Cryptocurrencies are a new and growing asset class that is quickly gaining in popularity. But everyone is trading the same instruments on the same exchanges. What if you could create and trade your own instruments? The Kingfisher Platform allows you to do just that! It’s simple to do and easy to explain. In this article, I’ll show you how to easily create and trade composite indexes on the Kingfisher in a few clicks.
What is a composite index?
A composite index is an index that is made up of multiple individual indices that are weighted by certain criteria in order to measure the overall performance of a group of assets or cryptocurrencies. These weights determine how much of the value attributed to each asset contributes to the overall value of the composite index.
Why trade a composite index?
By combining Longs and Shorts of different cryptocurrencies, we can create complex instruments and strategies which are impossible to replicate using only longs or shorts of a single cryptocurrency. This gives us access to more complex and volatile markets, that can match your volatility and behavior expectations. For example, it is entirely possible to create a statistically mean-reverting index.
How to create and trade composite indexes on thekingfisher.io?
Creating an index:
1- Open the KF Index manager
2- Create a new index, first select an exchange (Bybit, FTX or Binance), or “All” to see the instruments available on all the exchanges.
3- Select the crypto assets you want to include in the index from the drop-down menus
4- Assign to the selected assets the weighting you want to use for each asset (negative numbers will indicate a short).
5- Click save, then click the newly created index
Executing an index trade
6- Connect your existing API keys, or add an “API Instance”
7- You can now enter a size to execute, and Short or Long it! the size will be divided between the different selected instruments, depending on the given weights.
8- You can easily track your open positions under the chart (red box), and close them by ticking the box on the right then confirming by clicking the “green tick” at the top (green box)
9- you can force a refresh of the positions by hitting the refresh button (yellow box)
A few things to keep in mind
- There might be slight size discrepancies as the exchanges’ minimum sizes are different for each instrument.
- All orders are market orders — mind the exchange fees!
- When executing, be aware of your existing positions on the exchange — KF will execute “over them”.
Going further: BetaPlay
BetaPlay allows you to easily screen and build indexes using the Perpetual Futures available on FTX and Binance Futures.
You can get BetaPlay from the Kingfisher’s Bazar
How to use BetaPlay
- Markets: allows you to add/remove instruments to/from the chart
- Top Markets: allows you to quickly select subselection of outperforming/sub-performing markets by volume and 24h %change
- Flow rotation: Where is the money flowing? What are alts trending? Another level of “What to trade?”.
It can help you detecting early trends.
How to read:
From latest 3 zigzag legs of BTC, low to high range must be at least 3%.
Calculate the % return of top 10 markets sorted by 24h traded volume (on FTX exchange). Then sort those returns descending.
The markets’ price are in USD. Which you can switch to Markets/BTC or Markets/ETH.
The result: There are 3 columns from 3 legs: Down, Up, Down. The last column is sum of first 3 columns.
Market Overview: Allows you to quickly screen through the available markets, and sort them given Volumes, 24h % change and 24h OI/Vol
- Basket Plotter: The basket plotter helps you to quickly build and visualize composite indexes. write the instruments to long, which to short, and directly see how it evolved over the past few days. You can then Save it and pull it on the main chart along with the other instruments, by selecting it under the “↓” menu.
Note: When saving, click on “Sync to KF Index” to send the newly created index to the KF Index manager to quickly trade it.
- Composer: Quickly sort by Beta and % Change different pre-computed indexes, and tweak their overall basket weights.
What happens when you long the top performing and short the bottom performing at the same time? Have fun exploring the countless possibilities 😉
Of course, you can also save the created composite index and easily sync it to the KF Index manager for easy execution.
- ↓: Find all your saved index to quickly chart them on the main BetaPlay charting screen
- Watchlist: Save and load “baskets of indexes”, for quick access to your favorite classic and exotic instruments
Welcome to index-ception 📈
The KF-Index manager is available in exclusivity on thekingfisher.io to subscribed users.
To get started on thekingfisher.io, check out the guide.
And join us on Twitter or Telegram for any questions or further GEX and liquidations analysis!
Articles and links: