DYDX is a premier DEX exchange primarily focused on the trading of perpetual contracts such as BTC and ETH.

Zojax has developed a pairs trading bot running on Telegram exclusively for the BTC/ETH trading pair on DYDX that is market neutral. It can make trading profits whether the overall market goes up or down.

The bot is either:

  • Long BTC and short ETH
  • Short BTC and long ETH

This is a market neutral position that will protect the trader from substantial declines in the crypto market.

In addition, the bot monitors in real time the Z-score of the BTC/ETH pair. When the Z-score reaches 2.0, the bot will go short the overvalued asset (BTC) and long the undervalued asset (ETH).

When the Z-score is a negative 2.0, the bot will go long the undervalued asset (ETH) and short the overvalued asset (BTC).

When the net profit of the long and short positions reaches a 1% profit, the bot will close both positions and put the profit into the user’s wallet.

Example

The bot sees that the Z-score has reached 2.0 and opens a short position in BTC and a long position in ETH. Over the next several days, the price ratio between BTC and ETH reverts to its historical average of a Z-score of 0. This will generate a net profit between the long and short positions.

When the net profit reaches 1% of the amount invested, the bot will close both positions.

The bot will continue to monitor the price ratio of BTC and ETH. When the bot sees a Z-score of 2.0 or higher, it will again open new long and short positions.

Technical Note

A Z-score of 2.0 means that the current ratio of BTC to ETH is two standard deviations from the norm and thus is a candidate for a mean aversion from the current ratio to the historic norm (over the last 60 days).

This screenshot shows a market-neutral position of ETH long and BTC short. It is showing a net loss, but as the BTC/ETH price ratio reverts to its historic ratio, the net position will show a profit. When the net profit reaches 1 percent, the bot will close both positions and the profit will appear in the trader’s USDC wallet.

Zojax Bot Screenshot
Easy to Use Telegram Interface

The bot runs on Telegram and we provide a panel of commands.