Are trading bots slow death for altcoins?

[greyworld]

Lately I've been trading a lot and I've had a chance to watch how the bots work.  It's really annoying.  But aside from that, I'm starting to feel like they, long term, leech value out of the coins and essentially hand it to the exchanges and bot operators.

They all work with the same basic premise: Track the exponential moving average, the volume of trades, and when it goes beyond the middle range (right on the line), either buy or sell under certain conditions.

Which sounds reasonable enough so far, if it's just the same thing a person could do, why not let a bot do it, right?

Here's why I feel they're a toxic component to the trading process:

1) They don't care at all about what the coin is about, it's fundamentals, management, nothing other than it's EMA score.  They would literally trade dog turds around if the market was volatile enough.

2) They cut humans out of the process unless the humans don't mind getting the short end of the stick.  The only way to get your trades in on a bot-infested coin is to either take current market value or keep your offer so close to it that you might as well have.  If you try to buy too far below a coin value, they make an offer 1 sat higher than yours.  If you try to sell too far above coin value, they make an offer 1 sat lower than yours.  By the time you get your trade in, the price has already changed enough that it's probably not a good trade anymore.

3) They work against natural market dynamics.  In a botless world, the actions of a coin's team and the fundamental laws of supply and demand dictate a coins value.  But in the bot's world, the only thing that matters is 'is it high' or 'is it low' (and, a bit, what is the current volume).  So if a great coin gets good news (like GEO did recently), and as soon as the coin starts to climb a bunch of people start selling... that's why.  The price rose enough to make it profitable to sell, so they will.  Which then drives the value down until it's back in EMA range.  Bots are fundamentally incapable of HODLing.  That's not what they're there for.  And if this reaction drives value down enough to spook human investors into selling, eventually the value goes down below EMA and the bots will buy the coins right back to repeat the cycle again in a moment.

This cycle ultimately removes volatility from a coin, while constantly edging it downwards.  I think the steady downwards trend is because of trading fees, but maybe it's because humans eventually get fed up and leave.  I'm not sure.



So... that's my rant about why bot's are screwing up crypto exchanges.  Thoughts on this?  Possible solutions or strategies for mitigating these effects? 

I've been giving some thought to programming a "brainless" bot that just takes commands from me as to what trades I want to make, and then it does the 1 sat snipe BS the actual bots do, to make sure my trade has a better chance of happening.  But otherwise, it wouldn't make any decisions and it wouldn't have an autopilot.   Maybe that's what's needed?  It feels like a cheap trick that edges out other humans from the process so I'm reluctant to take those steps... but I want my trades to be successful so that has to take priority.

Here's an example of a trading bot ("gunbot") along with detailed descriptions of how it works:
https://bitcointalk.org/index.php?topic=1715214.0

[Red-Apple]

They all work with the same basic premise: Track the exponential moving average, the volume of trades, and when it goes beyond the middle range (right on the line), either buy or sell under certain conditions.

it is not as easy as that.
and if one bot is using such strategies it won't change much about the whole market. it is only one way of making profit from a market. and if the market is headed in a direction it will continue to do so.

This cycle ultimately removes volatility from a coin, while constantly edging it downwards.  I think the steady downwards trend is because of trading fees, but maybe it's because humans eventually get fed up and leave.  I'm not sure.

no.
these altcoins on are downward trends only because they are pump and dumps and you happened to see their dumping era.
you can find other altcoins that have been stable and had a solid movement. like Monero (apart from past couple of days of pump) litecoin. but those shitty pump and dumps coins will go down even if there were no bots.
people are fed up with the "pumps and dumps" not the bots or the market.

I've been giving some thought to programming a "brainless" bot that just takes commands from me as to what trades I want to make, and then it does the 1 sat snipe BS the actual bots do, to make sure my trade has a better chance of happening.  But otherwise, it wouldn't make any decisions and it wouldn't have an autopilot.   Maybe that's what's needed?  It feels like a cheap trick that edges out other humans from the process so I'm reluctant to take those steps... but I want my trades to be successful so that has to take priority.

that 1 sat thing is not really something effective. that is something desperate as a matter of fact.
if you speculate a price movement then place your orders at that price, you shouldn't worry about a little difference anyways. and if you are afraid just sell at market price, the prices are never with big spread for liquid coins.

[greyworld]

it is not as easy as that.
and if one bot is using such strategies it won't change much about the whole market. it is only one way of making profit from a market. and if the market is headed in a direction it will continue to do so.

No offense but it is that simple.  The link I provided explains it in depth but what I wrote is the gist of it.  And it's not 'one bot' (obviously).  There's shit tons of them.

no.
these altcoins on are downward trends only because they are pump and dumps and you happened to see their dumping era.
you can find other altcoins that have been stable and had a solid movement. like Monero (apart from past couple of days of pump) litecoin. but those shitty pump and dumps coins will go down even if there were no bots.
people are fed up with the "pumps and dumps" not the bots or the market.

Some coins won't be selected for bots because they are too stable.  Bot auto trading requires high volatility / high volume and a generally healthy curve (not recently pumped, not on a death spiral).

that 1 sat thing is not really something effective. that is something desperate as a matter of fact.
if you speculate a price movement then place your orders at that price, you shouldn't worry about a little difference anyways. and if you are afraid just sell at market price, the prices are never with big spread for liquid coins.

Sure it's desperate, I wouldn't argue that futzing around over 1 sat is laughable.  The real point of it is to make sure they're at the top of the list.  Not that they get 1 sat more.  And some coins do have a very high range during active trading.  I'm watching MCO go bezerk right now and it's not unusual for there to be a 15k spread between best bid and best offer.  That's 3% at the current rate.  A lot of traders are aiming for 5-10%, that's giving away an unacceptable portion of it.  Also putting your trades in ahead of time tells everyone your intentions, it lets other people put up walls in front of you that prevent your trade from going through.  Ex, you want to sell 10 coins at 6000 sat.  Someone else wants to make sure they sell their 5000 coins first at 5999.  It's entirely possible the market will run out of momentum before it cracks through those 5000 coins they're selling.  Sometimes I preset my sales, sometimes I don't, it depends on what's going on.

[mctrader001]

Now, I would consider cryptos to be inefficient. That's a good thing because our competitors are fellow humans, we are all eyeballing the same charts, reading to get a feel for the market. Prices sort of make sense. You can explain it because you can know enough as an individual to process it.

When I use to trade forex automatically, my buys and sells had nothing to do the fundamentals. I did not care reading about the news, bothering where to buy and or sell. I really had no need to look at charts. I just looked at my results and tweaked the system. Boring. I had to do it because forex was so big and nothing made sense. You could read as much as you can and try to get as much information as you can but you will never know enough to trade as a human 'eyeballing', 'feeling' or understanding the market. Cryptos at the moment is great because you can still trade as a human (manually). Because of it, prices were able to go so high (and also crash phenomenally). That's a good thing in trading.

With automated trading, I think you will see a lot less phenomenal price hikes (and also price dips) because as the market becomes more efficient, prices would tend to revert back to the average as soon as they become even slightly overbought or oversold. The good thing is that at the moment, no one knows what the true value of these cryptos are. Prices will therefore continue to move in unpredicted ways. Because of this, I think many algorithms/automated trading will suffer great losses at some point since most will likely not have the data to have tested such adverse conditions when they do occur. That hopefully, discourages their use.

[oreits11]

the similar to work with the umstel platform as investor to gains with the chance as occupying use of automation with the manage of evaluation to gives with the contrast as notification to recalls as the moves of the price value to collect when invesment is mature and ready to request with the withdrawal.

[HashFace]

In the stock market, the second by second fluctuations in price are largely controlled by competing high frequency traders ... Something comparable to trading bots in altcoins....

But the overall direction of the stock market is still controlled by investors. 

Bots and HFT will probably make trading more difficult and less profitable for human day traders, but I doubt it will impact buy and hold investors much.

[criticoflife]

It's so draining trading on bot infested coins. I couldn't agree with the author of this thread more. As much as i despise the bots i have almost been driven to the point where "if i can't beat them, join them" Maybe i will have to go to the dark side and get a gunbot also.

