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Author Topic: automated day trading  (Read 5661 times)
opticbit
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July 12, 2011, 09:42:46 PM
 #21

i'm looking into what bots are good options to throw some coins at.

Set up the same thing..
http://bit.ly/btcrefs
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rizzn
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July 15, 2011, 07:16:25 PM
 #22

I've developed a bot for gox trading (hosted on google app engine) which I've been using with reasonable success so far (avg profit 1-3% per day).  I am considering opening it up to outside investors and want to get an idea of the demand for such a service.  I will most likely settle on taking a percentage of the profits that it generates (as opposed to alternate pricing schemes).

It is certainly not as profitable [longer term] as simply holding at this point but it does offer the advantage of capitalizing on the near-constant noise (and is thus a good avenue for diversification).  I will, of course, over time increase its efficiency and customizability but it is already reasonably efficient and customizable.

How would you provide investors details of earnings, and what would be your policies on deposits and withdrawals?

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Fireball
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July 16, 2011, 08:54:03 AM
 #23

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It is certainly not as profitable [longer term] as simply holding at this point but it does offer the advantage of capitalizing on the near-constant noise

The problem is here. Any trading strategy must be above buy-and-hold as a minimum criteria for consideration. And there are millions of strategies which are above buy-and-hold for only a very small amount of time (e.g. they all perform perfect on the backtesting data, but will make huge loss in a few days or weeks).

Though, there is one exception. Since the bitcoin market is just emerging, it may be inefficient and thus even simple algorithms would be profitable.

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July 21, 2011, 07:49:24 AM
 #24

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It is certainly not as profitable [longer term] as simply holding at this point but it does offer the advantage of capitalizing on the near-constant noise

The problem is here. Any trading strategy must be above buy-and-hold as a minimum criteria for consideration. And there are millions of strategies which are above buy-and-hold for only a very small amount of time (e.g. they all perform perfect on the backtesting data, but will make huge loss in a few days or weeks).

Though, there is one exception. Since the bitcoin market is just emerging, it may be inefficient and thus even simple algorithms would be profitable.

It's not a problem if you look at it as an investment of USD with a profit in USD.  Sure, it's not as profitable as simply buying and holding BTC when BTC explodes; but it is a first-order derivative and when the price of BTC is stable, it performs much better than BTC itself.  i.e., it's doing *very* well compared to BTC when the price of BTC holds at $15 for the last few weeks as it has.  deltaBTC = 0, deltaDerivative > 0.

You can also look at this as a less-risky investment than BTC itself (i.e., more diversified--akin to a mutual fund) since at any given point in time, your position is half USD/half BTC (on average).

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johanatan
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July 21, 2011, 07:50:53 AM
 #25

I've developed a bot for gox trading (hosted on google app engine) which I've been using with reasonable success so far (avg profit 1-3% per day).  I am considering opening it up to outside investors and want to get an idea of the demand for such a service.  I will most likely settle on taking a percentage of the profits that it generates (as opposed to alternate pricing schemes).

It is certainly not as profitable [longer term] as simply holding at this point but it does offer the advantage of capitalizing on the near-constant noise (and is thus a good avenue for diversification).  I will, of course, over time increase its efficiency and customizability but it is already reasonably efficient and customizable.

How would you provide investors details of earnings, and what would be your policies on deposits and withdrawals?

The plan was to merely make it a fund on GLBSE.  You can buy and sell shares of that fund just like BTC itself (or mutual funds or what have you).  All calculations would be done in USD and converted to BTC on payout.

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