LATOKEN successfully completed development of a connector to Hummingbot crypto trading software. Since this time LATOKEN is among 10% of crypto exchanges allowing users to trade with Hummingbot high-frequency trading strategies such as market making and arbitrage. With LATOKEN connected to Hummingbot API both individual traders and financial institutions may leverage Hummingbot trading bots to enhance their trading experience.
Hummingbot is a software product that helps traders to build and run automated trading strategies and bots. Hummingbot provides 14 pre-built strategy templates with a set of configurable parameters that enable traders to run different types of trading strategies:
- Market making strategies that provide liquidity to a market
- Arbitrage strategies that exploit differences between markets
- Utility strategies that automate routine trading operations
Hummingbot cryptocurrency market making bots and arbitrage bots could be an efficient way to conduct algorithmic intraday trading on LATOKEN cryptocurrency exchange.
What Is a Market Maker?
The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.
What Is Arbitrage?
Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset’s listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets or in different forms.
Risks of Market Making and Arbitrage
Opportunity to grow profits through crypto market making and arbitrage strategies comes together with risks. Market making risks can be caused by low trading activity, and volatile and trending markets, while arbitrage risks relate to trades execution risks caused by possible security issues and system bugs at exchanges.
Hummingbot Risks
There are many moving parts, when operating a bot, that all have to work together to properly function:
- Hummingbot code
- Exchange API connectivity and rate limits
- Internet connectivity
- Availability of machine disk space and memory
- Blockchain and node connectivity (for trading on DEXs)
Key Takeaways
LATOKEN Exchange with integrated Hummingbot market making strategies provides traders with a unique opportunity to become cryptocurrency market makers and use automated market making to potentially earn through provision of liquidity and depth on the crypto exchange.
The cryptocurrency market is growing rapidly and today about 305 crypto exchanges are listed on CoinMarketCap.com with almost 10,000 cryptocurrencies available to trade. In conjunction with Hummingbot arbitrage strategies, it provides a huge opportunity for traders to take advantage of the inevitable inefficiencies in markets and earn extra money on arbitrage.
Download Hummingbot ConnectorDisclaimer: Hummingbot connector to LATOKEN exchange is currently being reviewed by the Hummigbot Community. You can download and use this connector at your own risk. LATOKEN exchange does not bear neither direct nor implied responsibility for any losses.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.
