(Closed) Butter Bot!: Premier Bitstamp, and BTC-E EMA Trading Platform (Closed)

[fible1]

I just want to let you guys know that we are keeping a close eye on the thread and taking notes.

So far:

1. Trade Log
2. Alterante Strategies
3. Stop loss.

We are discussing how to prioritize all of these but we have a huge set of development tasks ahead of us. We will be sure to post once we know when we can push these out, most likely we can make a final call after hosting/altcoins are out .

Look forward to more suggestions .

Pablo.

[NginUS]

Thanks, Pablo.

I just want to chime in another thought on what my ideal stop loss function would look like.

I notice a lot of the time the bot will make trades that will lose money, not large sums, but enough that over time my account would get nickeled & dimed to a significant extent.

For example the first trade it ever did was selling low & buying high, and it didn't just happen that 1 random time- it's happening so often that it's indicating that it's a common occurance. So somehow the bot sees trends and does what it thinks is best even when it's not always best, and I can't help thinking there must be a way to code a subroutine to check for these scenarios and protect against their occuring.

If somehow the trading engine can be programmed to only make profits, and not trade at a loss in these cases when it does so, the savings would add up I think.

For people who are trading with smaller amounts of money, these 3-9% losses are more of an impact on their working capital, and thus their income potential, than those of us with larger sums which provide greater cushion to absorb these trading anomolies.

[fible1]

Thanks, Pablo.

I just want to chime in another thought on what my ideal stop loss function would look like.

I notice a lot of the time the bot will make trades that will lose money, not large sums, but enough that over time my account would get nickeled & dimed to a significant extent.

For example the first trade it ever did was selling low & buying high, and it didn't just happen that 1 random time- it's happening so often that it's indicating that it's a common occurance. So somehow the bot sees trends and does what it thinks is best even when it's not always best, and I can't help thinking there must be a way to code a subroutine to check for these scenarios and protect against their occuring.

If somehow the trading engine can be programmed to only make profits, and not trade at a loss in these cases when it does so, the savings would add up I think.

For people who are trading with smaller amounts of money, these 3-9% losses are more of an impact on their working capital, and thus their income potential, than those of us with larger sums which provide greater cushion to absorb these trading anomolies.

Hey ,
  This has been suggested before, the issue with this idea is that it assumes BTC will always appreciate. You can code a routine where the bot checks buy price and only sells if its at a profit, that's amazingly easy, but it's trading suicide if the market takes a downturn or you have a flash crash.

EMA provides pretty good protection against flash crashed with the shorter time frames, yes you get nickel and dimed (EMA will provide about 70% small loss trades to 30% solid profit trades) on some trades but we have to let the bot do it's job and make all those small losses plus your healthy profit back in the long term.

I hope I've explained myself properly, please let me know if you have any questions .

Pablo.

[NginUS]

Ok, I guess I don't understand how it's 'trading suicide' if the market takes a downturn, or if there's a flash crash. Would you mind elaborating on why that is to help me understand?

I assume bitcoin will only appreciate, I take that as a given like gravity always being down. So if the market goes down it will obviously do so after having gone up, and there will have been a bot sell triggered after the bot realizes the rally has peaked- assuming I understand its MO correctly. What's different about if the bottom of the next curve is a little low like it usually is in a typical cycle, or if it's extremely low in the case of either a crash or a tapered downturn- either way, after the curve peaks the bot will recognize the bottom & buy again, right?

I don't see how having a layer of logic to say 'execute buy if buy price lower than sell price else hold for next down curve' could be suicide.

I guess I'm missing something as to why you wouldn't add that logic. Help me understand, please.

[bassclef]

Thanks, Pablo.

I just want to chime in another thought on what my ideal stop loss function would look like.

I notice a lot of the time the bot will make trades that will lose money, not large sums, but enough that over time my account would get nickeled & dimed to a significant extent.

For example the first trade it ever did was selling low & buying high, and it didn't just happen that 1 random time- it's happening so often that it's indicating that it's a common occurance. So somehow the bot sees trends and does what it thinks is best even when it's not always best, and I can't help thinking there must be a way to code a subroutine to check for these scenarios and protect against their occuring.

If somehow the trading engine can be programmed to only make profits, and not trade at a loss in these cases when it does so, the savings would add up I think.

For people who are trading with smaller amounts of money, these 3-9% losses are more of an impact on their working capital, and thus their income potential, than those of us with larger sums which provide greater cushion to absorb these trading anomolies.

Markets are difficult to predict. If one could program a bot to always be profitable, everyone would do it.

There are always losers to winners. The profit you make as a trader is a loss to somebody else.

