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V2 Strategies

Warning

V2 strategies are new and undergoing active development, so they are not yet officially released. Users may test out this pull request which contains the initial directional and market making strategy templates.

What are V2 Strategies?

Historically, Hummingbot's strategies were monolithic constructs, offering substantial reliability but limited adaptability. This model, while robust, posed adaptability challenges, especially for users without the Python experience needed to modify the code.

In contrast, V2 Strategies are designed to be:

  • Composable: V2 strategies are modular and designed to facilitate seamless integration and detachment of components, ensuring rapid and efficient strategy modification to adapt to dynamic market conditions.
  • Backtestable: Critical for any professional trading strategy, V2 strategies are designed to be backtested using market data across large-scale simulations.
  • Accessible: V2 strategies are designed to be created, backtested and deployed using Dashboard, providing access to both non-technical and technical users alike.

Architecture

V2 strategies are composed of various components that the user defines via a Script entry point:

  • Candles: Candles structure both historical and real-time market data into seamless OHLCV candles and synthesize refined signals to inform trading decisions.
  • Controllers: Responding to signals generated by Candles, Controllers orchestrate the overall strategy, determining which Executors to deploy, adjust, or retire.
  • Executors: The operational arm of the strategy, Executors are self-encapsulated logical elements that ensure precise trade execution, timely response to market dynamics, and meticulous order lifecycle management.

Strategy Templates

Synchronicity between controllers and executors is paramount for seamless trading operations. Given their specialized nature, they require harmonization for optimal strategy execution. Recognizing this, we are creating dedicated templates for various trading paradigms, providing traders with harmonized base classes for Controllers, Executors, as well as Exeutor Handlers that perform essential bridging.

See this pull request for the work-in-progress initial V2 strategy templates: https://github.com/hummingbot/hummingbot/pull/6520

Market Making Strategies

These templates will allow users to create composable market making strategies. Watch this video for an introduction on how it works:

Directional Strategies

These templates will allow users to strategies that use technical indicators to trigger the creation of long and short Position Executors.

Watch this video from a Botcamp Cohort 4 student who used an early version of the directional executors:

Grid Strategies

Slated for future release is the Grid strategy template, conceived for traders specializing in grid trading strategies. This framework will facilitate the placement of diversified orders across a spectrum of price points, ensuring gains amidst market volatilities.

Watch this video about the Fixed Grid script that is the predecessor for this template:

Arbitrage Strategies

A more powerful version of Hummingbot's V1 arbitrage strategies, this template will separate identificatin of arbitrage opportunities from execution, allowing users to generate customized trading signals and run multiple Arbitrage Executors.

Watch this video for a preview: