Setup XDC:USD and XDC:USDT Automatic Market Making bot With Bitfinex Trading account using Hummingbot connector.
HummingBot installation guide makes it easy to set up a full-featured Automatic crypto trading bot for the Pair XDC: USD and XDC:USDT using Bitfinex Trading Account.
Before we start, let’s learn what XDC is ?
XinFin’s XDC is a Trade finance focused coin platform that recently went live with Bitfinex. It is also tracked by Yahoo Finance .XDC liquidity is directly used for Trade Finance transactions on TradeFinex.org
It gives me a strong reason to believe that XDC will be a crypto asset that will surprise everyone with its rise just like Bitcoin(BTC) did.
This setup is organized around automatic market making workflows, and with a well comprehensive guide to help you get started with a Bitfinex Trading account and Hummingbot very easily and quickly.
You need a Bitfinex trading account to set up an Automatic market making bot, if you don’t have an account please create a trading Account from the link: https://BitFinex.com
Setting Up API Keys for Trading Bot on Bitfinex
Bitfinex API keys are important to set up an Access point which is a gateway to get started with your market making bot trading.
To do this, please follow these pictural steps:
- Login to your Bitfinex Account
- At the bottom menu on the website select API Keys in the Utility section or go directly to https://www.bitfinex.com/api . Click the ‘Create New Key’ button.
- Click the ‘Create New Key’ button.
4. Next, Create an API key. And mark all checkboxes as ✓Read for ALL Operations except Withdraw (!), and tick ✓Read/✓Write for Orders operation.
5. Name your API key in the ‘Label Your API Key’ section.
6. And click ‘Generate API key’. From here, You will complete the email verification.
Note this recommendation
(!) save your API Key on your notepad or somewhere safe, because Bitfinex will mask it after a page update/reload.
(!!) Very Important, , do not enable the withdrawal option, when you generate your API keys for any crypto exchange.
You just generated your API key and API key secret with bitfinex exchange with the above steps.
The next guide is on how to set up Hummingbot software.
WHAT YOU SHOULD KNOW ABOUT HUMMINGBOT
Hummingbot is an open source software which is generally used when constructing custom, automated trading strategies that can be both centralized and decentralized exchanges for operation.
It has a wide use of support for different actively trading exchanges. It as its own node that it operate on as a decentralized market making software
The Hummingbot software on the client side (user) can run local machines (like laptops) or in the cloud base, which is very similar to any other kind of node you have operated on. It runs standard market-making algorithms and requires the users/operators to maintain an inventory of tokens and assets.
For full Detail on the setup guide, it is available at : https://hummingbot.io/academy/quickstart/install/
After you have carefully Setup this Software, the Commands you need to Start Pure Market Making bot are listed in steps below.
Steps with commands to Start Pure Market Making bot
- connect exchange_name.
Connect is a command and exchange_name is an exchange which we want to connect.
2. Enter Api Key & Secret Key
Enter Api Key & Secret Key
Enter the API key and Secret Key you generated from the AUTHENTICATION process.
As you type your API key, it will display in this format: ****….
You will receive a message of ‘You are connected to Bitfinex’, after you enter the right API key.
3. To Create a Bot.
T ype in the command: create. It will be use to create a Bot
Next, you will be asked for a market strategy ?
4. enter pure_market_strategy
5. Next, it asks for a maker exchange name.
- Enter Bitfinex
6. Next, you need to add a trading pair.
Enter: XDC-USD or XDC-UST
7. Input the bid order in with number e.g. 1, which will represent 1% to be placed
8. Input the order in (%) to be placed.
Small percentage means more trade but make sure you are in profit after deducting Trading fees.
9. Set Time interval in seconds.
Ideally, you can set up between 0 to 60seconds.
10. Enter the amount of XDC per order.
11. Next, Enter : XDC Numbers (smaller amount means more trade but less profit i tried with 3000)
After entering the amount, It will ask for a ping pong feature.
12. Next, it will ask to save the profile.
Save the file for future reference.
We are Good. Everything is configured now.
To Start the Bot
Enter start to start the bot
We have successfully started the Bot. What Next?
Once you set up Bot, you have to watch the order book on regular intervals. You can try different strategies and optimize profit. Using the simple pure market making strategy, I made a good profit within the past one week. If I count the yearly return, I must say that it’s a very good return compared to other risky trading strategies.
Today, We have covered the Basic arbitrage strategies, and when next,, we will discuss Multiple exchange arbitrage strategy and Multiple trading pair strategies / triangular arbitrage.
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