There are times where the market *should* go up and down, but doesn't, and vice versa. And Bitcoin doesn't always appreciate. There have been numerous bear markets, and sometimes the price stagnates (ranges) for weeks and weeks. That's when EMA trading is helpful--it identifies a (potential) up or downtrend, and trades accordingly to put you on the correct side of it to profit.

[fible1]

Ok, I guess I don't understand how it's 'trading suicide' if the market takes a downturn, or if there's a flash crash. Would you mind elaborating on why that is to help me understand?

I assume bitcoin will only appreciate, I take that as a given like gravity always being down. So if the market goes down it will obviously do so after having gone up, and there will have been a bot sell triggered after the bot realizes the rally has peaked- assuming I understand its MO correctly. What's different about if the bottom of the next curve is a little low like it usually is in a typical cycle, or if it's extremely low in the case of either a crash or a tapered downturn- either way, after the curve peaks the bot will recognize the bottom & buy again, right?

I don't see how having a layer of logic to say 'execute buy if buy price lower than sell price else hold for next down curve' could be suicide.

I guess I'm missing something as to why you wouldn't add that logic. Help me understand, please.

BassClef has made several good points.

Ok, so imagine BTC is at 100 USD and your bot buys. Then BTC falls to 80 USD; with EMA your bot would have sold in the high to mid 90's, but with the "Never trade at a loss logic" you are now holding BTC at 80. Now several things can happen here, BTC can go to 60 or it can go to 200, there are no guarantees (no one can assure that BTC will rise over the long term either) so from a probablilistic point of view, you are better of with you BTC in the high 90's than you are with your BTC in the 80's because, yes, it could rally to 200, but it could also hit 20 and stay there. There are no guarantees in trading.

I hope that helps you understand my point. There are several stop loss options that can be built in, I'm not saying anything bad about stop loss at all, I'm saying completely avoiding trades that will incur a loss is a very bad idea.

Please let me know if you need anything at all .

Pablo.

[NginUS]

I'm still not getting it. I trust that you're the expert & that what you say must be the truth of the matter, but I'm failing to understand it myself.

If I sold at 90 following a rally that peaked at 100, and it either goes to 20 or 80, either way the bot will recognize the bottom curve & buy after the peak. I don't get why it sometimes waits to buy at a bottom curve that somehow got to be higher than the sell point. Why didn't it buy at the first lower peak point after the high point in the cycle where it sold in the first place, because it wasn't far below the sell point enough maybe?

How do these conditions where it trades at a loss develop anyway? Is there another way to protect against being nickel & dimed then by adding 'always profit' logic, since that's unadvisable?

I know you've mentioned that there's a new improved trading engine to be released in the near future. Will it be any better than 70/30 loss/profit? I'd be interested in hearing about how exactly it's been improved.

[fible1]

I'm still not getting it. I trust that you're the expert & that what you say must be the truth of the matter, but I'm failing to understand it myself.

If I sold at 90 following a rally that peaked at 100, and it either goes to 20 or 80, either way the bot will recognize the bottom curve & buy after the peak. I don't get why it sometimes waits to buy at a bottom curve that somehow got to be higher than the sell point. Why didn't it buy at the first lower peak point after the high point in the cycle where it sold in the first place, because it wasn't far below the sell point enough maybe?

How do these conditions where it trades at a loss develop anyway? Is there another way to protect against being nickel & dimed then by adding 'always profit' logic, since that's unadvisable?

I know you've mentioned that there's a new improved trading engine to be released in the near future. Will it be any better than 70/30 loss/profit? I'd be interested in hearing about how exactly it's been improved.

Hmmm, let me think about how we can go about this.

I don't think I've said anything publicly about developing a new trading engine, we are looking into it but it's far from a done deal right now.

We are always trying to optimize the trading strategy and reduce any possible losses .

Pablo.

[PuertoLibre]

I'm still not getting it. I trust that you're the expert & that what you say must be the truth of the matter, but I'm failing to understand it myself.

If I sold at 90 following a rally that peaked at 100, and it either goes to 20 or 80, either way the bot will recognize the bottom curve & buy after the peak. I don't get why it sometimes waits to buy at a bottom curve that somehow got to be higher than the sell point. Why didn't it buy at the first lower peak point after the high point in the cycle where it sold in the first place, because it wasn't far below the sell point enough maybe?

How do these conditions where it trades at a loss develop anyway? Is there another way to protect against being nickel & dimed then by adding 'always profit' logic, since that's unadvisable?

I know you've mentioned that there's a new improved trading engine to be released in the near future. Will it be any better than 70/30 loss/profit? I'd be interested in hearing about how exactly it's been improved.

