It's not much a trader's problem Ente. It's lenders that mostly don't know what they are doing, ending up lending for 1/100th of the interest they can ask for for no reason (beside being complete noobs and not spending 5 minutes learning stuff).

I'm constantly amazed at some lender's stupidity: liquidity being taken with high interests at some point (e.g. 0.5%) then someone come and offer a huge amount at flash return for like 0.15%, which is stupid already, and then some other idiot come and undercuts even that xD Flash return is not even taken automatically so you can offer higher and still be taken even if there is $ 1 mil offered at flash return.
Just saying.

Nonce errors means you used same API keys in another app. So re-create API keys and use it only in one application.

What other brokers allow you to short bitcoin?  I know some people talk about using Metatrader 4 but what service is this through?

I have had some good experiences with Bitfinex but once you start to lose more and more money due to their site outages, you do have to consider other options.

I have what I consider to be a legitimate suggestion.  I've been trading here for a while, and have always remained loyal to the exchange and refrained from joining in the BFX bashing in this thread whenever things go wrong.  However, with that said, I've also lost very significant amounts of fiat/btc on numerous occasions due to problems that were always on Bitfinex's end.  I've put up with this because I legitimately appreciate the service you're attempting to provide, but this past week has been a little ridiculous (between the two trading halts I'm out close to 5 figures).  My suggestion is to consider refunding trading fees for a given period; this would serve both to compensate losses on our end, and to regain credibility for Bitfinex by making it clear that the exchange is not attempting to profit from our losses.  

Bitstamp is not a margin trading website, they don't have liquidations /margin calls, and don't care if the price goes to 0 because they don't lose anything.

On Bitfinex on the other hand, there are leveraged positions, and liquidations triggered can and have a cascading effect on a very volatile market, and if there is not enough volume to support it, we CAN take the price to 0 and lose millions of lenders money

Halting the trading engine is maybe annoying, but it's the right thing to do (and I must say it happens on all sort of market).

Thank you
Raphael

Here's your cause for all this:
https://www.mtgox.com/press_release_20140210.html

tl,dr:

Ente

There is a much deeper question involved here.

If we want to protect people against each other actions, if we try to prevent every possible way of "manipulation", we end up at a regulated market. In fact, the traditional markets became more and more regulated exactly this way: Whenever someone got burned, he immediately starts yelling, asking the "authorities" to protect him against losses. But if the "authorities" then place taxes on the gains, everyone is pissed off.


That being said -- an order book just shows offers, not more. It is not binding.
Fake orders and real orders can be placed and pulled any time. This shows some current sentiment, not more, not less. But for a reliable judgement, you should look at the actual deals, and more importantly, you should look at the actual trading volume.


Others have already pointed out, that it can be convenient for a trader to have long term orders sitting there, and temporarily place short term orders closer to the spread. At times you'll even place several buy and sell orders at the same time.

Now the proposal is to prevent or limit this pattern. Personally I think this shows a questionable mindset: basically you assume that it is necessary to watch and guard people's actions. This is nannying.

If we we consider placing such fake walls harmful, the proper way of defence would be not to "regulate", but to make them expensive: simply deduce the trading fees from any order considered for execution, even if the order will be discarded due to lacking margin.  

Here's a hypothesis I haven't heard before: The willybot was wasn't in in-house bot for Gox, but for Second Market, who used the "world's most established exchange" to buy in bulk. Most of the purchases were dark pool orders, but when that pool dried up, willy went to work. Now Gox is locked up and Second Market needs another source of bulk coins, so under the guise of a two-way exchange, they are actually buying on behalf of the bitcoin Investment Trust (BIT).

If anyone has made a purchase from 2nd Market, I will be happy to revise or discard this hypothesis, but I'd like some feedback either way. If I'm right, liquidity is being soaked up under the RADAR at a scale few are aware of.

Yep, we can all do this. And we can also all easily see when someone who just figured this out is playing around: You can put up 100 x 10 BTC bids or asks but you can't put up 1 x 1000 BTC - thus everybody can easily see that someone just figured this out. A bid order of 100s of small orders is quite easy to see.

It's no big deal, someone buys or asks from your "wall" and the orders cancel after stretching your margin to the limit.

You should be careful placing toy walls close to the spread if the book is thin overall because at some point I'll just FOK your order until you're at your limit and move the market with real actual funds backed by my exchange wallet (or trading wallet if you put a bid up) and then you're toast. And we can do the math, if you put up an ask of 1000 BTC with 100 orders when it's easy to see that you're only able to short 10 BTC - period. Thus I'll just put a real 100 BTC bid there and move it up until you get a margin call or your jimmies get sufficiently rustled. And I'm no big fish at BFX just because I can put real 100 BTC bids and asks up, there are quite a few 1000+ BTC position players in our sandbox.

It has been possible to add 100s of orders of your maximum order size for a very long time and it's never been a problem except for those who do it for fun.