Controlling market volatility is essential for sustaining profitability while developing market-making bots. In order to account for quick price swings and lessen exposure to unexpected losses, a market-making bot constantly modifies its bid-ask spread, widening it during periods of high volatility. In order to reduce risk, it might also employ stop-loss systems, which would immediately halt trading if the market conditions became too unstable. Even in unstable situations, the bot makes sure it trades safely by continuously observing market depth, price swings, and liquidity.
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