Advanced Crypto Tutorial: HEX/USD, Uniswap Liquidity and Trading View

This is for educational purposes, it’s not for beginners and is not financial advice. Use at your own risk. Also note that this is a simplified example and does not take into account all possible risks and market conditions. You should perform your own research and analysis before implementing any trading strategy, and always use caution and proper risk management techniques.

Providing liquidity in Uniswap with the goal of accumulating more HEX over time as the HEX price moves down is a form of automated market making (AMM) strategy. To implement such a strategy, you can consider the following:

  1. Set a target ratio for your HEX-USDC pool: To provide liquidity in Uniswap, you need to deposit an equal value of HEX and USDC into the pool. You can set a target ratio for your pool, such as 50% HEX and 50% USDC. You can adjust this ratio based on your risk tolerance and trading strategy.
  2. Monitor the HEX price: As the HEX price moves down, the value of your HEX holdings in the pool will decrease relative to your USDC holdings. To accumulate more HEX, you can use a strategy to buy more HEX when the price is low. You can set a threshold for the HEX price, and when it falls below that threshold, you can use some of your USDC holdings to buy more HEX and rebalance your pool to maintain your target ratio.
  3. Use a dynamic price range: You can set a dynamic price range for your HEX holdings in the pool, based on the target ratio and the current HEX price. For example, if the HEX price falls below a certain level, you can set a lower limit for the price range to prevent your pool from being drained of HEX. Similarly, if the HEX price rises above a certain level, you can set an upper limit for the price range to prevent your pool from being drained of USDC.
  4. Monitor the pool fees: Uniswap charges a fee of 0.3% on each trade, which is distributed among liquidity providers in the pool. You can monitor the pool fees and withdraw them periodically to increase your returns.

Here’s an example of how you can implement these strategies in Pine Script:

//@version=5 strategy("HEX-USDC AMM Strategy", overlay=true) // Set target ratio for HEX-USDC pool hex_ratio = input.float(0.5, title="Target HEX Ratio") usdc_ratio = 1 - hex_ratio // Set dynamic price range hex_price = ticker("HEXUSDC") lower_limit = input.float(hex_price * 0.9, title="Lower Price Limit") upper_limit = input.float(hex_price * 1.1, title="Upper Price Limit") // Monitor HEX price and rebalance pool if hex_price < lower_limit and strategy.position_size < 0: hex_amount = strategy.equity * hex_ratio / hex_price usdc_amount = strategy.equity * usdc_ratio strategy.entry("buy_hex", strategy.long, hex_amount, hex_price, comment="Buy HEX") strategy.entry("sell_usdc", strategy.short, usdc_amount, hex_price, comment="Sell USDC") if hex_price > upper_limit and strategy.position_size > 0: hex_amount = strategy.position_size * (hex_ratio - 0.01) usdc_amount = strategy.position_size * (usdc_ratio - 0.01) * hex_price strategy.entry("buy_usdc", strategy.long, usdc_amount, hex_price, comment="Buy USDC") strategy.entry("sell_hex", strategy.short, hex_amount, hex_price, comment="Sell HEX") // Monitor pool fees and withdraw periodically if strategy.position_size != 0 and bar_index % 100 == 0: strategy.close_all() strategy.entry("withdraw", strategy.short, 0, 0, comment="Withdraw Fees")

This script uses the Uniswap HEX-USDC price feed to monitor the HEX price and sets a dynamic price range based on the current price. If the HEX price falls below the lower limit, the script buys more HEX and sells USDC to rebalance the pool. If the HEX price rises above the upper limit, the script buys more USDC and sells HEX. The script also withdraws pool fees periodically to increase returns.

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