9. Market Maker Strategy
You have mastered the basic game skills and can bet on a rise or fall. But there is one strategy that is more suitable for beginners, which will allow you to make a large number of transactions without significant risk.
The essence of the strategy:
- Go to the exchange and buy 1 GOLD at any price, using the market order. For example, let it be 1,000 CASH for 1 GOLD.
- Right after the purchase, place a limit order for the sale of 1 GOLD at a price of 1,100 CASH and wait until your order is completed.
- Once the gold purchased for 1,000 CASH will be sold for 1,100 CASH, you will have 100 CASH in profits. Next, set a limit order to purchase the sold GOLD for 1,000 CASH and so on.
You can choose which volume you can use for deals and also you can reduce the price range to have your orders completed faster.
Adhering to this strategy you will increase the liquidity of the market. Liquidity is the ability to sell a significant amount of exchange commodities without greatly affecting the price. Supporting liquidity, you will be one of the market-makers, that is, the creators of the market.
This strategy allows you to earn when the market "stands still", that is, moves in a narrow range without a trend. On many markets the price spends considerable amount of time in the balanced state. Usually after a sharp movement, the price finds its new level and again finds its balance.
When working with this strategy, your task as a trader is to correctly determine the critical level of the price at which it goes beyond the range and close your transactions at this level.