submitted by cgambit
Joining a competition always ignites excitement and nostalgia for me. More than winning, I value the immersion with smarter and more skillful individuals. Over time, I've come to realize that competitions are platforms for peak performance, offering boundless chances to share and learn.
The Hummingbot Bot competition is such an exceptional opportunity for both students and the wider community to refine their skills in devising and tailoring trading strategies. This event could be the birthplace of innovative trading ideas, unveiling new edges and profitable strategies.
Having participated in the beta competition, I can attest to its impact. Weeks after its conclusion, I felt compelled to explore and harness the potential of Hummingbot's new scripts. The competition gifted me insights, spurring my eagerness to tailor my strategies using Hummingbot Scripts feature.
In hindsight, I could have been better prepared. While I scanned the Hummingbot scripts repository, I did not test them practically. Instead, I operated mostly on mental planning. Ultimately, I opted for the Pure Market Making (PMM) strategy, my familiar ground with Hummingbot.
This time, I ventured to experiment with something I had been pondering over: the Ping-Pong feature of PMM strategy. Using just one order level and setting spreads between 3-5%, I aimed to harness the volatility of a chosen market pair, and then pivoting to another pair when its volatility diminished.
I began searching for volatile pairs on Binance and settled on PERL-USDT, which showed sharp spikes of over 10% in both directions. With anticipation, I activated my bot, eager to see if my strategy would prove effective. Initially, the results were promising, confirming that the ping-pong feature excels in volatile markets.
However, I soon recognized a flaw in my approach. The competition rules prohibited manual transactions. At a crucial juncture, I wished my bot could sell the asset immediately to secure profits before I could switch to another volatile pair. I should have incorporated a 'market' order type in a separate script. It was at this point that I realized the limitations of my strategy.
I chose to adhere to the competition rules, allowing the bot to navigate through the market's volatility. I have resolved also not to switch to a different pair anymore as the bot's exit issue would persist regardless. Additionally, selecting volatile pairs is also a manual process that goes indirectly against the competition's objectives. I have realized that identifying high volatility pairs should ideally be automated within scripts.