[The Sceptical Chymist]

Lol, can those things actually make you money?  I've heard of them but never contemplated using one--and I've never even seen one in action.  As far as whether they're toxic to altcoins, I don't believe that's the case.  A lot of wall street firms use trading software, and they say it helps because they "inject liquidity" into the market.  I don't see that as being a bad thing, and who gives a shit whether the bot knows the fundamentals?  In crypto there aren't really any fundamentals to analyze.  It's all guesswork based on emotion and politics.  Most of these coins are shit anyway.   You're not going to wreck the world if you use one.

[disam]

there are bots trading in every market we know so far. And still those markets and trading goes on and on. It will be no slow death for alts, just harder to make daytrades.

[alyssa85]

Trading isn't at all about fundamentals (that's investing). Trading is just about profiting about movements in the market.

The bots actually make it easier for a canny human, because they all work the same way and are thus easy to predict. Half the skill of trading is predicting which way the price will move.

[BogdanGFTP]

Of course bots are useless for volatile markets

[easynote]

it is not as easy as that.
and if one bot is using such strategies it won't change much about the whole market. it is only one way of making profit from a market. and if the market is headed in a direction it will continue to do so.

No offense but it is that simple.  The link I provided explains it in depth but what I wrote is the gist of it.  And it's not 'one bot' (obviously).  There's shit tons of them.

no.
these altcoins on are downward trends only because they are pump and dumps and you happened to see their dumping era.
you can find other altcoins that have been stable and had a solid movement. like Monero (apart from past couple of days of pump) litecoin. but those shitty pump and dumps coins will go down even if there were no bots.
people are fed up with the "pumps and dumps" not the bots or the market.

Some coins won't be selected for bots because they are too stable.  Bot auto trading requires high volatility / high volume and a generally healthy curve (not recently pumped, not on a death spiral).

that 1 sat thing is not really something effective. that is something desperate as a matter of fact.
if you speculate a price movement then place your orders at that price, you shouldn't worry about a little difference anyways. and if you are afraid just sell at market price, the prices are never with big spread for liquid coins.

Sure it's desperate, I wouldn't argue that futzing around over 1 sat is laughable.  The real point of it is to make sure they're at the top of the list.  Not that they get 1 sat more.  And some coins do have a very high range during active trading.  I'm watching MCO go bezerk right now and it's not unusual for there to be a 15k spread between best bid and best offer.  That's 3% at the current rate.  A lot of traders are aiming for 5-10%, that's giving away an unacceptable portion of it.  Also putting your trades in ahead of time tells everyone your intentions, it lets other people put up walls in front of you that prevent your trade from going through.  Ex, you want to sell 10 coins at 6000 sat.  Someone else wants to make sure they sell their 5000 coins first at 5999.  It's entirely possible the market will run out of momentum before it cracks through those 5000 coins they're selling.  Sometimes I preset my sales, sometimes I don't, it depends on what's going on.

What about the trading fees that the owner of that Bitcoin Exchange put to make money on each transaction? They may like the trading bots.

[jayc89]

Lately I've been trading a lot and I've had a chance to watch how the bots work.  It's really annoying.  But aside from that, I'm starting to feel like they, long term, leech value out of the coins and essentially hand it to the exchanges and bot operators.

They all work with the same basic premise: Track the exponential moving average, the volume of trades, and when it goes beyond the middle range (right on the line), either buy or sell under certain conditions.

Which sounds reasonable enough so far, if it's just the same thing a person could do, why not let a bot do it, right?

Here's why I feel they're a toxic component to the trading process:

1) They don't care at all about what the coin is about, it's fundamentals, management, nothing other than it's EMA score.  They would literally trade dog turds around if the market was volatile enough.

2) They cut humans out of the process unless the humans don't mind getting the short end of the stick.  The only way to get your trades in on a bot-infested coin is to either take current market value or keep your offer so close to it that you might as well have.  If you try to buy too far below a coin value, they make an offer 1 sat higher than yours.  If you try to sell too far above coin value, they make an offer 1 sat lower than yours.  By the time you get your trade in, the price has already changed enough that it's probably not a good trade anymore.

