies that provide liquidity to a market
  • Arbitrage: strategies that exploit differences between markets
  • Utility: other strategies

Maintainer

Strategy maintainers are responsible for responding to community feedback, fixing bugs, and actively improving the strategy over time.

As the creator of Hummingbot, CoinAlpha maintains for most strategies, particularly the market making strategies. As the number of strategies grows, however, CoinAlpha will enable other community members to contribute and maintain strategies.

Customizing strategies

These strategies are meant to be basic templates. We encourage users to extend these templates for their own purposes, and if they so desire, share them with the community.

Developers may submit strategies for review. Please note the Contribution Guidelines. For developers interested to create or customize their own strategies, please see Strategies in the Developers section.

List of strategies

Market making

Market making strategies help you provide liquidity to an exchange while mitigating risk by dynamically repositioning and/or hedging your orders.

Name Valid Exchanges Maintainer Description
avellaneda_market_making spot CoinAlpha Single-pair market making strategy based on the classic Avellaneda-Stoikov paper
aroon_oscillator spot Modified version of Pure Market Making that uses Aroon technical indicator (Open DeFi hackathon winner)
cross_exchange_market_making spot CoinAlpha Provide liquidity while hedging filled orders on another exchange
liquidity_mining spot CoinAlpha Provide liquidity on multiple pairs using a single base or quote token
perpetual_market_making perp CoinAlpha Market-making strategy for perpetual swap markets
pure_market_making spot CoinAlpha Our original single-pair market making strategy
uniswap_v3_lp uniswap-v3 CoinAlpha Manage liquidity positions on Uniswap-V3 style AMMs

Arbitrage

Arbitrage strategies help you monitor different markets for opportunities to realize an arbitrage profit and capture them when they arise.

Name Valid Exchanges Maintainer Description
amm_arb spot, amm CoinAlpha Exploits price differences between AMM and spot exchanges
arbitrage spot Exploits price differences between two different spot exchanges
celo-arb celo Exploits price differences between Celo and other exchanges
spot_perpetual_arbitrage spot, perp CoinAlpha Exploits price differences between spot and perpetual swap exchanges

Arbitrage is the buying and selling of an asset in order to benefit from a difference in the price of the asset between markets. To explore arbitration further, here are a few helpful links.

Utility

Name Valid Exchanges Maintainer Description
hedge perp Hedges spot exchange inventory risk using perpetual swaps (dYdX hackathon winner)
twap spot Places a batch of limit orders over a period of time
vwap spot Places a batch of limit orders based on order book volume

ℹ️ More Resources

Strategy coding for dummies: This article is a blog post submission from our of our users. It is not directly related to TWAP strategy, but it demos how you can write a custom script for cross exchange market making strategy

Create a Custom Strategy | Hummingbot Live: Learn about creating custom strategies with Paulo. Hummingbot lets you customize your strategies by configuring your bots to optimize its maximum potential in liquidity providing.

Check out Hummingbot Academy for more resources related to this strategy and others!


Last update: 2022-04-29