Trading Strategies

Shares practical strategies, techniques, and risk management methods. By combining market case studies with technical analysis, it helps traders optimize decision-making and enhance profitability.

86% Return? How to Use a Bot to 'Earn Passively' on Polymarket

This article details the development and backtesting of an automated trading bot for the "BTC 15-minute UP/DOWN" market on Polymarket. The author identified market inefficiencies and automated a manual strategy to exploit them. The bot operates in two modes. In manual mode, users can directly place orders. In auto mode, it runs a two-leg cycle: First, it observes the market for a set time after a round begins. If either the "UP" or "DOWN" side drops by a specified percentage (e.g., 15%) within seconds, it triggers "Leg 1" and buys the crashed side. It then waits for "Leg 2," a hedging trade on the opposite side, which is only executed if the sum of the Leg 1 entry price and the opposite ask price meets a target threshold (e.g., ≤ 0.95). Due to a lack of historical market data from Polymarket's API, the author created a custom backtesting system by recording 6 GB of live price snapshots over four days. A conservative backtest with parameters of a 15% crash threshold and a 0.95 sum target showed an 86% ROI, turning $1,000 into $1,869. An aggressive parameter set resulted in a -50% loss, highlighting the critical role of parameter selection. The author acknowledges significant limitations of the backtesting, including its short data period, failure to model order book depth, partial fills, variable network latency, and the market impact of the bot's own orders. Future improvements include rewriting the bot in Rust for performance, running a dedicated node, and deploying on a low-latency VPS.

marsbit12/30 04:07

86% Return? How to Use a Bot to 'Earn Passively' on Polymarket

marsbit12/30 04:07

XRP price outlook: Why rallies toward THIS may attract sellers

XRP posted modest short-term gains but remains in a longer-term bearish trend, influenced by Bitcoin's recent bounce above $90k. The moving averages show a bearish crossover, with key support levels at $1.90 and $1.61 being tested. Weak demand and a lack of bullish momentum suggest any price rally, particularly toward the $1.95-$2.05 supply zone, should be viewed as a selling opportunity. A shift to a bullish trend would require a strong breakout above $2.05 alongside Bitcoin surpassing $94.5k, though this scenario is considered unlikely. Traders are advised to maintain a bearish bias unless key resistance levels are broken.

ambcrypto12/29 21:01

XRP price outlook: Why rallies toward THIS may attract sellers

ambcrypto12/29 21:01

Silver Soars: 25% Surge in 10 Days, Should You Chase or Run Now?

Silver prices surged 25% in 10 days, driven by China's announcement of export licenses for silver starting January 1, creating a significant physical supply squeeze. Key bearish risks include potential tax-related selling in early January, a stronger US dollar, and CME margin hikes—though the latter is less impactful than in 2011 due to already-high margin requirements. The copper substitution narrative is overhyped; transitioning solar production would take at least 4 years, and silver demand remains inelastic until prices reach ~$134/oz. Bullish factors dominate: severe backwardation in London, massive physical premiums in Shanghai ($$91/oz vs. COMEX $$77/oz), and China's export restrictions tightening global supply. Solar/AI demand is structurally accelerating, with silver use in photovoltaics expected to rise. Speculative positioning isn't crowded, and ETFs are accumulating. Volatility has repriced, anticipating further upside. Short-term pullbacks are likely, but the long-term structural bull case remains intact.

marsbit12/29 07:35

Silver Soars: 25% Surge in 10 Days, Should You Chase or Run Now?

marsbit12/29 07:35

Bitcoin is About to Choose a Direction, How to Respond Flexibly | Invited Analysis

Bitcoin is approaching a critical directional decision after an extended period of consolidation. Since reaching its all-time high of $126,200 in October, BTC has been in a confirmed medium-term downtrend, with a maximum drawdown of approximately 36% over 82 days. Technical indicators suggest the market is in an oversold area, and a directional breakout is imminent. Last week’s price action validated the analyst’s core view of wide-range oscillation between key levels. Two short-term trades were executed within the defined resistance zone of $89,500–$91,000, yielding a total return of 3.62%. The current analysis suggests that, in the absence of sudden news, a likely scenario involves a final downward move breaking the $80,000 psychological support to flush out remaining long positions before a potential reversal and technical rebound. This week (Dec 29–Jan 4), the market is expected to test the $86,000–$86,500 support region. A break below could lead to a decline toward $83,500–$84,500, while holding may extend the current consolidation. Two short-term trading plans are proposed based on whether this support holds or breaks, using 30% position sizing with strict stop-loss and trailing stop protocols. Key macro events this week include the release of the FOMC meeting minutes and US jobless claims data, which may influence medium-term interest rate expectations and market liquidity sentiment.

