Do Trading bots control the market

[Mjbmonetarymetals]

A customer of mine considers the trading bots to be ultimately in control of the market able to manipulate the market up or down, even to zero. Any insight I could pass on ?

[1714025720]

1714025720

[John (John K.)]

A customer of mine considers the trading bots to be ultimately in control of the market able to manipulate the market up or down, even to zero. Any insight I could pass on ?

It depends on the funds behind the trading bots.

[Pteppic]

Hi Mick,

A trading bot is just another market participant trying to (presumably) maximise its profit. Arbitrage bots just help to equalise prices across different markets, so although they might do a lot of trade, they can't push the price of bitcoin as a whole up or down a significant amount. Bots that are based on technical analysis can probably push the price one way or the other but as the post above says, it depends on how much funds they have available.

Behind every bot is a person who has given the bot its funds. To move the market a lot, you need a lot of funds. Whether the people with a lot of funds are just buying and selling manually or doing it via a bot is not the critical issue.

[Mdex]

Pteppic said it all, i would really like to learn more about that.

[Mjbmonetarymetals]

Really appreciate the posts, so looking at the recent trading data through mt gox doesn't strike anyone here as unusual, trading volume etc. etc.  ?  Or in other words mt gox is the most accurate barometer whereby a person selling off exchange would base there prices ?

[tunafish]

I know on Wall Street (NYSE to be exact) something like 60%+ of all orders are now done completely by computers. I'm talking high frequency trading and other buy/sell orders based on algorithms, not users with online brokers. I imagine there are btc "bots" out there and there will be more in the future. It could become a real problem as far as creating volatility in the market, imagine if 30% of all btc are controlled by "bots" and they all have a price target to sell at. One bot sells a few thousand coins at its target, causing another 5 bots to sell a few more thousand at their target, causing another 25 bots to sell hundreds of thousands and so on. A handful of users with alot of bitcoin could corner the market by buying/selling en masse and trigger bots to buy/sell.
The more btc is used and treated like a futures option or stock the more likely this problem is, the more btc is used and spent like a currency the less likely this problem is---or hopefully at least less prevalent.

[Mjbmonetarymetals]

Thanks for the post tunafish , could bots cause a flash crash? So the price correction yesterday wasn't that just because 'a or the bot stopped, then when it kicked in again didn't the price start going back up ?

Does mt gox itself use a bot?

[Luno]

A bot can be used to drive the market in a certain direction short term or simulate volume. It can be used to fill the order book to simulate a lot of buyers or sellers.

Most of what you see is an illusion. The buy side is not as loaded as it seems on the other hand big traders don't advertise their big bids or asks!

You learn that eventually from your mistakes.

Manual trading will not go out of fashion, but It's more week trading than day trading.

[Mjbmonetarymetals]

Cheers Luno, big traders not advertising there bid or asks , do you mean they just buy or sell at the market price? Anyway need to do my own reaserch I haven't got trader blood running through my veins 

[Luno]

Cheers Luno, big traders not advertising there bid or asks , do you mean they just buy or sell at the market price? Anyway need to do my own reaserch I haven't got trader blood running through my veins  

Hi, I have no idea if there any ex pro traders here, It could be nice with some tips.

The big traders don't show their intent by having big orders on the book. So big walls are almost always fake.

They have their target price and buy small chunks below a certain price. When they got enough coins they put up a buy wall to drive the price up ad as the price rise, they put up a new wall at a higher price.

When they gained enough, they start selling, not in one big dump but little amounts not to scare anyone.

In the end they either dump a lot to drop the price down to their buy order exactly, or they put up sell walls to drive price down.



The buy orders value here down to $11.75 is 80.000BTC but I'm pretty sure that 20.000 of them are fake.

So the big trader uses bots to manage his simulated walls and moving them around to make it look like there are nervous buyers or sellers, by moving orders closer to the current price. The instant he chooses to "break out" of a price range his fake orders are cancelled instantly and the small traders left get wiped.

Last year we had more volume and the market had a more natural feel to it. Look at any other traded stock or currency, and you notice that the higher volume in real world exchanges cancel out any individuals manipulation so you easier can do trend analysis.

This is ofcause no reason to be scared away from trading, but eventually you will discover that you are not speculating against the combined consiousnes of the traders, but against the market maker. It's more like a chess game where you try to think 2 moves ahead and take advantage of his plan.

Maybe this is not special to Bitcoins but I Don't have any other trader experience.

You learn a lot here that's for sure and when you close a trade up 5 or 20%, you feel like Michael Douglas because you just made $70 :

[zvs]

Cheers Luno, big traders not advertising there bid or asks , do you mean they just buy or sell at the market price? Anyway need to do my own reaserch I haven't got trader blood running through my veins  

Hi, I have no idea if there any ex pro traders here, It could be nice with some tips.

The big traders don't show their intent by having big orders on the book. So big walls are almost always fake.

They have their target price and buy small chunks below a certain price. When they got enough coins they put up a buy wall to drive the price up ad as the price rise, they put up a new wall at a higher price.

When they gained enough, they start selling, not in one big dump but little amounts not to scare anyone.

In the end they either dump a lot to drop the price down to their buy order exactly, or they put up sell walls to drive price down.



The buy orders value here down to $11.75 is 80.000BTC but I'm pretty sure that 20.000 of them are fake.

So the big trader uses bots to manage his simulated walls and moving them around to make it look like there are nervous buyers or sellers, by moving orders closer to the current price. The instant he chooses to "break out" of a price range his fake orders are cancelled instantly and the small traders left get wiped.

I figured that at least a few of those mtgox bots are down to the .25% commission rate.  so if the price is at $17, you only need a 9 cent swing to make a profit, eh?   quite often the bid & ask are more than 10c apart..    might not be as easy now as it was when it was at $6-8 all summer

right now someone is selling 0.01 whenever it goes up.  why would you do that unless you intended to buy?  afaik, there is still no way to short bitcoins

[jago25_98]

Any relationship here to S3052's newsletter?
(deliberately vague question, open for your interpretation)

[Bitcoinpro]

bots have minimal control over a smart trader

[joeblack]

A customer of mine considers the trading bots to be ultimately in control of the market able to manipulate the market up or down, even to zero. Any insight I could pass on ?

Yes,  indeed

Money & Speed: Inside the Black Box is a true thriller that takes us to the heart of our automated financial world. On the basis of interviews with people directly involved and data visualizations to the millisecond, a reconstruction of the fastest and deepest drop in U.S. stock markets ever.

http://www.youtube.com/watch?v=H4BzsevJthw

[Bitcoinpro]

A customer of mine considers the trading bots to be ultimately in control of the market able to manipulate the market up or down, even to zero. Any insight I could pass on ?

this would only be possible if the bots had access to an unlimited amount of funds and we only know of one group with this 

[Juan007]

G-BOT does a massive mechanical scalping/hedging action

[incomefx]

well we all know in forex trading bots control the market.

in BTC it's no clear enough (not enough samples), so all we know is just speculation

[cryptofan5]

I think sooner or later the bots will control the market. Even at stock exchanges they mostly use high speed trading bots these days.

[Grand_Voyageur]

I think sooner or later the bots will control the market. Even at stock exchanges they mostly use high speed trading bots these days.

+1

[elgimpo]

Alt coin exchanges are riddled with them now