Transcript excerpt from a YouTube video describing an algorithmic trading strategy during a violent market move: the algorithm accumulates positions when the market moves against it by buying into a large liquidity pool, avoids liquidation, completes buys near the liquidity bottom, and then closes positions for profit as price rebounds.
If we have a look at what else is happening, the algorithm essentially waits, makes its next buy, and we have a similar situation play out. Once again, the market moves against us. This time it's pretty violent, but it's important to see what's happening because there's this huge pool of liquidity here. And what's the algorithm doing? It's not getting liquidated, it's picking up more positions. We buy more, we buy more. We make our last buy, essentially at the bottom of the liquidity after it's already been taken. And now we know the algorithm's in a really good position to take. Price bounces back up as it always, and we close all up as here in a profit.
