Hummingbot Community, 14 Nov 2022

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From YouTube: Hummingbot v1.10 Walkthrough

Description

Hummingbot has evolved from a simple market making bot into a powerful, customizable framework for building any algorithmic trading strategy on any crypto exchange.

Michael Feng, co-founder of Hummingbot, takes you on a tour of the latest version of Hummingbot. See how to connect to different CEX and DEX and run market making and arbitrage bots on them!

Listen to to the end to learn how to create your own Scripts with Hummingbot BotCamp! https://hummingbot.org/botcamp

Music courtesy of Antonio Brandao: https://www.youtube.com/channel/UCBEgecoxrEa7-yjqpFlUJ4Q

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00:00 Intro
01:17 Hummingbot user interface
02:16 Adding CEX and DEX connectors
06:18 Running the Pure Market Making strategy
14:04 Running the AMM-Arbitrage strategy
19:26 Creating a custom script
25:36: Botcamp

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Bot Foundation hummingbot is an open source project that helps you build and run crypto trading, Bots that run on both centralized and on decentralized exchanges.

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So you may have heard of us as a tool you can use for Market making, but in the last couple years, especially after we launched the Amazon Foundation, it really became a community based Dao hummingbot has turned into more of a generalized framework um now more with a very modular architecture that really it allows you to add any exchange connector and write any strategy. uh You know Arbitrage Market, making utility strategies really anything you think of, and so I wanted to show you some of that in the latest version uh 1.10.

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So um first I'll take you through the user interface I'll, show you how it is laid out. Next I'll show you how to add a central exchange, connector and a decentralized exchange connector, uh and then we'll run some strategies uh and scripts and really show off what you can do uh with this tool. All right! Well, let's get started.

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First, let me give you a quick tour of the hummingbot user interface so over here. On the left hand, side we have our input Pane and our output pane. So this is where you type commands like help so help will show you all the various commands here. So you can connect to exchange, create a bot, uh see your balance start and stop a bot.

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um You know, and other ones like that um over here on the the left, is your log pane, so anything if you're running a bot. This is where the messages displays are um think of this kind of like the console log in your browser.

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So um so one thing's telling me that, is it can't when it's testing the exchange connectors, uh it had a problem connected to FTX um and that's because today is let's say: uh November 13th, 2022 uh and so the only a few days after FTX blew up so um so over. Here, let's do the connect command, uh and then uh this will tell me um basically with all the various exchanges available to connect to R, and these are all the central exchange connectors.

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That uh hummingbot has some are Perpetual uh and some response, so the ones that have underscore Perpetual are the um Perpetual kind of the Perpetual Futures markets, the test set ones or the test sets of course. So you can see that we really connect a lot of different, essential exchanges. Now um and uh and every every you know, release people can add more as well, so um so and then and then finally, uh let's say we can also do the balance command. The balance command.

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Excuse me, yep there you go, uh the balance command will show you your balances across the different exchanges that you have connected to so I currently have a couple of central exchange connected uh Central exchange, connectors, I'm, sorry and a couple of decentralized exchange countries over here. So um finally, I can also check this. The Gateway, so Gateway is the um the Dex connector module. uh So let's check the status of Gateway and um Yep looks like it can uh yeah connect. Currently it can find it's connected using anchor.

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So it's using these two different node Services, uh sorry, these two different nodes and it's connecting to both the ethereum Mainer chain and the uh polygon chain as well.

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um So um so, let's go ahead and add a a couple of exchange connectors to see how that works. So, let's first add a centralized exchange, connector um so I already uh so I already have coin, and so let's say I wanted to re-add the Google connector.

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um So I could say uh you know, I could replace it um and then, if I did that, then I would just add the uh the API key, uh the secret and the passphrase again. So basically, these are defined in the API settings for Easy Exchange I'm not going to do it now, because I don't want to risk exposing my uh my private Keys uh but uh or API keys. But if you did want to do that, it's pretty easy to do so so I'll just say: no.

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um uh Let's then, if you want to add a decentral exchange connector, you would do something similar or you can say, digway Gateway connect and then this will show you the list of the uh The decentralized Exchange connectors available in hummingbot. So uh currently we have a few of these different exchanges. So, let's actually add this one um and I'm going to add: let's see, um you know a theory, the the Gateway connector um on ethereum. So this is basically the wish chains um annoying L1 chains.

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You want to add so um right now we have unit swap deployed on these two, but as the new swap gets added to other chains, uh you know it's pretty easy to add those as well, because we already have the class available so once I've selected.

