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Author Topic: Your opinion of trading bots...  (Read 2008 times)
MKEGuy
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April 19, 2013, 07:01:23 PM
 #1

I'm curious what everyone else thinks of trading bots.  Please leave your opinion out if you are currently using one because chances are you just love it and will praise it no matter what.  But when you look at the micro-economy we have here, these bots seem to be anything but good.  We have watched bots crash the prices time and time again at the whim of its owner.  Granted some others can recognize the pattern and benefit from it. (heck I've done it myself)  But long term I can not see the good for these things.  Personally I would like to see them removed from the exchanges or have an exchange created that is 100% free of bots.  Granted one can probably try to program something to get around a new set of rules but I'm sure no matter what it would be apparent if someone is using a bot in a new way or something of the sort.

IMO, these bots should not be allowed until we have a large enouch economy to allow them to run without crashing the market.  Wall street has them but they are not capable of single handly  crashing the market by themselves.

If enough people agree - I really think its in all of our best interests to make a large effort at changing this.  Even the exchanges would benefit because more of the orders placed will end up being legit orders. The load on their servers will be reduced and free up the resources for members who are trying to conduct legit trades.  We al know what happens when gox starts to get choppy and laggy.

What do you thinK?

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cbeast
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April 19, 2013, 07:16:48 PM
 #2

As long as you want Bitcoin to stay highly volatile and useless as a currency, then they are fine. They will constantly attract DDOS attacks, if you enjoy that kind of thing.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
yucca
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April 19, 2013, 07:20:57 PM
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What do you consider a bot, would you consider a simple auto stop loss system a bot?

In a way people are bots too, just slower reacting, if after a long uptrend people see the price sliding then they become more likely to sell, which further drives down price, this compounding effect causes fast down corrections as everyone tries to "get out at the top". But these corrections are inevitable as the market becomes overbought.

I personally think that most correction avalanches are caused by DDOS. Imagine if you had a dial where you could control DDOS aggression. You could basically fly the market just as you would a hot air balloon.

yucca
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April 19, 2013, 07:22:10 PM
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As long as you want Bitcoin to stay highly volatile and useless as a currency, then they are fine. They will constantly attract DDOS attacks, if you enjoy that kind of thing.

How do bots attract DDOS attacks?

botlove
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April 19, 2013, 07:25:06 PM
 #5

The right bots are a very very good thing.

Please note:  DnnBitcoin went down only about a week before the pop.  There would have been a ton of coins automatically bought and sold during the pop, if there had been more botters online.  That would bring more stability, and more liquidity, smaller margins, more competition.   Hell, I'll pay somebody $500 if they fix DNNBitcoin and make it public again.  =)    It's simple - you know the market manipulators want to move that price up and down for profit... that's a hell of a lot harder and more expensive when there are thousands of small bot orders in between the MMs and their margins.  =)

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April 19, 2013, 07:29:29 PM
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As long as you want Bitcoin to stay highly volatile and useless as a currency, then they are fine. They will constantly attract DDOS attacks, if you enjoy that kind of thing.

I detect no reasoning behind these claims.
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April 19, 2013, 07:37:39 PM
 #7

As long as you want Bitcoin to stay highly volatile and useless as a currency, then they are fine. They will constantly attract DDOS attacks, if you enjoy that kind of thing.

I detect no reasoning behind these claims.
1. Use Bots to cause volatility using algos.
2. Volatility causes panic buying/selling.
3. Panic attracts DDOS attacks and in turn amplifies panic. (This is speculative, but generally accepted.)
4. Market crashes.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
yucca
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April 19, 2013, 07:43:47 PM
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The right bots are a very very good thing.

Please note:  DnnBitcoin went down only about a week before the pop.  There would have been a ton of coins automatically bought and sold during the pop, if there had been more botters online.  That would bring more stability, and more liquidity, smaller margins, more competition.   Hell, I'll pay somebody $500 if they fix DNNBitcoin and make it public again.  =)    It's simple - you know the market manipulators want to move that price up and down for profit... that's a hell of a lot harder and more expensive when there are thousands of small bot orders in between the MMs and their margins.  =)


Good point well made botlove, they do add inertia and depth to the market, making it more difficult for price manipulators.

P.S.
If you've employed bots on DNNBitcoin then you are breaking "MKEGuy's law" as stipulated in first post Cheesy:
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Please leave your opinion out if you are currently using one because chances are you just love it

yucca
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April 19, 2013, 07:50:16 PM
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1. Use Bots to cause volatility using algos.

Please expand, how can algos cause volatility, to move the market costs you, no way around it (except fro DDOS).
If you sell cheap or buy dear then you will move the market, you need deep pockets for this, not bots.

2. Volatility causes panic buying/selling.

Yes both in humans and bots if the swings exceed stop loss thresholds.

