Practical Crypto Market Making with Inventory and Risk Controls
Summary
This interview describes one trader’s experience using automated crypto market making, including both single-exchange market making and cross-exchange market making. The trader reports preferring pure market making for stablecoins and finding it easier for beginners to manage on one exchange with two currencies. For order placement, he experimented with a small number of simultaneous orders and accepted occasional inventory depletion as a balance against holding a larger inventory.
His process included monitoring hourly market direction, stopping the bot during sharp declines, and converting gains to stablecoins near market peaks. He also used a kill switch and kept capital modest while learning. The account is anecdotal: it offers no audited performance data, controlled comparison, or evidence that the reported per-trade returns generalize. The interview stresses cautious experimentation and discipline, but does not specify order pricing, fee assumptions, latency, inventory limits, or other details needed to reproduce the approach.
Key ideas
- The trader used both pure and cross-exchange market making in crypto markets.
- He found single-exchange market making simpler to learn than cross-exchange setups.
- He experimented with a small number of concurrent orders and tolerated occasional inventory depletion.
- A kill switch, modest capital, and stopping during sharp declines were part of his risk controls.
- The interview provides personal experience rather than independently verified strategy results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.