Mastering the Market: The 3 Most Popular High-Frequency Trading Strategies You Need to Know

Market-making

The most popular high-frequency trading strategy. The advantage of this strategy is that you can easily observe the changes in the market and pending orders. You can make money by playing both sides of the order book. The price difference is the key to success. By using this strategy, you can achieve the 0.75 standard deviations from the price mean. If the prices fluctuate abnormally, you can reduce your losses.

Technically, the strategy demands quick responses from your side. If your hardware is not fast enough, do not use this strategy because if you do not sell early on, you will face huge losses.

Statistical arbitrage

This trading strategy is based on price spreads. By using crypto aggregators, search for those coins that have long-term equilibrium relationships. When the price change of one coin, trade another coin with good leverage.

The strategy is completely based on a statistical analysis of a large amount of historical crypto coin data. You can use different time windows to verify the returns you will earn. If your profit is not good enough, then you should add the stop loss and save your fund against the big loss.

Short-term moving average

In this strategy, the traders use the short-term moving average for quick gains. When the price breaks through for a short moving average, pull back with the light speed. In this, it is important to learn about the ratio of volatility of coin and exchange fees is important. Before executing this strategy, first calculate the associated fees.