3. Panic attracts DDOS attacks and in turn amplifies panic. (This is speculative, but generally accepted.)

I do not understand this. How can panic attract DDOS? I think It's the other way round; DDOS causes panic as people and bots dont want to get left in the lag and sell out.

jmw74
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April 19, 2013, 07:57:41 PM
 #10

As long as you want Bitcoin to stay highly volatile and useless as a currency, then they are fine. They will constantly attract DDOS attacks, if you enjoy that kind of thing.

I detect no reasoning behind these claims.
1. Use Bots to cause volatility using algos.
2. Volatility causes panic buying/selling.
3. Panic attracts DDOS attacks and in turn amplifies panic. (This is speculative, but generally accepted.)
4. Market crashes.

Load of nonsense.  Don't listen to this guy.

A "bot" is simply a program that makes trades for you.  While it may be possible to design an abusive bot, and I'm sure they exist, that doesn't mean bots in general are bad in any way.

And how blind do you have to be to make the argument "Because bots are used for evil, bots are bad", when I'm sure you see the folly in "Because bitcoins are used for evil, bitcoins are bad".
TsuyokuNaritai
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April 19, 2013, 08:03:15 PM
 #11

If you've employed bots on DNNBitcoin then you are breaking "MKEGuy's law" as stipulated in first post Cheesy:
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Please leave your opinion out if you are currently using one because chances are you just love it

Isn't it just vote disenfranchisement to bias the debate in the OP's preferred direction?

I'm curious what everyone else thinks of MKEGuy's law.  Please leave your opinion out if you are currently using it because chances are you just love it and will praise it no matter what.

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April 19, 2013, 08:07:23 PM
 #12

The traditional markets are plagued by the bots as well.

It would be beneficial to ban them from bitcoin exchanges.
BTCVirgin
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April 20, 2013, 01:55:53 AM
 #13

With complete disregard to "MKEGuy's law" ---- (sorry, maybe this needs a new thread)

Can anyone recommend somewhere I can get hold of a novice friendly bot and learn how to operate it?
yucca
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April 20, 2013, 03:00:31 AM
 #14

Some porn for MKEguy: Cheesy

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MKEGuy
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April 20, 2013, 05:59:00 AM
 #15

So again - the good for bitcoin and everyday users and people who want it to succeed would be?

The positive for the exchanges would be?

The reason other then pure greed that they exist?

Can anyone come up with an legitimate negatives to them being removed from practice?

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yucca
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April 20, 2013, 10:27:17 AM
 #16

The positive for the exchanges would be?

Well the exchanges like them, bots pay fees too.

The reason other then pure greed that they exist?

Correct, but it's the same reason that motivates human traders too. And the greed always starts in the mind of the human.

Can anyone come up with an legitimate negatives to them being removed from practice?

I really do think they add depth and stability to the market. Bots are unfeeling and logical. The only trouble comes when all their stop losses kick in at once, but the same is true for human daytraders too.

I can't see any firm logical argument against bots? Am I missing something?


MKEGuy
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April 21, 2013, 07:09:07 AM
 #17

The positive for the exchanges would be?

Well the exchanges like them, bots pay fees too.



Funny you mention this.  Do you ever notice how may of those bot orders never go through?  They are strictly there as false place holders and continue to change as the market changes and they cancel the orders and add them back in at a different price?  So actually I would say on a percentage of traffic and stress on the system vs completed orders - bots are a complete nuisance to the exchanges.

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yucca
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April 21, 2013, 12:29:52 PM
Last edit: April 21, 2013, 05:19:40 PM by yucca
 #18

The positive for the exchanges would be?

Well the exchanges like them, bots pay fees too.



Funny you mention this.  Do you ever notice how may of those bot orders never go through?  They are strictly there as false place holders and continue to change as the market changes and they cancel the orders and add them back in at a different price?  So actually I would say on a percentage of traffic and stress on the system vs completed orders - bots are a complete nuisance to the exchanges.

That's a fair point. I have been visualising the live stream and often see bids/asks placed either side of the trade line, they appear as diagonal geometric patterns in the price/time domain comprising of many small orders. Obviously the bot creator is trying to make an analogue system from the disreet one. So some bots are quite spammy and will add to server load. I cant visualise cancel nor see the userid of the order creator, but I'm assuming many orders are cancelled as the bot tracks either side of the tradeline waiting for fast deviations.

The bot I am working on would not operate like this, it will place single well chosen bid/asks and of course cancel them instead of let them hang if the order is not fulfilled in time.

MtGox should perhaps consider limiting bid/ask orders that a user can place per hour or day. So bots would be allowed provided they didnt spam.

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April 21, 2013, 07:45:18 PM
 #19

Just so it's not an abusive bot, I see no problem.
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April 21, 2013, 10:48:07 PM
 #20

Bot's are useful when you set them to buy and sell at certain prices,minimizing risk while away from pc.
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