Hummingbot Building Trading Strategies and Exchange Connectors, 1 Jun 2022

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From YouTube: Scripts demo | How to build custom trading scripts with Hummingbot

Description

Learn how to build simple but powerful trading scripts using Hummingbot's new Scripts component introduced in v1.4.0.

Scripts enable Hummingbot users to build customized strategies and access the full power of Hummingbot exchange connectors in a few lines of Python code.

Overview

0:00 Intro
0:54 Starting DCA script
3:30 Modifying the Script
4:50 Buy Dip example explanation
9:30 Running buy_dip script

Relevant Topics:

Pure Market Making with CGAMBIT
https://www.youtube.com/watch?v=3RKMlCWzRhw&t=34s

Managing Bot Cycles with Wojak
https://www.youtube.com/watch?v=eB_66K0JxgM&t=22s

XEMM with jelle
https://www.youtube.com/watch?v=fEoEAbPoBGA&t=13s

**Important Disclaimer: **
1. The content of this video does not constitute investment, financial, legal, or tax advice.

2. No guarantee of profit: CoinAlpha/Hummingbot does not claim that liquidity mining and participation in liquidity mining campaigns and crypto trading will be profitable, however measured, for the user.

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Hi, I'm mike from hummingbot and this video.

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To show the new scripts components that we just released in version 1.4.0.

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So the new script component is designed to allow people to prototype trading strategies much more easily than before.

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All strategies use require you to create cython based files,.

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Configuration templates and a lot of boilerplate,.

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Which a lot of developers just don't want to use when you're prototyping a new something brand new.

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So with scripts, you're writing pure python,.

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You have all the access to the normal.

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Power of connectors,, but you can kind of create.

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The automated bots in just a few lines of python code.

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So we've got a few examples to show you how they work..

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So I'm going to walk you through those examples. Today.

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In hummingbot, you can use it., you run a script with start.

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Dash dash script, and then we have couple examples here. so.

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Before we run through them,, let's show the stuff to the code and see what they actually do.

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Starting with dca example.

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So over here is a code for that script. And,.

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And basically this it's like a hello world type example.

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That shows you how to launch a bot that just buys just issued by orders.

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Every,, every tick for a fixed dollar amount.

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So this is just a demo strategy to show the simplest possible trading bot.

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You can make,, which is just something that automates.

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A series of trades, every year., so the market that the trading pair we've chosen.

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Is the binance to tether market on binance paper? Trade.,.

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So this allows us to just test something without risking real capital.

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And so we're going to do an interval every 10 seconds.

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And an issue a buy order for $100, 100, basically usd.

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In that market. you can see here that.

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This is really all the code right here that exists for the script.

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What it's really doing is it's gonna define these variables.

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And then every tick, which is one second, by default in hummingbot,.

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It will basically issue that limit order for 100 usdt in this trading pair.

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And what we've done here is overridden.

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Some of the sort of the helper methods in hummingbot.

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So there's a bunch of methods like did create, buy order, did create, sell order, did fill order.

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They basically are called when that event. Happens.

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So now we've used a logger.

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To basically create log messages whenever those events have occurred.

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So so that's it.. So let's start the bot and see what it does.

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So here. it's connected to binance paper trading and now you can see it's created the buy order and yeah. and then and then every,. Every interval is going to keep on creating.

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That buy order every 10 seconds.

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And it will just do that until it's gone.

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And so notice that all of these messages are the ones.

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That correspond to these messages here.

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So let's talk about- and I see this is something to edit.

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So, let's change some aspects around this bot. Let's change this to eth-usdt.

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Let's change this to maybe $20.

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And and then I also make sure change here.

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And here ok I'll save the bot I think for now and that exit the bot.

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Exit hummingbot and restart again in order to pick up those changes.

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So now, let's try starting that script again and let's see if the changes were exactly picked up.

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We have to fix our side with my paper trade because I do see I do.

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Seem to have a bounty available,, but it's still canceling my,, my trades anyway.

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This is probably an issue with using the binance paper trade connector.

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With the script., as you can see,, this is still very much a new feature,.

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But I think from that you can see the challenges of how the script works.

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So, let's move on to a slightly more complex example.

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And do more with what's available under the hood in hummingbot.

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So the second example we have here is the buy dip example.

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And as as we can find all of these in the scripts folder in the hummingbot directory.

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So we have a bunch of examples and any scripts.

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That we put in there in a script folder will be accessible.

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After you type start dash dash script.

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So so this by example., so the way we write it is, we would say, start -- script.

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Buy dip example. but again,, let's walk through the code before.

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We understand how that works., so this one is a bit more complex..

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This is going to buy etherium you know,, using the eth-btc market,.

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But only issue that buy order when the price drops 5% below.

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The 50 day, moving average of a previous candle.

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So basically, what we're going to learn here is not just how to issue orders.

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And trades,, but how to listen for data from the exchange order book.

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And to only issue that command when something happens,.

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In addition,, we're also going to learn how to use.

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The rate oracle feature in hummingbot, which converts from one price,.

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One token to another price, using some type of price movement.

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So the way we use it here is we're going to.

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We're going to decide how much you want to buy in dollars.

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And then use the rate oracle to figure out.

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How much of that amount is in bitcoin.

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So we know how to exchange rate..

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So, let's walk through the code a bit before we dive in.

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To the actual script, itself.

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So, similarly to the dca example,, the on_tick function is really where everything happens.

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And so this this is basically called every single tick.

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Of hummingbot and what's going to do, is it's going to create a proposal.

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And then it's going to essentially execute the proposal., so this is very similar to how the pure marketing strategy.

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In other, more complex market making strategy coming out work., this is a good precursor to build up to those more complex, strategies,.

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But basically the proposals are basically the essentially,.

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You know, this essentially will be created in case something happens.

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So essentially, it's going to call this create proposal. Function.

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And this create proposal,, the function will essentially fetch.

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The daily this data and then calculate something., so first,. Let's look at what this daily get daily.

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Close list function, is.

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So this function here is what fetches the actual data from from from money.

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So it's it's calling this url.

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It's passing in these parameters and it's going to receive.

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Is that receive the the results of that response and essentially store it?.

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Into into just some type of that, search.

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So and then, when, when this data structure.

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When it, when it evaluates now,.

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Now see you can calculate the kind of like that the meet.

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The average of daily closes and then, if, if the current price.

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Is kind of below that that that's sort of like the average of the last.

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Because only then does a new order get added to the calls.

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So and and so you can imagine what happens every single second.

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Every single tick is going to go fetch. This data from the api calculates.

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If this is below it and if so, how it will add a new candidate.

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So if there is no order candidate, this proposal, the list is empty.

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But if one is evaluated then one is created and then one.

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And then, finally, it's going to execute this proposal, here.

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The other important function here is this: is this one here.

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if this budget checker is just candidates., so this is going to essentially be kind of like due to some other actions and just make sure that you have enough budget to execute a proposal.

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So it will actually then execute the.

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So so that's really the so that's really the script.

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So let's run it and see what happens. Ok,.

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So so now it looks like it did actually create the buy order.

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And it created this order order here.

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This is a really simple intro into scripts, so you can see how it works.

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Yeah, but overall,, I think that we've created these examples.

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Not as examples that really are super useful,, but more as.

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Starter templates that allows you to build upon them.

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And to build whatever trading bots, you want to build, whether it's for arbitrage to provide liquidity or market make,.

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Or even just move assets from one place to another and to automate that process.

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Without having to spend a lot of time manually,.

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Interacting with apis or with the machine itself.