marsbit12/29 05:39

Bitcoin is About to Choose a Direction, How to Respond Flexibly | Invited Analysis

Odaily featured market analyst Conaldo provides a weekly trading report on Bitcoin (BTC). Last week, the strategy of shorting within the defined resistance zone of $89,500–$91,000 was successfully performed twice, yielding a total return of 3.62%. The core view that the market would experience wide-range volatility was validated, with price action accurately testing the identified support and resistance levels. From a technical perspective, BTC has been in a confirmed medium-term bearish trend since its historic high on October 6th, with a maximum drawdown of approximately 36% over 82 days. However, multiple technical indicators suggest the market is approaching oversold conditions historically associated with bottoms. Since November 22nd, price has consolidated in a low-range, indicating a balance between bullish and bearish forces and a buildup of energy for a directional breakout. A key possibility is presented: if the market is dominated by major players, a strategic move for bears could be to break down below the critical psychological level of $80,000. This would flush out remaining long positions via panic selling, potentially forming a final bottom before a powerful technical rebound. **This Week's Outlook (Dec 29 - Jan 4):** The market is expected to oscillate with a bearish bias, with the core area to watch being **$86,000–$86,500**. * A break below could lead to a test of the **$83,500–$84,500** support zone. * Holding above could extend the current **$86,500–$91,000** consolidation. **Trading Strategy:** * Maintain a **65% core short position**. * Use **30% of capital** for short-term "spread" opportunities based on support/resistance levels. * Two contingency plans (A/B) are provided for price action relative to the $86,000–$86,500 zone, involving short entries on bounces or breakdowns, with defined stop-loss and take-profit levels. **Key Events to Watch:** * **Fed Meeting Minutes (Wed):** Clarity on internal divisions regarding the timing and pace of rate cuts could impact medium-term liquidity expectations. * **Initial Jobless Claims (Wed):** A sustained increase could reinforce cooling labor market narratives, supporting looser monetary policy expectations. * **Manufacturing PMI Final (Fri):** Will help gauge the "soft landing" narrative and overall risk asset sentiment. *All analysis is based on technical models and is for informational purposes only, not investment advice. DYOR. Market risk exists.*

Odaily星球日报12/29 05:35

2026, Survive: A Manual for Crypto Enthusiasts on Bear Market Survival and Counterattack

"Surviving 2026: A Bear Market Survival and Counterattack Guide for Crypto Participants" This article provides strategic advice for navigating the prolonged crypto bear market of late 2025, characterized by stagnation between $85k-$90k for Bitcoin and declining retail activity. The author, a seasoned participant, outlines a multi-faceted approach. Key strategies include: * **Crypto-Stock Dual Strategy:** With liquidity drawn to rising AI-inflated stock markets, engaging with both asset classes is now essential. Investors should leverage their crypto-honed news trading skills in traditional markets via brokers or tokenized stock platforms (e.g., MSX.com, xStocks). * **Commodities as a Hedge:** Amidst tense global macro-political tensions, precious metals (gold, silver) and strategic resources (copper, lithium) are predicted to continue rising, serving as reliable hard assets. These can be accessed via tokenized assets. * **Defensive Yield Strategies:** For capital preservation, a combination of staking (on exchanges or within ETH/SOL ecosystems), lending on robust DeFi protocols (e.g., Aave, Kamino), and participating in high-yield CEX deposit/earn programs is recommended to build "anti-fragile" income streams. * **Betting on Prediction Markets:** With major events like the World Cup and US mid-term elections, prediction markets (e.g., Polymarket's upcoming token launch) are poised for significant growth. Strategies involve "buying early" on probable outcomes or following successful bettors, while avoiding risky "sweeping the tail" bets. The conclusion highlights the growing convergence of AI and crypto, specifically pointing to Solana's prioritization of the x402 protocol for AI-powered payments as a key trend for 2026. The overarching message is to diversify strategies, preserve capital, and stay agile to survive the downturn and capitalize on the next bull market.

