How to use cryptocurrency volatility to your advantage with algo trading

Sun Apr 02 2023

Let’s talk cryptocurrency volatility, and how you can use this to your advantage.

If you’re here, you’re probably already familiar with the fact that certain cryptocurrencies experience substantial spikes, surging by 1000% or more. These elusive 10x gains pique the interest of many traders. A common approach to capture these spikes is to purchase small amounts of various lesser-known coins, hoping that one or two will reveal themselves as hidden gems. However, this strategy often falls short, and a more precise alternative is necessary.The alternative strategy we propose is relatively simple, but it does require an algorithmic trading approach.

Using Æsir’s volatility module, your algorithm will continuously monitor the prices of all assets on a crypto exchange. If an asset’s value increases by more than a predetermined percentage within a specific timeframe, the algorithm will purchase that asset. You will need to experiment with various parameters to optimize the strategy. Additionally, an exit strategy is crucial so we recommend employing a trailing stop loss to sell at the peak.

This is not financial advice and caution is required when configuring an algorithmic trading strategy. We highly recommend testing your strategy in Paper Trading mode before doing any form of live trading.

Setting up your volatility trading algorithm

Now, let’s dive into the implementation of this crypto volatility trading strategy using Æsir:


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