When I first went over to Bitfinex and started shorting. I soon realised that if I set my stop loss anywhere near where the market action was going, it was a near inevitability that it would get called. For this reason, I started routing margin calls through Bitstamp which resulted in me being able to proceed and make reliable trades, placing safe margin calls, both in terms of minimising loss and also in terms of being sheltered from the spot price.
Bitfinex have recently taken this option away however, leaving only the Bitfinex order book available for placing margin calls. The big problem with this is that the Bid/Ask walls on Bitfinex are a big fraud full of liar Bids and liar Asks, unlike the 'liar' offers on other exchanges' order books, the majority of Bitfinex liar orders cannot be triggered because their will not be adequate margin in the account creating them and registering them on the order book. For example, i can have enough funding and leverage in my account to to order 10 BTC, but I can repeat this order until infinity, and it will show up as legit offer in order book. I would further suggest, that there are bots which are programmed to manipulate these liar walls, that also have access to a list of trader's margin calls. The bots can then calculate which margin calls are 'profitable' to harvest and which aren't. Today, I got a margin call on what should have been a blinding short. My stop loss was behind 350 worth of Ask bids, the majority of those bids vanished and a 63 BTC order then triggered my short stop loss, right at the near tip of the price spike, despite Bitstamp going in opposite direction. This is bullshit. This is theft. I can't prove it, but I would bet that the operators of the exchange are involved in these sorts of farming operations.
Keep away from the place or give it a try and find out the hard way.
Hello,
I think there is a misunderstanding here, and I would have appreciate if you have send us an email to ask for explanation rather than accusing our company of theft and lies.
As I'm a nice guy I will explain you what has changed:
First, before the change, routing to BSTP was less interesting than not routing your orders. By not routing your order, you would have the same than by routing to BSTP PLUS eventually additional Bitfinex orders.
Furthermore, because of the way Bitstamp API is designed, there was no way for us to actually place your order on Bitstamp. It was executed on Bitfinex and the system was trying to match this execution with a market order on Bitstamp. This could (and was) exploited by traders sometimes, as we could not control the execution price.
This had also other problems, linked to the fact the we were pulling Bitstamp orderbook each trading cycle, which was slow, prone to errors, and resulted in overall slow (and sometimes stalled) trading engine, with crossed orderbook. And other small issues.
What has changed now:
Bitstamp orders are still there: they are integrated as BFX orders into our own orderbook, by grouping them in small increment, with slippage+ our own fees accounted, to give you a "integrated fee" of 0.15 to 0.25% of the price + BFX fees of 0.1 to 0.15%, compared to the old fixed 0.35% fee. In other words, with the discount you can have on BFX fees, you can on average pay less fees than before.
But the result in term of liquidity is THE SAME than before with a non-routed order, and better than a routed order.
Furthermore, there are not distinguishable from any BFX orders because there is no reason for that: you have a ask or a bid, it is executed or not depending on your order and that's it. The only reason we integrate Bitstamp orderbook as tightly as possible is because our business is based on trading volume, and the more volume we have the better.
This has several benefits:
-Several times faster trading engine
-No more crossed orderbook (more attractive for market makers)
-Better management of our liquidity on Bitstamp
I hope this clears things out. If you still have any questions please don't hesitate to ask, but keep in mind that although I love to explains things to people who insult us during my few breaks I have between days and nights of working my ass off to make a better exchange, my patience has some limits
Oh, and one last thing: we do not have bots accessing stop orders price and margin call liquidation price to place orders. The more profits traders make, the more they trade, the more we make profit. Not the other way around.
Thank you
Raphael
Bitfinex team