3) They work against natural market dynamics.  In a botless world, the actions of a coin's team and the fundamental laws of supply and demand dictate a coins value.  But in the bot's world, the only thing that matters is 'is it high' or 'is it low' (and, a bit, what is the current volume).  So if a great coin gets good news (like GEO did recently), and as soon as the coin starts to climb a bunch of people start selling... that's why.  The price rose enough to make it profitable to sell, so they will.  Which then drives the value down until it's back in EMA range.  Bots are fundamentally incapable of HODLing.  That's not what they're there for.  And if this reaction drives value down enough to spook human investors into selling, eventually the value goes down below EMA and the bots will buy the coins right back to repeat the cycle again in a moment.

This cycle ultimately removes volatility from a coin, while constantly edging it downwards.  I think the steady downwards trend is because of trading fees, but maybe it's because humans eventually get fed up and leave.  I'm not sure.



So... that's my rant about why bot's are screwing up crypto exchanges.  Thoughts on this?  Possible solutions or strategies for mitigating these effects? 

I've been giving some thought to programming a "brainless" bot that just takes commands from me as to what trades I want to make, and then it does the 1 sat snipe BS the actual bots do, to make sure my trade has a better chance of happening.  But otherwise, it wouldn't make any decisions and it wouldn't have an autopilot.   Maybe that's what's needed?  It feels like a cheap trick that edges out other humans from the process so I'm reluctant to take those steps... but I want my trades to be successful so that has to take priority.

Here's an example of a trading bot ("gunbot") along with detailed descriptions of how it works:
https://bitcointalk.org/index.php?topic=1715214.0

I am only a trader so I don't like to have bots making automatic trades, they might go away soon.
If I was a project owner then I would use a Bot for testing purposes.

[doedz]

Lately I've been trading a lot and I've had a chance to watch how the bots work.  It's really annoying.  But aside from that, I'm starting to feel like they, long term, leech value out of the coins and essentially hand it to the exchanges and bot operators.

They all work with the same basic premise: Track the exponential moving average, the volume of trades, and when it goes beyond the middle range (right on the line), either buy or sell under certain conditions.

Which sounds reasonable enough so far, if it's just the same thing a person could do, why not let a bot do it, right?

Here's why I feel they're a toxic component to the trading process:

1) They don't care at all about what the coin is about, it's fundamentals, management, nothing other than it's EMA score.  They would literally trade dog turds around if the market was volatile enough.

2) They cut humans out of the process unless the humans don't mind getting the short end of the stick.  The only way to get your trades in on a bot-infested coin is to either take current market value or keep your offer so close to it that you might as well have.  If you try to buy too far below a coin value, they make an offer 1 sat higher than yours.  If you try to sell too far above coin value, they make an offer 1 sat lower than yours.  By the time you get your trade in, the price has already changed enough that it's probably not a good trade anymore.

3) They work against natural market dynamics.  In a botless world, the actions of a coin's team and the fundamental laws of supply and demand dictate a coins value.  But in the bot's world, the only thing that matters is 'is it high' or 'is it low' (and, a bit, what is the current volume).  So if a great coin gets good news (like GEO did recently), and as soon as the coin starts to climb a bunch of people start selling... that's why.  The price rose enough to make it profitable to sell, so they will.  Which then drives the value down until it's back in EMA range.  Bots are fundamentally incapable of HODLing.  That's not what they're there for.  And if this reaction drives value down enough to spook human investors into selling, eventually the value goes down below EMA and the bots will buy the coins right back to repeat the cycle again in a moment.

This cycle ultimately removes volatility from a coin, while constantly edging it downwards.  I think the steady downwards trend is because of trading fees, but maybe it's because humans eventually get fed up and leave.  I'm not sure.



So... that's my rant about why bot's are screwing up crypto exchanges.  Thoughts on this?  Possible solutions or strategies for mitigating these effects? 

I've been giving some thought to programming a "brainless" bot that just takes commands from me as to what trades I want to make, and then it does the 1 sat snipe BS the actual bots do, to make sure my trade has a better chance of happening.  But otherwise, it wouldn't make any decisions and it wouldn't have an autopilot.   Maybe that's what's needed?  It feels like a cheap trick that edges out other humans from the process so I'm reluctant to take those steps... but I want my trades to be successful so that has to take priority.

Here's an example of a trading bot ("gunbot") along with detailed descriptions of how it works:
https://bitcointalk.org/index.php?topic=1715214.0

I am only a trader so I don't like to have bots making automatic trades, they might go away soon.
If I was a project owner then I would use a Bot for testing purposes.

