Perpetual Protocol

<p>To stay ahead in the cryptocurrency markets, traders are increasingly relying on sophisticated algorithmic trading strategies to enter and exit their positions. One popular automated trading strategy is the Time-Weighted Average Price (TWAP) algorithm.</p><p>This article provides a comprehensive guide on setting up a bot for automated TWAP execution on <a href="https://perp.com/?utm_source&#61;perp_medium&amp;utm_medium&#61;blog_post" rel="noopener noreferrer nofollow">Perp</a>, enabling traders to minimize the market impact of large orders and attain better entry prices.</p><h2 id="header-0">Introduction to TWAP</h2><p>As an algorithmic trading strategy that aims to achieve an average execution price of an asset over a specified period, TWAP execution allows traders to submit larger orders without significantly affecting the market price. This is achieved by breaking a large order into smaller chunks and executing them at regular time intervals.</p><p>The TWAP bot outlined in this article can be used by traders to achieve better execution prices. The benefits of automated TWAP execution are explained in more detail in the following section.</p><h2 id="header-1">Benefits of Automating TWAP Execution</h2><p>The advantages to using a TWAP bot for executing trades on Perp are:</p><ul><li><strong>Reducing slippage</strong>: The TWAP execution bot minimizes slippage, reducing the difference between the expected execution price of a trade and the actual execution price.</li><li><strong>Minimizing market impact</strong>: By distributing large orders over time, the TWAP bot reduces the likelihood of causing sudden price movements that could be detrimental to the trader’s position. TWAP execution is especially useful for markets where liquidity is thinner.</li><li><strong>Automating trade execution</strong>: Traders can automate their trading strategy to scale in, and scale out, of positions without manual intervention.</li><li><strong>Optimizing execution prices</strong>: TWAP orders allow traders to get the best possible price for their order. If there’s elevated price volatility and the market is near an important support level, using TWAP execution to go long will evenly distribute the buy orders over time. In turns, this helps the trader get a better average entry price as compared to opening a position manually through the UI.</li><li><strong>Suitable for various market conditions</strong>: The TWAP algorithm can be used in both trending and range-bound markets, making it a versatile trading strategy.</li></ul><h2 id="header-2">Setting up TWAP Execution on Perp</h2><p>A bot that automates TWAP execution can be used by traders to split orders into smaller ones over a specified period. By following the 5 steps below, traders can programmatically scale in and out of positions over time on Perp.</p><ol><li>Clone the GitHub Repository</li><li>Download Yarn</li><li>Edit the Config.json File</li><li>Create the .env File</li><li>Run the TWAP Execution Bot</li></ol><p>Read the full guide on our blog: <a href="https://perpprotocol.mirror.xyz/qN4wjGn5ccDBdO4dBOWsgo02B3TT-QG6-lb0F8UqIlM" rel="noopener noreferrer nofollow">https://perpprotocol.mirror.xyz/qN4wjGn5ccDBdO4dBOWsgo02B3TT-QG6-lb0F8UqIlM</a></p>

Automating TWAP Execution on Perpetual Protocol

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Perpetual Protocol

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