I guess the only way to prove him "wrong" is to code it and see if it works in practice. (I am of the NginUS opinion)

The big question is how intervene when butter bot wants to do something which we can call an unnecessary trade. (always at a profit)

------------------

The first idea that comes to mind is to watch B-Bots stats and make a trigger that identifies an unnecessary trade.
The next idea is to probably to use B-Bots ability to be disabled as a method of keeping it from doing an unnecessary trade.
Perhaps re-enabling B-Bot again when the circumstances are within what someone could define "at a profit".

------------------

The obstacles that come to mind are what the side effects are to disabling b-bot at random times and then re-enabling it. I have no idea if b-bot will keep working right after an interruption. (would need to be tested)

The user would have to input their settings as to what are the trigger buy/sell values for the EMA separation. (not hard) This is just so that the add-on would trigger before B-Bot does it's trading routine. The question that comes to mind is whether B-bot first trades and then updates it's graph or if it writes the graph first and then executes the trade. Dunno how much of a delay there might be.


=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

[NginUS]

Really you should not be using the BOT if you do not understand that it is not 'willy nilly', the whole point is that over time you will see an increase over a 'normal' human trader, but that may include  taking it in the ass once in a while....
There is a 'run test' function and whilst it is a bit basic, it will give you an idea.

For example the recommended settings would have made a significant loss on Mtgox over the past few days.

It gave me enough of an idea to understand the  functionality is not suitable for trading in such a market at the moment, as it stands the BOT is not quite polished enough, and yep I know it makes money, but is also takes rather more 'hits' than it should.

Personally I'm of the mind that the product is in need of significantly more 'safety mechanisms', but I also do not think that a simple 'stop loss' is the answer, specifically because it can be exploited by other traders and in some cases may well be a significant contributing factor to  a 'flash crash'.

That said and despite the BOT going mad and clearing out all my FIAT, I have still managed to manually trade the account to a significantly better position that the BOT over the last two days.
There are some rather 'shitty' patterns emerging from gox at the moment indicating some very rough BOT trading algorithms.

I agree with your assessment.

It takes more hits than it really should. Which like it or not, deducts from future gains.

Right now I am almost finished writing my own arbitrage bot and testing it through it's paces. I too would like Butter Bot to add certain real time simulation features. I think a simulation feature is better than turning on the bot and letting it do trading. This will help you get an idea of the decisions the bot makes in different situations without risking BTC or USD.

------------------------

I would love it if they made a "secure-bot" to "get you out" of the market in the event of a flash crash. Just that feature alone is very useful if you don't intend to do actual EMA based trading. If you do want a bot to watch the current market conditions on a continual basis butter bot would be a good start if you understand the settings.

I think they should package this separate from the normal butter bot set of features.

-------------------------

There are also other types of already coded software based on ADX that don't take anywhere near "the number of hits" that butter bot takes. (not butter bots fault as ADX is just a better indicator IMO)

There is one publicly available but someone decided the neuter the public code so that it didn't do anything other than prevent losses. I back tested the public version and while it wasn't written to make a profit, it back tested to the beginning of the year and retained 99% value of the currency traded. Had someone with experience redone it to actually "make a profit" it would have no doubt been better than the EMA based bots.

Future version of butter bot will come with different strategies so that people can choose whatever type they prefer.

Hey ,
  All good ideas!

V4 should come with alternate strategy modules, and we are looking at releasing a new and improved trading engine for Butter in the near future to make it even more profitable. Stay tuned.

Pablo.

This is when you mentioned it.

[fible1]

Really you should not be using the BOT if you do not understand that it is not 'willy nilly', the whole point is that over time you will see an increase over a 'normal' human trader, but that may include  taking it in the ass once in a while....
There is a 'run test' function and whilst it is a bit basic, it will give you an idea.

For example the recommended settings would have made a significant loss on Mtgox over the past few days.

It gave me enough of an idea to understand the  functionality is not suitable for trading in such a market at the moment, as it stands the BOT is not quite polished enough, and yep I know it makes money, but is also takes rather more 'hits' than it should.

Personally I'm of the mind that the product is in need of significantly more 'safety mechanisms', but I also do not think that a simple 'stop loss' is the answer, specifically because it can be exploited by other traders and in some cases may well be a significant contributing factor to  a 'flash crash'.

That said and despite the BOT going mad and clearing out all my FIAT, I have still managed to manually trade the account to a significantly better position that the BOT over the last two days.
There are some rather 'shitty' patterns emerging from gox at the moment indicating some very rough BOT trading algorithms.

I agree with your assessment.

