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Liquidation Based Entry
Liquidation Based Entry

How to use a Liquidation and VWAP to open trades on Wick Hunter. This is build in signal type that is exclusively to Wick Hunter.

Updated over a week ago

In the dynamic world of cryptocurrency trading, the ability to automate your trading strategies is a game-changer. Wick Hunter offers traders a range of entry types, each catering to different trading styles and preferences. In this article, we will delve into Liquidation-Based Entry.


Overview of Liquidation Entry

The first and perhaps the most crucial concept to grasp is Wick Hunter’s interpretation of VWAP. You can access a TradingView indicator via the link below, which will aid you in visualizing the VWAP band created by Wick Hunter. It’s essential to note that Wick Hunter will only initiate a counter trade when both your VWAP condition and minimum liquidation size criteria are met.

https://www.tradingview.com/script/5oH8WZBO-Multi-VWAP-for-Wick-Hunter/

Wick Hunter is creating a “band” around current VWAP. Since we are countertrading, if price is dropping we will enter a long and if price is pumping we will enter a short trade. The goal is to take short counter trades with low take profits (0.3–0.5%).

VWAP serves as a reference point. Wick Hunter monitors the distance between the current price and the VWAP on the selected timeframe and period. This distance is expressed as a percentage (% distance from VWAP). Notably, this percentage is configurable independently for both the Long and Short trading directions.

The second confirmation signal for entering a trade is a liquidation event that occurs on the exchange. Wick Hunter has the capability to stream liquidation events for Binance, Bybit, and OKX. The concept involves both your VWAP (which was covered earlier) and a liquidation event that exceeds your liquidation setting. When these two elements are configured correctly, they tend to result in a probable small price retracement.

Creating a Liquidation Bot:

When configuring a Liquidation-based entry in Wick Hunter, ensure that "Liquidation" is selected as the entry type. This mode allows Wick Hunter to monitor liquidation events and market conditions. Here are the critical settings for this entry type:

  1. Entry Type: Choose between "Dollar" and "Percentage," keeping in mind that "Percentage" is based on your total account balance.

  2. Entry Size: Specify the entry size, which refers to the position size.

  3. Order Type: Select your preferred order type, whether it's "Limit," "Post Only," or "Market."

  4. Leverage Type: Decide on "Cross" or "Isolated" margin usage.

  5. Leverage: Input the leverage level you want to apply to your trades.

Liquidation Options:

In addition to the standard settings, Wick Hunter's Liquidation-based entry offers options to fine-tune your trading strategy:

  1. Sources: Choose the sources of liquidation events you want to consider for trade entry. You can select multiple sources to optimize your strategy.

  2. Minimum and Maximum Volume: Define the 24-hour rolling volume in millions (USD) that a symbol must have before Wick Hunter considers entering a trade.

  3. Minimum Liquidation Size: Set the minimum liquidation value in dollars (USD) that must occur before considering opening a position.

  4. Long and Short VWAP: Specify the percentage by which price must deviate from the current VWAP when a liquidation event occurs, depending on whether you want to enter a long or short trade.

  5. VWAP Timeframe and Period: Configure the timeframe and period over which you want the VWAP to be calculated. This allows you to tailor your strategy to specific market conditions.

Refer to the other sections covering Dollar Cost Averaging, Take Profit, and Stop Loss for details on these.

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