Bitcoin Forum

i noticed that there are a lot of 5 dollar bids and asks in the Bitstamp order book (probably by the same person).

is this a form of dollar cost averaging?
what is the point of these orders?

i think people just do it in thinking that if someone ever just sold a coin for 5$ then they would get it or its just someone messing around with the buy orders

I think BS has their own liquidity bot. Sort of a market maker.

Another option is just someones bot scalping a percent or two across the spread

The orders go up and down exactly 23-24$ from the current price in 3cents intervals. So there should be around 600 bids and 600 asks. This is the work of a bot. But I don't really see a sense behind this.

Can somebody explain to me why exchanges charge a relativ amount of fee and not a fixed amount (+ relative)?

With Bitcoins divisibility,  you need to be able to buy/sell pieces of a coin, so you can't charge a flat fee because then it would cost 7 or 10 or $24 to buy/sell .01 BTC. That would be ridiculous. So for smaller orders, a percentage based fee is much better. On the other hand, the fee is higher than your typical stock brokerage for a large order.

Edit:
I guess you mean more along the lines of say, a $5 fee no matter the order size?
I have no idea. It would cut down on the spam orders, but it would also take out some liquidity since some people can't buy large chunks at a time and aren't going to go all in or out for each trade

I see it that way: Like on the block chain every transaction cost the same ressources. Ok, you have to consider outputs. If you buy up 100 tiny 5$ sell orders this requires more ressources than to buy up one 500$ sell order. But this is not the fault of the buyer.

I can understand the problem that you would have a higher fee on small volume transactions. But this is intended. This is the same with every transaction service in the world. You could make on Bitstamp 1$ dollar fee(or let's say 50cent) plus 0.15%. This would prevent all these tiny bids and asks and is not a problem for long term buyers of relative small amounts (100$) and no problem of real day traders (volume above 200-300$ per trade, I would guess).
Break even would be at 0.5 + x*0.0015 = x*0.002 -> $1000

Edit: So no, 5$ per trade is way to much. 50Cent or 1$ are enough. (or 30Cent)

In general, for a lot of the other coins (i.e. alts), there tends to be a slew of spread out orders in the low values on the chance that the market dips so they can in essence capitalize on a dip (kinda like a short).

I don't think this is the case with this; I tend to agree that this is more of the work of a bot acting as a "market-maker" of sorts.

I thought it was high frequency trading.

Bots dude. No person would be doing a $5 cost averaging. It will be just to heck pf a job to do.
They are just messing with the market. By giving lots of orders.