It takes more hits than it really should. Which like it or not, deducts from future gains.

Right now I am almost finished writing my own arbitrage bot and testing it through it's paces. I too would like Butter Bot to add certain real time simulation features. I think a simulation feature is better than turning on the bot and letting it do trading. This will help you get an idea of the decisions the bot makes in different situations without risking BTC or USD.

------------------------

I would love it if they made a "secure-bot" to "get you out" of the market in the event of a flash crash. Just that feature alone is very useful if you don't intend to do actual EMA based trading. If you do want a bot to watch the current market conditions on a continual basis butter bot would be a good start if you understand the settings.

I think they should package this separate from the normal butter bot set of features.

-------------------------

There are also other types of already coded software based on ADX that don't take anywhere near "the number of hits" that butter bot takes. (not butter bots fault as ADX is just a better indicator IMO)

There is one publicly available but someone decided the neuter the public code so that it didn't do anything other than prevent losses. I back tested the public version and while it wasn't written to make a profit, it back tested to the beginning of the year and retained 99% value of the currency traded. Had someone with experience redone it to actually "make a profit" it would have no doubt been better than the EMA based bots.

Future version of butter bot will come with different strategies so that people can choose whatever type they prefer.

Hey ,
  All good ideas!

V4 should come with alternate strategy modules, and we are looking at releasing a new and improved trading engine for Butter in the near future to make it even more profitable. Stay tuned.

Pablo.

This is when you mentioned it.

Heh, I knew someone would provide a post .

Well it is true, we are working on it, but there is nothing resolute yet. We are back testing several improvements to EMA and we still have to see if they pan out so the new engine is not a foregone conclusion, the new engine must be more profitable than the current one for us to upgrade it.

I hope that answers your question .

Pablo.

[seanrarey]

Pablo & company, I salute you in your efforts. 

Some pretty counter-intuitive suggesting being brought back up here.  I am going to make my comments brief, because this is all very worn territory.

Profit/loss:
"Magic" does not exist in trading.  Only solid, proven systems.  _No_ system is without loss.

Stop-loss:
EMA cross-over trading _is_ stop loss.  It is designed to keep you in a bull market and out of a bear market.  Attempting to "add" a stop-loss to this system creates a double-negative and short-circuits the system.  You will lose.  If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back.

"Flash-crash" protection:
When trading manually, the best protection in a flash-crash is to walk away & go eat dinner.  If you join the panic buy/sell, you lose.  You are _always_ far ahead when you wait and catch the rebound caused by the heavy market pressure.  I have had great success programming the bot to do this automatically.  It often means slowing the trade down; you need to wait for the snap-back.

This bot is wildly profitable, and very configurable.  Most everything you are asking for is already here; you just need to understand how the bot works and how to set it up.

[PuertoLibre]

Stop-loss:
EMA cross-over trading _is_ stop loss.  It is designed to keep you in a bull market and out of a bear market.  Attempting to "add" a stop-loss to this system creates a double-negative and short-circuits the system.  You will lose.  If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back.

I am using reverse EMA strategy so I am unsure if it applies.

" If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back."

I'd also like to point out that some of the same arguments are being used in reverse on either side of the issue.

If a flash crash happens says side A, then EMA will keep get you out of it. There is no guarantee the market will go up again we are told.  People pointed out that there is no guarantee that the price will recover. Alright, that is probably true.

Now the same point is being used (the snap back "will happen") as-if it were guaranteed....

Perhaps we need to all get on the same page.

===========================

Either way, I understand both positions to the best of my ability.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

[PuertoLibre]

"Flash-crash" protection:
When trading manually, the best protection in a flash-crash is to walk away & go eat dinner.  If you join the panic buy/sell, you lose.  You are _always_ far ahead when you wait and catch the rebound caused by the heavy market pressure.  I have had great success programming the bot to do this automatically.  It often means slowing the trade down; you need to wait for the snap-back.

I think you are referring to the notion of market corrections.

Any trend that is too one sided is bound to retrace. (applies in both bull and bear markets)



(snapshot from last night)

For example, the MtGox Exchange is overbought across the long term ranges. It seems to be primed for a massive correction pretty soon.

==========================

While I am on the topic of retracements. Last night I used B-Bot in a new configuration and I noticed that it kept trying to buy repeatedly after it already bought using all available funds (whatever was made available to it). It appears that it repeatedly sends emails even though it has already used all available funds.