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um The chain I also need to pick which network on the Chain I need to connect with so I already have mainnet here. So let's go ahead and add: um uh let's see up how about arbitrum. So um so, yes, so I'll use anchor. So we use anchor as the default node provider because it doesn't require API Keys. However, if you wanted to add in fira it's very easy to do so by using a configuration configuring gateway to use your inferior node instead.

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So um so, let's go ahead and use anchor and then uh this way I'm going to use one of my existing wallets to connect to this network so that I don't need to re-enter the private key. So um see where it says, I say: I'll use, I, say: I'll use this one. This is the one I've already added uh and then now um now I can connect this this. uh This note, this client can also connect arbitrum as well.

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So if I do balance, it should show me uh basically my balance across the two Central exchanges and now kind of like you know the three, the three chains and basically use up on each one all right now, let's get to the fun part and actually run a live. Training bot first use the create command in order to create a new strategy. So it's going to walk you through answering some very basic questions uh and, um and then and then afterwards, uh you'll you'll save the configuration you'll, basically save a config file.

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You can load and then run later on. The first question is: what's your Market?

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Making strategy is so these are all defined uh in our open source code base or contributed by the community, and the one we're going to use is pure Market making this happens to be our kind of the flagship strategy that everyone starts with, um and it's basically just put you know, orders an order book and maintain them as the market price moves around there's a bunch of parameters here, but uh you can see how all of them and what they are in the hummingbot documentation.

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So first, let's pick the exchange. uh Let's go with kucoin since um you know, I have that exchange connected, but, as you can see, there's many possible ones. There's also paper trade versions of some of the exchanges available. So um if you want to start with that, I will use the real one, because I want to show you what it looks like on Exchange as well.

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So the next one is the trading pair. So let's define the training pair to be if useg and now we're going to set the the spreads for orders. So um uh eth is a pretty tight market, so I'm actually going to set some pretty tight spreads here because uh we might get lucky and actually get some fills and I want to show you. You know how that actually looks like you know, from the helping bot interface, so let's actually set um yeah 0.1 um and then I'll set.

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Similarly I'll set uh spreads tight there as well, uh and then I'll try to cancel my orders every 15 seconds to show some activity um because I don't want to lose too much money for Market making Market making. It is definitely an art.

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uh It's not easy, so I'll just use a very small amount of Youth and finally there's a basic risk management feature called ping pong where it alternates, buy and sell orders and I'll turn that off for now uh and I can save that configuration and use the import command later on to bring it back before I start. Let me show you the config command, which you can use to edit both a global configurations as well as the um the strategy specific ones.

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So here I'm going to change one parameter called field order, delay, which basically means after filled order. um The bot will wait. You know 60 seconds before placing a new one uh which is kind of a just to make sure you're, not kind of you know constantly. You know filling orders when the market is, you know, going One Direction, uh you know like too fast, so I'm actually going to turn that off for the purpose of this demo, so I'll just do config folder and play I'll change that to something lower like five seconds.

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So now that we've um kind of now we can actually start the bot. So let's use a start command for them.

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So now hummingbot is making some basic checks and connecting to the coupon order book and now it's created a buy order and a sell order and you can use a status function command to see what it looks like on on Exchange. So now it says: we've connected to kucoin.

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um These are assets on kucoin um and these are the two orders that we have created but, as you can see, uh because we're refreshing these orders every 15 seconds, uh the bot has already created new ones over here.

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We can also see what this looks like on the kucoin side. So let's go over there and, as you can see, these are the two orders that we currently have on the books.

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um There's some perform, but here you can also see the spread as see is here. So this information here uh that we have that exchange doesn't have. But uh it's all it's always useful to look at the exchange. Keep this window open. So you can see what the bot is doing on the exchange, as well as in the hummingbot interface.

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So, um let's, let's try to actually adjust our spreads and try to get some fills. um You know in this market, so I can do that by using the Sprites command. This is actually a custom command uh that someone added. It's actually pretty easy to add your own commands here as well, uh but I'm going to set this to even higher, so I'll use, um spread. 0.05 oops see. Let's see how do we actually use this, so it's always good to look at the help.

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Okay, uh ah first upside I do the bid and the aspect that makes sense. So let's do like this.

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Okay, I would also have like how do I type, that correctly, okay, so now um bin and ask will be set at 0.05 instead, and so, let's see um indeed uh the surprise were set actually tighter than they were before. So, let's give it um it's a while and see if we actually get some uh orders filled.

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There's one uh here's a cell order that was filled um so uh see so when you get fill you're gonna, see a message pop up here. Oh here's, another one that was filled uh and looks like we actually did make a small amount of money on this one, because the second buy order occurred at a lower price than the sell order. So you always want to buy low and sell High.