Odaily星球日报12/28 04:24

2026, Survive: A Manual for Crypto Enthusiasts on Bear Market Survival and Counterattack

Odaily星球日报12/28 04:24

The Advancing MM 1: Market Maker Inventory Quoting System

The article "Advancing MM 1: Market Maker Inventory Quoting System" explains why retail traders often experience price movements against their positions after buying altcoins. It argues this is not due to market manipulation but is a result of automated market maker (MM) systems responding to inventory risk and toxic order flow. When traders place large buy orders, MMs sell inventory, creating a short exposure. To mitigate this risk, MMs adjust their pricing using the Avellaneda-Stoikov model. They skew quotes lower to attract sellers and widen spreads to reduce transaction probability, aiming to return inventory to a balanced state while protecting against adverse selection. The reservation price, central to this model, is calculated as the mid-price adjusted by inventory levels and risk aversion. The article notes that retail traders are particularly affected because their orders are often large, concentrated, and not hedged—especially in low-liquidity altcoins. A suggested strategy for traders is to break large orders into smaller, less detectable increments, allowing them to buy at progressively better prices as the MM’s quoting system reacts. The post teasers follow-up articles on order book dynamics and toxic flow.

marsbit12/28 04:18

Advancing MM 1: Market Maker Inventory Quoting System

"Attack of the MM 1: Market Maker Inventory Quoting System" by Dave explores why altcoin prices often move against retail traders immediately after their purchases, debunking the myth of intentional manipulation by "market manipulators." The article explains that this phenomenon is not due to malicious intent but is a result of automated market maker (MM) systems using the Avellaneda-Stoikov model for inventory-based pricing and protection against toxic order flow. When retail traders execute large buy orders, MMs sell, leading to a short inventory exposure. To mitigate risk, MMs adjust their strategies in two ways: 1. **Quote Skew**: They lower prices to attract sellers and discourage further buys, aiming to replenish inventory and protect their short position. 2. **Spread Widening**: They widen bid-ask spreads to reduce transaction probability and earn more spread profit to offset potential losses. The core mechanism involves the "Reservation Price," calculated as Mid Price − γ⋅q (where q is inventory and γ is risk aversion). Large retail orders disrupt inventory balance, causing MMs to adjust prices dynamically. Retail traders often face this due to their concentrated, unconcealed, and unhedged orders, especially in low-liquidity altcoins where their trades significantly impact pricing. The article concludes with a practical tip: instead of executing large orders at once, retail traders can break them into smaller, staggered orders to exploit MM pricing adjustments, achieving better average entry prices. A follow-up will discuss toxic order flow and order book dynamics.

深潮12/28 04:12

Advancing MM 1: Market Maker Inventory Quoting System

深潮12/28 04:12

The Advancing MM 3: Statistical Edge and Signal Design

Title: The Attack of MM 3: Statistical Edge and Signal Design Author: Dave This article, the third in the "Attack of MM" series, explores how market makers (MMs) actively gain a "micro alpha" advantage through statistical edges and signal design, rather than just passively adjusting quotes. Micro alpha refers to a conditional probability shift in predicting short-term price movements (within ~100ms to ~10s), such as the direction of the next price change, mid-price drift, or trade asymmetry. It is not about forecasting trends but detecting probabilistic biases that allow MMs to act preemptively—buying before likely price increases, withdrawing bids before declines, or reducing exposure during risky periods. Key signals discussed include: - **Order Book Imbalance (OBI)**: Measures the normalized volume difference between buy and sell orders near current prices. - **Order Flow Imbalance (OFI)**: Tracks aggressive taker orders that drive price changes. - **Queue Dynamics**: Analyzes order queue behavior, including hidden orders (icebergs) and spoofing (fake large orders to manipulate perception). - **Cancel Ratio (CR)**: Indicates liquidity withdrawal rates, signaling market instability. The article emphasizes that speed is MMs' absolute advantage. Lower latency enables faster reaction to market events, facilitating latency arbitrage by executing orders before competitors. In crypto exchanges, some players even get priority execution rights, highlighting the importance of speed and access. Finally, the author notes the complexity of real-world MM strategies and hints at future topics like dynamic hedging and options.

深潮12/28 04:11

The Advancing MM 3: Statistical Edge and Signal Design

深潮12/28 04:11

Attack on MM 2: Market Maker Order Book and Order Flow

"Attack of the MM 2: Market Maker Order Books and Order Flow" by Dave explores the dynamics of market making in crypto, focusing on the Limit Order Book (LOB) and order flow. The LOB is the market maker's battlefield, defined by depth, tick size, and the concept of price improvement—providing better prices than the current best bid/ask to create market value. Market makers profit from the bid-ask spread, which covers order processing costs, inventory risk (holding assets amid price fluctuations), and adverse selection risk (being exploited by informed "toxic" traders). The spread types include quoted, effective, and realized spread, with the latter factoring in future mid-prices to measure true profitability. Order flow involves managing incoming trades, with a focus on identifying "toxic flow" from informed traders who can cause losses. Market makers use metrics like VPIN (Volume-weighted Probability of Informed Trading) to detect one-sided pressure and respond by pulling quotes, widening spreads, or reducing order sizes to mitigate risk. The article hints at deeper institutional strategies in future installments.

深潮12/28 04:03