The same was true of selling. It kept sending messages that the sell trigger was reached despite already having sold everything available to it.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

[fible1]

"Flash-crash" protection:
When trading manually, the best protection in a flash-crash is to walk away & go eat dinner.  If you join the panic buy/sell, you lose.  You are _always_ far ahead when you wait and catch the rebound caused by the heavy market pressure.  I have had great success programming the bot to do this automatically.  It often means slowing the trade down; you need to wait for the snap-back.

I think you are referring to the notion of market corrections.

Any trend that is too one sided is bound to retrace. (applies in both bull and bear markets)

==========================

While I am on the topic of retracements. Last night I used B-Bot in a new configuration and I noticed that it kept trying to buy repeatedly after it already bought using all available funds (whatever was made available to it). It appears that it repeatedly sends emails even though it has already used all available funds.

The same was true of selling. It kept sending messages that the sell trigger was reached despite already having sold everything available to it.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

Hey ,
  I am dropping you a PM right now so we can get your console logs and debug that situation .

Pablo.

[PuertoLibre]

Problem, I already reset my PC last night this morning. Do the console logs survive across resets?

[fible1]

Problem, I already reset my PC last night this morning. Do the console logs survive across resets?

Hey ,   
  No, they don't. Let's watch your bot and if the situation repeats itself please send me your logs then . I suspect this is a non-repeat situation.

Pablo.

[San1ty]

fible1:

I don't know if you read these comments but imho they are pretty relevant.
Did you have a look at MACD yet? Any questions about it?

- EMA Crossovers are basically a pretty weak trading system. If you like MA's a lot you should consider switching to MACD as it is superior. (http://en.wikipedia.org/wiki/MACD)
- I notice you have to set the trading fee manually (this should be an api call to the exchange every X minutes to check what the trading fee is). Bitstamp has a trading fee based on your volume.

[seanrarey]

Stop-loss:
EMA cross-over trading _is_ stop loss.  It is designed to keep you in a bull market and out of a bear market.  Attempting to "add" a stop-loss to this system creates a double-negative and short-circuits the system.  You will lose.  If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back.

I am using reverse EMA strategy so I am unsure if it applies.

" If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back."

I'd also like to point out that some of the same arguments are being used in reverse on either side of the issue.

If a flash crash happens says side A, then EMA will keep get you out of it. There is no guarantee the market will go up again we are told.  People pointed out that there is no guarantee that the price will recover. Alright, that is probably true.

Now the same point is being used (the snap back "will happen") as-if it were guaranteed....

Perhaps we need to all get on the same page.

===========================

Either way, I understand both positions to the best of my ability.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

A good experiment for you would be to buy Stephen Haas' Simple Trade Bot.  It is versatile, and will let you do most if not all of what you are suggesting.  I have run it side-by-side with Butter for months.  It has never come close to matching Butter's performance.

RSI, "reverse" EMA, MACD all seem like a great idea; until the market runs away from it and strands the bot.

With the different bots I run (if it is available, I buy it), it is the simplest one that constantly makes me the most money.

There are some features I want very much and am looking forward to, but I would be quite happy if they left the trade engine exactly as it is.  I keep coming back to it from the more complex machines.

[San1ty]

Stop-loss:
EMA cross-over trading _is_ stop loss.  It is designed to keep you in a bull market and out of a bear market.  Attempting to "add" a stop-loss to this system creates a double-negative and short-circuits the system.  You will lose.  If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back.

I am using reverse EMA strategy so I am unsure if it applies.

" If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back."

I'd also like to point out that some of the same arguments are being used in reverse on either side of the issue.

If a flash crash happens says side A, then EMA will keep get you out of it. There is no guarantee the market will go up again we are told.  People pointed out that there is no guarantee that the price will recover. Alright, that is probably true.

Now the same point is being used (the snap back "will happen") as-if it were guaranteed....

Perhaps we need to all get on the same page.

===========================

Either way, I understand both positions to the best of my ability.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

A good experiment for you would be to buy Stephen Haas' Simple Trade Bot.  It is versatile, and will let you do most if not all of what you are suggesting.  I have run it side-by-side with Butter for months.  It has never come close to matching Butter's performance.

RSI, "reverse" EMA, MACD all seem like a great idea; until the market runs away from it and strands the bot.

With the different bots I run (if it is available, I buy it), it is the simplest one that constantly makes me the most money.

There are some features I want very much and am looking forward to, but I would be quite happy if they left the trade engine exactly as it is.  I keep coming back to it from the more complex machines.

I have a feeling you don't fully understand those concepts if you just try them out and conclude they aren't profitable.
MACD reacts faster to market movements then the MA crossovers butter-bot uses.

As far as the haasonline bot goes, it's pretty nice and has a lot more options, but the trading systems he currently has implemented for example macd is not according to the spec, so it's hard to judge.