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Once you have some fills, you can use the history command in order to see you know the performance so far, the history commands tells you the number of Trades you've done the volume, uh your change and your asset balances and um your performance. You know kind of comparing where you started to where you are right now now um I'll I'll be losing money in this market because I I'm, not my fee level.

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My VIP fee level is not as not as low or not as high I guess then, the the big market makers on kucoin and eth is also a very you know. Liquid Market, uh so um ideally I showed me competing in this market. If I have a really high, VIP tier or if I don't I should be, you know looking at a smaller uh pair on this Exchange. So that's why I'm gonna stop this spot before I lose too much money uh and I'll just use a stock stop command to do that.

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So now we can look at the final history for that. You know. I ran this bot for uh just about seven minutes um sold a lot of Youth uh bought one, uh let's see, um and then you know luckily, because I was using a very small amount of 0.01.

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um You know it didn't really change my my portfolio much, uh but you know if you wanted to make a lot of changes. There's many things you can change like using a different source for the for your price, like they're, using the last trade price, uh even using the the price from a different exchange or use the inventory, SKU hang orders or other ways to control for risk.

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All right uh now that you've seen how the the basic Market making strategy Works, let's check out a strategy that uses a decentralized exchange, connector, so I'm gonna use the create command again and use ammarb, which is a strategy that will try to find Arbitrage between a sex and index, so I'll use uni, swap polygon for the first one and then the uscc pair there and then I'll use um kucoin for the second Exchange and the tether pay there uh a small amount for testing purposes and for profitability.

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This will take into account both gas fees as well as exchange fees. So you only make a trade if the net profit is one percent or more um I will add a couple slippage buffers to make sure that um the trades go through and finally, I can select whether to place the trace, concurrently or sequentially. So I'll do sequentially, because block transactions have a higher chance of failure.

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So for the Gateway strategies, it has a final check to make sure you have the right chain, Network, Etc um and then just hit yes continue, and now the bot will start uh connecting to kucoin and polygon and look for Arbitrage opportunities.

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So currently uh looks like there is no Arbitrage property, which is the, which is a very normal case, um and uh it's going to continue to pull for chances to to buy low and sell High every every few seconds.

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So um you know, and and if you want, uh you can also set your configuration uh to a lower uh minimum profitability. uh If you want to try to get a fill, uh you know more easily. You can also set this even to a negative number. Even so now. um Let's actually try that um and we'll stop about and we'll configure the min profitability and I'm going to actually make that a much lower.

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Let's say: oh 0 negative, zero point, um one percent, uh and so we can see if we can get a trade to go through foreign.

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A little bit uh so now the even the negative was zero point: zero one isn't being hit, but let's see um how it goes and see. If uh a trade actually happens, you can also use a status command just like other strategies to see how it's going so note that, right now, it's actually using the rate Oracle to give calculation to figure out the rate between uscc uscc.

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um You can actually configure this with a rate, Oracle source and and and so right now, if you look at the configs I'm, actually using kucoin for the rate Oracle, uh you know so so that it can find the right so right now still no Arbitrage.

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um So, let's, uh let's set that lower and see if we can get a get a real trade going. So, let's uh sentiment, profitability even lower to negative 0.2 and I'll. Take a take a hit for the purposes of this demo.

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All right, so, let's see, let's see if a trade happens now.

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Opportunity- and so um it's gonna uh basically place this trade. uh It says now see it's bought and sold um on polygon and cocoin.

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So after it completes one Arbitrage cycle, uh there's a slow delay and then it's gonna kick off a new cycle and try to find another Arbitrage opportunity. Kit so see um looks like it. uh Yeah I think that one see there's a there's two trays now. So now it's on two trays and now I'm gonna stop this before I lose too much money.

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So, as you can see here, um you know went to find a transaction. That's lower! That's higher than the mid profitability is automatic, an execute. So you make sure you want to set that correctly, and so we've done two trades on the polygon side and two trades now on the kucoid side,.

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Finally, uh let's go through one of the most exciting developments coming by lately, which is the new scripts and feature uh you see. Since we started, we found that the folks who've had the most successful coming. Bot have really been the ones that customized the strategies instead of running the fixed ones, that the the open source code with ships with so a few months ago, we started to create a new thing called scripts, which are basically very light.

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Versions of strategy uh contain a single python file, and so it's really easy for you to digest understand what it does and hopefully extend it.

