This little trick to prevent alpha clamping, ever since I told my good friend about it, he has been suggesting that I should write an article to share it. I said this little trick should be known by everyone, and I've shared about alpha before, so it's not worth spending words to waste everyone's attention. But my friend insists that, "What you think everyone knows is actually something many people do not know." Yesterday, he took action on X and mentioned this knowledge point to a KOL with tens of thousands of followers, and surprisingly, they really didn’t know. It seems that indeed there are quite a few people who are unaware of this trick that can significantly reduce alpha clamping. Alright, I will briefly mention it today.
First, let's talk about the practical part:
For example, the current trading aio, the current price is stable at 0.12204111, so we can set the buying price to 0.1221, and set the reverse order selling price to 0.12, and directly click to buy, completing an alpha transaction.
Next, let's talk about the logic: Many friends, especially, have difficulty understanding this selling price and may think of setting 0.12 to sell, isn't that a big loss? Actually, it won't be. The trading matching is based on price priority, time priority, and quantity priority. This is similar to traditional stock trading matching rules. Based on the above priority rules, the system will match trades at the current best price, which is of course not the price you set, but rather—the lowest price you are willing to sell is equal to the higher price you listed, and you would certainly want to transact. A limit order means the worst price you are willing to transact.
So the price you set is just to increase priority weight. Therefore, when the price is stable, you won't sell at the set 0.12, but will prioritize transacting at the higher price that the current buy orders can provide.
There is another underlying logic to this technique. To brush alpha and avoid being squeezed, we can achieve 'strict buying, loose selling' to significantly reduce the probability of being squeezed. 'Strict buying' means that the buying price can be a bit harsh, for example, the buying price can be set to 5 significant digits, 0.12205. The benefit of this is that it’s better not to buy than to buy at a high price that increases the risk of being squeezed; 'loose selling' means that the selling price is more relaxed, ensuring that even if the coin price fluctuates downwards, it can be sold immediately, rather than being delayed for more than 2 seconds which could lead to being squeezed. I think two significant digits are about right, for example, the aforementioned 0.12, entering it doesn't take too much time. Based on a lot of practical experience, I have only been squeezed for a bit more than 1u at most, and the efficiency is very high. When stable, brushing 8 transactions only takes a few dozen seconds.
Alright, that's all for today's sharing. If anything is unclear, feel free to private message or leave a comment.#ALPHA🔥
