It's definitely not just bots trading, but there are indeed bots. Cex.io does not charge any transaction fees for every trade you make. They receive a nice commission every time a block is found.
In terms of profitability, if the price of GH/s on Cex.io stays the same over time while you unload your profits there to purchase GH/s, technically you're not losing any "money" and you'll be making a tiny profit from the mining (it really depends on how much GH/s we're talking about).
But if during your time the price goes from 0.04/GHs to 0.03/GHs, it'll eat away at your profits if you want to withdraw. Just like you said. It *is* a gamble and if you're comfortable with it, keep at it!
By trading effectively, it can be easier (not easy) to expect imminent dips/crashes and large increases. That's where the trading profit lies.
Yep there are bots. In fact my own personal bot made a mistake during an arbitrage calculation and single handedly caused a runaway drop in prices.
I had less than 5GHS when it started and ended up with 10GHS by the time everything was finished, but it drove the damned price down something fierce in the process.
That tells me that MOST of the volume is bot driven since the bots were reacting to my bot doing something completely unexpected (offering to take a massive loss on one side). Most of the bots seemed to be trading on this signal and continued pushing the price down probably because y'all are runnin the same software, which caused a panic.
Here is an explanation of what was going on my end.
After careful analysis I noticed that that there was a periodic profit opportunity in GHS->BTC->NMC->GHS that would flip around to GHS->NMC->BTC->GHS about every 20 minutes or so.
I whipped up a bot in node.js to watch those lines and trade with them as the opportunities opened up.
Unfortunately, the BTC/NMC rate was flipped in my bot's "it's time to trade!" calculations. Thus it sold my GHS to BTC at a massive loss and offered to buy GHS with NMC at a significant premium above the going rate.
All the other bots started reacting and drove the price down. I killed my bot after about an hour or so and went about flipping everything back into GHS. The push down in price allowed me to double my GHS, but my bot would have left me bankrupt had I let it keep going. I just got fortunate because the blood shed continued well past my bot's own actions and my bot had left me with BTC & NMC purely by accident of placing crazy trades.
So guys, here's a tip. If you have a bot doing your trading on CEX.io, look at your thresholds and have it consider the whole order book along with depth, not just the "last" ticker (ticker is screwy anyways). Otherwise when I get around to rewriting this thing it's going to wipe you out.
For those of you not botting it. The price of GHS is only going to drop. It's value as source of revenue drops at a rate of whatever the difficulty level increase for BTC is. However it's price seems to be dropping even faster than difficulty increases, which means if you buy you're losing BTC faster than you're earning it back.
You can still make money, but you need to look at a timeframe of no more than 24hrs at a time. Look at the 24 hr range and buy/sell as close to the peaks and valleys as you can manage. There are no fees so you can take advantage of even miniscule changes in price without eating it in trading fees.
Buy low, sell high and make sure you buy more GHS with about 50% of the BTC that is generated by your GHS as it comes in. Flush the rest to fiat on a regular basis and buy back into BTC when the BTC/USD rate drops, sell it when it breaks out of it's 24hr peak. When you do your daily sale of GHS to BTC flush 50% of your profits (always sell at either a profit or near the 24hr high), flush 50% to fiat and hold the rest until the price comes back down near, at or below the 24hr low.
There is a lot of money to be made, you just have to be smart about it. Your simple algo bots will bankrupt you if they are selling based on the ticker instead of the market depth.
