Strategies for dealing with trading bots?

[adhitthana]

It is interesting to see the very active presence of trading bots in crypto markets.
I wonder if anyone has any ideas or experience with dealing with them to get a better result?

For example one can offer or bid ahead of them to see where they stop front running, and to see whether they might be keener to go in one direction than another (perhaps?)

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[morantis]

It is interesting to see the very active presence of trading bots in crypto markets.
I wonder if anyone has any ideas or experience with dealing with them to get a better result?

When you said "dealing with them" I got the impression that you were against the use of bots, but the rest of your statement seems to be for them.  Which way are you going?

[adhitthana]

It is interesting to see the very active presence of trading bots in crypto markets.
I wonder if anyone has any ideas or experience with dealing with them to get a better result?

When you said "dealing with them" I got the impression that you were against the use of bots, but the rest of your statement seems to be for them.  Which way are you going?

I edited my post as you were posting by the look of things, so my editing may have made things clearer.

I'm not for or against. Though it can be annoying when they jump in front of an order by 1 satoshi and then cancel if I subsequently cancel.  
If they have weaknesses then I see no issue with exploiting those weaknesses.

Added in edit:

for example I think I have in the past, if I wanted to buy, offered down, and watched a bot offer ahead of me until I got to a level I liked and then bought from the bot. That was a while ago though and bots are probably more prevalent now

[morantis]

It is interesting to see the very active presence of trading bots in crypto markets.
I wonder if anyone has any ideas or experience with dealing with them to get a better result?

When you said "dealing with them" I got the impression that you were against the use of bots, but the rest of your statement seems to be for them.  Which way are you going?

I'm not for or against. Though it can be annoying when they jump in front of an order by 1 satoshi and then cancel if I subsequently cancel. 
If they have weaknesses then I see no issue with exploiting those weaknesses

We have all seen the BTC gambling bots.  They run on the high/low and other games with a very basic old-fashioned progressive betting strategy.  Now in a limited and controlled case like that, time is the weakness of the bot.  There is a scientific statement that involved a monkey and a crayon.  It says, not exactly, that given enough time drawing with a crayon, the monkey will write its own name.

While this is impossible for the monkey, the statement shows that anything and everything not CAN happen, but WILL happen if given from this point to the end of eternity.  The gambling bot depends of the high odd that the game will not be lost X number of times in a row, but given enough time, it will happen.

Trading bots respond to criteria.  If BTC price is X, then sell X number of BTC.  To beat a bot, you need to know what rules it is playing by and set it up to take a fall.

[morantis]

Lets build a simple scenario based on a very stupid trading bot.  So, you as a human want to sell as many Bitcoins as you can at the highest price possible.  You would like to have purchased them at a low price as well, but perhaps you already have amassed 1 BTC.  The current price is around $400 or a bit over.  You want to sell at a bare minimum of $600.

What currently affects that price?  The price at which people(or bots) trade.  So, can you find a limited time when there are very few traders and get you a little alone time with the bot?  Maybe, the right day of week, the right time of day.  It is hard.  Now, if that bot were to for some reason buy a Bitcoin at 1000, the price would briefly jump.  You can't count on being the seller, that would be too easy and too nice.

.......con't in a moment

[morantis]

Didn't mean to take over your thread, lol.  But this is an interesting discussion.

So, why would the bot buy or sell at that higher price?  What makes the bot choose this or that?  Assume that our stupid bot will sell its supply when the price hits a certain number.  The problem is that the price is going to gradually change, not jump.  If the price hits say, 450, the bot sells and there is no 1000 price sale.  It would take a team of at least two.  The timing would have to be right and the bot very stupid.  I drop a half a Bitcoin of the same exchange as you and the bot.  I put out a 1000 sell ticket and hopefully you are the one to pick it up.  The bot immediately sees the price jump and sells at a high price.  Now the price is high and will not last long.  This is when you sell your Bitcoin and the half you just picked up and pray that someone or somebot buys it before the price drops.

Most bots are much smarter than this and the market is not that easily controlled, but this is an example of the thinking that you need behind dealing with the bots and the market.  You would be just as successful putting the time and effort into a high SEO and trusted blog with accurate information for five years to gain the community trust and then hitting the blog with false Bitcoin information causing a FireSale and then buying up the remnants before the market recovers. lol

[adhitthana]

Didn't mean to take over your thread, lol.  But this is an interesting discussion.

Please, be my guest

I think that bots try to extract as much information as they can and use the information they consider useful. I also think most bots are probably neutral WRT direction (though some may be momentum driven).

My assumptions about bots

1. Neutral WRT direction. They like to be square.
2.They have a certain number of units they will buy or sell usually, which is a function of liquidity.
3.They are happy to bit 1 Satoshi more than me up to a level.
4.This level (i.e. the amount they will pay or sell at below the bid or offer) changes depending on their own position.

Not so sure about 4 but I assume it is true, and it seems to be in practice.
Not totally sure about 1 either

[morantis]

Didn't mean to take over your thread, lol.  But this is an interesting discussion.

Please, be my guest

I think that bots try to extract as much information as they can and use the information they consider useful. I also think most bots are probably neutral WRT direction (though some may be momentum driven).

My assumptions about bots

1. Neutral WRT direction. They like to be square.
2.They have a certain number of units they will buy or sell usually, which is a function of liquidity.
3.They are happy to bit 1 Satoshi more than me up to a level.
4.This level (i.e. the amount they will pay or sell at below the bid or offer) changes depending on their own position.

Not so sure about 4 but I assume it is true, and it seems to be in practice

An interesting question would be would a bot ever stop.  There would be limits and settings to make it stop at a certain amount I am sure.  But let us say that by increments you are getting the bot to buy and sell.  The price is slowing going up or down, but the bot keeps going because it is selling its assets as quick as it is buying them.  Instead of fooling a bot into a one time sale, you could fool it into a series of buys and sales that puts you right where you want to be.  Since it is a computer program, that series could be hundreds of steps and still be complete in seconds.

[shanem]

The best way for dealing with trading bots is to ignore them. A lot of times, they do not know what they are doing. I have seen bots buying at the top many time when someone put up a huge wall to bait bots to buy on the sell side.

[HeroCat]

Trading bots will give you profit with right settings. And settings depend from you - simple as that. So you can profit and can also loose. Do not think that just the trading bot can give you profit on auto 

[Nxtblg]

The best way for dealing with trading bots is to ignore them. A lot of times, they do not know what they are doing. I have seen bots buying at the top many time when someone put up a huge wall to bait bots to buy on the sell side.

Good advice. You can sometimes play them if you know what you're doing, but that's risky - especially if the bot owner gets wind of what you're doing and recodes.

[entertheabyss]

Bot are just like normal traders just more mechanical, they dont need to take breaks and they don't make mistakes. Build your own bot. Any trading strategy you have you can build a bot to outperform you.

[Spoetnik]

click the mouse button REALLY fast