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um We've created a number of examples already that are in the open source code base, and so, if you hit start dash dash script, you'll see all the examples in this in the scripts folder and um and so as soon as you hit enter. It will run one of these scripts, so I prepared one already, which is the simple cross exchange marketing example, and this is a simplified version of one of the most popular strategies we have, which is one that places liquidity on one exchange and hedges when any field orders on another Exchange.

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So before we actually dive into the strategy itself. Let's take a look at what that script actually looks like in the code, so over here uh see I have the actual script itself in Visual Studio code.

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uh This was actually created as a part of our botcamp course, which teaches people how to create these types of scripts using hummingbot, so I Define a couple variables here: the maker exchange, where I'm going to set my trades Summit orders and the taker exchange where, if anything, uh is filled, I'm gonna hedge over there, so um here I'm, basically setting the parameters in the code, so the order amount, the spread and basis points uh which is the spread here is basically uh the um this strategy will actually look at the price on binance, the taker exchange and add a spread.

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uh This spread before placing those orders on the maker Exchange and finally, um you know the Maxwell duration or fresh orders, every 10 seconds and um if the spread, if the spread between the the maker exchange of the taker exchange, dipped below five basis points, the bot will automatically refresh those orders um and all the logic of this strategy is really contained in this on tick file and and we've really set this up so that so anyone with a very basic understanding of python can digest it, because it's using a lot of the helper methods that are defined in this base class and now in the rest of the code honestly, is really just handling the different events um and and also defining a custom view in the status.

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Because I don't want to just do the stock view as a Trader I want to track.

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My own metrics know how well uh the strategy is doing so now that, um and so this will add, essentially a custom exchanges table and a custom active orders table to the status command and that's really it, um and so um it's a it's a 200 lines of code which isn't small but I, think um you know it's some something that anyone can really uh with a basic development background, can look at and understand in less than an hour, and what we found is, if you have the confidence to run a strategy yourself, uh you can tweak it, you can extend it and you're likely to be more successful, making money from it.

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So now, let's go and take a look at how the script actually runs so to run the script, uh just type start: Dash script and the name of the script file which is located in the scripts directory in the coming block root directory.

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So uh once it starts it's going to read from that file and it's sort of connected both the kucoin and the binance order, books and I'll Place. uh That order- and so you can type the status command to see uh what it's doing and observe that the uh this exchanges table is uh is different from the standard one, and so is the active orders table and the reason I did.

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This is because um this tells you some more information, so I Define, something called buy, spread and cell spread, which I defined as like the spread between buying the kucoin, uh these two venues and then you can also see basically the orders you've placed uh the spread of each order to the bid price and how how many basis points it would have to move before you canceled and replace the order, and we call that the max order.

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Age here was 10 seconds, which is why it's a keep on canceling these orders and refreshing them all the time. So uh in some ways this is a simplified version of our cross-exchange marketing strategy. But we found that because the the normal one has gotten really complex. There's lots of parameters, it's pretty intimidating for new folks, and so we kind of recommend that people start with this.

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One really good intuition for how Market making works and hedging across different exchanges- and you may want to extend this one instead of just using um the one over there. uh One of the great things about Scripps is that they're really easy to change on the Fly and so because they're pure python, you can just go into the file here and make any changes you want um as long as Bots stopped and then once you start it again, it'll reflect those changes. So let's widen the Sprite to 50.

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Let's assume that uh you know you're being conservative, maybe the Marcus a little choppier and you want to make sure that your your Bot is is gonna widen their spreads. So is you just change it to 50 over here and uh just run the same command again and now it will place spreads at 50 basis points instead of the tighter ones they did before.

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So you can see that now spread the mid price is 50., um so I hope that gives you a brief intro into how home that works, both from adding connectors um running strategies and scripts, as I mentioned, before, we're starting to really work with our community to teach them to get the most out of hummingbot and that's. Why we're starting a developer boot camp called bot camp and because Helen bot is pretty complex, we want to make sure we can deliver. The highest quality course possible, we're limiting um each cohort at 20 participants.

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For now it runs for four weeks, and we do a lot of Hands-On guidance to make sure that every student can actually create their own custom strategy during the course um and if they are successful in doing so, they get a chance to win some HBO rewards, as well as the getting a Nifty nft certificate.

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So overall I hope you like that this demo of hummingbot um I wanted to really show off all the stuff we've added in the last few releases um and- uh and you can see what's doing now- we can see the uh all the all the orders is placed here in kucoin here. You know in the in here as well, um but uh yeah I really want to show off this.

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This new version behind Bob, because I think that we've really added a lot of stuff in the last few months um and really kind of starting to become a true community-based project where people can contribute different, connectors different strategies. They really help improve the usability and quality of the overall code base. Thanks a lot.