It's better to use your own analysis and not using bots. I mean some kind of pumper group.
I'm afraid the bot is doing a fatal mistake, and it's about money. losing money in a few seconds it is a big disaster.

[Wall-ET]

it is not as easy as that.
and if one bot is using such strategies it won't change much about the whole market. it is only one way of making profit from a market. and if the market is headed in a direction it will continue to do so.

No offense but it is that simple.  The link I provided explains it in depth but what I wrote is the gist of it.  And it's not 'one bot' (obviously).  There's shit tons of them.

This is just one way it can work, and if it does work only in this way it will start loosing soon, as the market will change and this strategy will not work anymore.
That is why in order to be profitable, it needs to addapt to the market and change strategies all the time.
The idea that they will not change much is that if they are workign only this, they will die once the market conditions change (in the long term). Thus not afecting the coin in the long run...

no.
these altcoins on are downward trends only because they are pump and dumps and you happened to see their dumping era.
you can find other altcoins that have been stable and had a solid movement. like Monero (apart from past couple of days of pump) litecoin. but those shitty pump and dumps coins will go down even if there were no bots.
people are fed up with the "pumps and dumps" not the bots or the market.

Some coins won't be selected for bots because they are too stable.  Bot auto trading requires high volatility / high volume and a generally healthy curve (not recently pumped, not on a death spiral).

Bots can trade stable coins as well. There is no limit. The only limit is the inventor of the strategie used by the bot. If they make one for stable coins (there are lots of strategies for this) then the bot will trade these coins.
If not they will not.

that 1 sat thing is not really something effective. that is something desperate as a matter of fact.
if you speculate a price movement then place your orders at that price, you shouldn't worry about a little difference anyways. and if you are afraid just sell at market price, the prices are never with big spread for liquid coins.

Sure it's desperate, I wouldn't argue that futzing around over 1 sat is laughable.  The real point of it is to make sure they're at the top of the list.  Not that they get 1 sat more.  And some coins do have a very high range during active trading.  I'm watching MCO go bezerk right now and it's not unusual for there to be a 15k spread between best bid and best offer.  That's 3% at the current rate.  A lot of traders are aiming for 5-10%, that's giving away an unacceptable portion of it.  Also putting your trades in ahead of time tells everyone your intentions, it lets other people put up walls in front of you that prevent your trade from going through.  Ex, you want to sell 10 coins at 6000 sat.  Someone else wants to make sure they sell their 5000 coins first at 5999.  It's entirely possible the market will run out of momentum before it cracks through those 5000 coins they're selling.  Sometimes I preset my sales, sometimes I don't, it depends on what's going on.

The 1 sat is called churring, and does not help much. The thing that it can do is reduce the profit that all traders (bots and humans) will take in the end and nothing more.
Only shitty bots are done in this way.



In final words:
Bots can not kill a coin. They can kill human traders, but not the coin.
Bots are good, as they provide liquidity. This is good for coins. This way they become stable and more attractive to investors.
No big investor likes to see his investment go from 100% profit to 0% then back and forth 10 times for half hour...
They like the stable movement and that is possible only with liquidity. As the bots provide this they are good for the market of coins...

BTW what you have seen (go up and fall of a coin after good news ) is just what is "pump 'n dump" most probably the news was fake just to generate momentum and the coin to be pumped and then the manipulators just cash out and sell the coin to the people who decide to join on the ride up. Then when the momentum is gone they dump the rest till they crash the coin and just buy @ low if they would like to repeat it. That is what you saw and it has nothing to do with the bots.

After all if that was true then the Forex would be dead... it is not and there over 70% (if not more...) of the volume is done from bots...

[minivan]

I dont think that they are all the same. Even on the market rn there are a lot of different settings and strats for bots. Also, there are private bots people dont even share. Most of TA rades dont care about tech and fundamentals so I dont think that smth is wrong with bots in that sense

[Leard]

the world is automated and this is a fact, but I do not think that bots like that affect the altcoyins. just a few years ago I heard a story in a certain company that trades in the market - previously there were 600 traders. Now there are only 2 traders and purely through the software trade