Speakers (including Kosta Ouzas) discuss an algorithmic Bitcoin trading strategy and explain its behavior after a liquidity grab. In this excerpt the speaker describes two on-screen lines and identifies the orange line as the weighted average price — the cumulative price of an open position — noting that the algorithm averages down (buys as the market falls), which drags the weighted average down and allows the system to take profit or manage directional bias.
And if our directional bias is incorrect, the algorithm is going to be in a position where it can take profit. And if you don't mind just moving across to the right now a little bit, Costa, I'll explain kind of what the algorithm's done. So you're going to see two lines on the algorithm. The first one is that kind of orange line. What that is the weighted average. That's the weighted average price. So it's the cumulative price of your open position. And what you'll notice is it's actually being dragged down as the market falls. That's because we're averaging our position and constantly buying Bitcoin at good places, which allows us to take our open position down with the market.
