A crypto futures trading strategy involves entering into a contract agreement between two parties to buy and sell a particular amount of an underlying cryptocurrency like BTC at a predetermined future price on a predetermined date and time.
Arbitrage, market-making, liquidity detection and momentum trading are four sorts of HFT strategies. As previously stated, arbitrageurs look for price differences between two identical assets and benefit from the price discrepancies on different exchanges. HFTs could utilize latency arbitrage to exploit these misalignments, which are frequently induced by low latency.bid-ask price discrepancy
However, please note that algorithms can react to market conditions in real time. As a result, algorithms may significantly expand their bid-ask spreads during volatile markets or temporarily halt trading, reducing liquidity and increasing volatility.In the DCA strategy, a set amount of money is invested at regular intervals but in small increments, allowing traders to profit from market increases without putting their holdings under market risk.