Based on our extensive analysis, the digital asset markets are trend following. We capture these trends by using various indicators over long and short time periods to identify the trend patterns and take positions accordingly. We use hard targets and stops and a comprehensive rule-based approach to risk management by employing automations that allow low cost diversification and scaling in trading multiple coins across a number of exchanges. Through our proprietary analytics engine built on the worlds fastest time series database, we are also able to determine when the market is not in momentum and is in a consolidated environment and keep our positions flat in those regimes. The strategy takes long or short positions depending on the direction of momentum and trend and use both spot and future markets to provide scalability.
The fully automated rule-based algorithms allow us to trade without any human errors and emotions.
The digital assets markets are unregulated and thus the announcements which causes big price moves either up and down are not fed by any medium and is almost like an insider information which takes time to filter to the wider market. These big moves are not traceable without an automated system looking for that extreme volatility which are caused when big players gets news directly and take or liquidate big positions. Our proprietary algorithm can identify the shock price jumps and can take long or short positions depending on the move. Currently, the movement of digital assets are largely influenced by media, news and politics. Therefore, we believe this strategy will provide a great edge if we can be reactive and take position promptly before the wider audience.
HIGH FREQUENCY MARKET MAKING
Market makers are critical providers of liquidity in markets as they constantly place bid and ask orders in the limit order book such that any market order will always be capable of being filled. Our goal is to strategically place these bids and asks to capture the spread, whilst earning a rebate for providing liquidity. The algorithms enable capturing profit by turning over positions in an extremely short period.
Market Making ModelOur high-frequency proprietary market making model provides optimal quote and a dynamic order size strategy to effectively control inventory risk and ensure profitability.
PricingOur high-frequency proprietary market making model provides optimal quote and a dynamic order size strategy to effectively control inventory risk and ensure profitability.
To complement the pricing model, we have developed a proprietary dynamic order size framework. If the inventory reaches the maximum permissible level, we are able to keep trading and earning rebates by adjusting the order size based on a function in relative to our current position, this function is very effective at controlling inventory risk.