Testing ATR Market Making and Bollinger Reversals on DEXs

Summary

This article demonstrates two simple strategies on the WOOFi and EdgeX decentralized exchanges. The WOOFi prototype refreshes order book and position data, uses ATR to set order spacing, and places layered orders on both sides of the market. Its order logic accounts for existing long or short positions and attempts to close exposure before adding more. The example is run on a test network to examine order handling and exchange access.

For EdgeX, the article describes a multi-band Bollinger approach: it opens or adds positions as price crosses successively wider bands, scales order size with the band level, and closes positions when price returns through the middle band. The text mentions a long-term backtest and test deployment, but provides no numerical results or robust evaluation of profitability. Both examples are instructional prototypes; live execution, fees, slippage, risk controls, and implementation details could materially change their behavior.

Key ideas

• The WOOFi example uses ATR to adapt the spacing between layered market-making orders.
• The order logic checks current positions and prioritizes closing exposure when applicable.
• The EdgeX example scales position additions as price crosses wider Bollinger Bands.
• The EdgeX strategy exits when price returns across the middle band.
• Test-network demonstrations and a mentioned backtest do not establish live profitability.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.