Automated Cryptocurrency Trading

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'Currency chunk' - what is it, ideal and worst case scenarios

1. What is a 'currency chunk'?

A 'currency chunk' is a pre-selected amount of a fiat currency. Each trade (buy/sell) on our automated cryptocurrency trading system is done in the amount of one 'currency chunk'.

We have set the minimum size of 1 'currency chunk' (CUR_CHNK) to be $20 USD or the equivalent value in other fiat currencies. There is no limit on the maximum size of 1 CUR_CHNK. However the user of our automated cryptocurrency trading system has to keep in mind that each individual trade is done on a specific cryptocurrency exchange.

While one exchange may handle quicly a trade with CUR_CHNK = $1000 another exchange may take a long time to complete the same size of a trade and have only a fraction of the order completed - 'partially filled order. This is because the first exchange in the above example has larger volume and liquidity compared with the second.

2. The ideal and worst case scenarios for trading

The two charts below represent the ideal case (left side) and the worst case (right side) scenarios for our automated cryptocurrency trading system.



For example a user has $25 USD in their account on a specific cryptocurrency exchange, and the CUR_CHNK = $20 USD.

The left side charts represents the ideal case because the automated cryptocurrency trading system can complete 3 trades while using a single CUR_CHNK - first trade1, then trade2, and then trade3. The 3 trades happen sequentially - one starts and completes and then the next starts and completes...

The right side charts represents the worst case because the timing of the 3 trades overlap.

If a user has for ex. $25 USD in their account on a specific cryptocurrency exchange, where the CUR_CHNK = $20 USD, then the automated cryptocurrency trading system can complete only 1 trade while using a single CUR_CHNK, normally the first one - trade3.

Only if a user has for ex. $65 USD in their account on a specific cryptocurrency exchange, where the CUR_CHNK = $20 USD, then the automated cryptocurrency trading system can complete the 3 trades while using 3 CUR_CHNK-s - trading simultaneously trade6, trade7, and trade8.

3. Minimum and maximum fiat amount on the account

When a user of the automated cryptocurrency trading system sets their account on a specific cryptocurrency exchange, the recommended minimum amount of fiat currency in the account has to be a little more than the amount set for CUR_CHNK . For ex. if the CUR_CHNK = $50 USD, then the minimum recommended amount of fiat currency can be $51 USD.

The automated cryptocurrency trading system trades with a defined number of symbols on a specific cryptocurrency exchange. (refer to - Quotes )

Potentially the maximum amount of fiat currency in the account can be the number of symbols multiplied by the amount set for CUR_CHNK . However an exchange may have 100 or more symbols for trading so it is practical to place an amount of fiat currency in the account for 5/10/20 CUR_CHNK-s, which will allow this number of simultaneous/parallel trades.