serious discussion on the strategy of the manipulator. Please no flame posts

[Edward50]

OK, I want to keep this post academic, so if you are here to flame just click away please. If you don't feel there is a manipulator also just click away I heard enough about how there is none. This is to discuss the possible strategy of a manipulator if one exists.

I would like try and discuss the strategy of the manipulator, here are some questions maybe some of you can give insight on.

Why does he put up Build walls at every .05 cents? Why not just put up one huge build wall.

Why does he just not buy bitcoins to force the price higher, why does he use bidwalls right below the price, usually setup every .05 cents within a dollar lower than the price. To me it seems that he is just trying to stabalize the price, then trying to make a quick buck. Do you think that people base their purchase on bitcoins by looking at the bid side demand?

Why does he pull out sometimes, and cause the price to plummit, when it looked like he bought so many bitcoins with his walls to try and maintain the price.

Why does he use bidwalls? Would it not be better to just not put in any bid orders, and just continue to buy on the spot or have a bot buy on the spot?

Is his intention to make a quick buck, or is it to stabalize the price and help the long term price of bitcoins?

These are just some questions to help along the topic of his strategy. These are things I have noticed from watching the bid order side of mt gox. pretty much from around $20 dollars to now. If you have any other ideas or insights about the his strategy please post.

Remember, If you come here to flame and start with the "There is no manipulator your a #%#*%#*," just click away please.

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[gusti]

manipulator = bitcoinica hedging positions ?

[Swishercutter]

Profit by leverage.  If you have enough leverage a $.50 swing can make you quite a bit...especially if you can do it over and over.  A $.50 swing when the price is $5 is 10%, if the price was higher you would need higher swings (or significantly more money invested) to create the same profit.  It benefits those with leverage to have the price at a certain "mid-ground" in order to keep the investment total and possible profit just where they need it. 

[TiagoTiago]

How much does the manipulator spends? I mean, while the forum was down during the Cosbygate incident, i saw a guy on the IRC channel that said he had already spent over 5 thousand USD to try to keep the price from going bad while the forum was down (i'm not clear on what he considered bad though); is the manipulator spending much more than that?

[ineededausername]

Cosbygate

We're calling it Cosbygate now? 

[mute20]

Cosbygate

We're calling it Cosbygate now? 

I assume it is a riff of watergate

[Minsc]

The only evidence I've seen of a manipulator is when all the buywalls suddenly vanish with no one selling into them.  When it dropped from $6 to $4 or so last month, someone just removed all the ones at once, probably the same person.  Then last Wednesday night, someone removed every single buy order from $5.01 to $5.45.  They just went.  Nobody was selling.  Someone just cancelled them.  So it seems that there's one or two people with lots of money that have most of the buy and sell orders.

You know, come to think of it, this guy who has all the large buy and sell orders might in fact be the one who dumped 20,000 coins last night.  He just sold them to himself and with his activity, MtGox fees are only 0.0025 for him.  If he has done that, then I suspect he's done it lots of times before.

One odd thing I've noticed is a large buy or sell order appears and it's right near the edge of where buying or selling is.  It lasts 5 seconds, moves the price a penny in one direction, then dissapears.  Then it comes back a minute later raised of lowered slightly and only lasts 5 seconds before dissapearing, repeat ad naseum.  I don't know why he does this.

How much does the manipulator spends? I mean, while the forum was down during the Cosbygate incident, i saw a guy on the IRC channel that said he had already spent over 5 thousand USD to try to keep the price from going bad while the forum was down (i'm not clear on what he considered bad though); is the manipulator spending much more than that?

No, just a good Samaritan with lots of money.  Maybe Bruce?  But the Manipulator's buy and sell walls consist of maybe 500,000 USD, not merely 5,000.

[RyNinDaCleM]

Here is the way I see it!
He puts a large wall up on the sell side, causing people who want to get an order executed to trickle over the top and down in front. He then pulls his order causing a very thin market near the going rate, and he sweeps them up as to not move the price up higher than needed. And, repeat!

On the buy side, it's to show false support (ex. demand), therefore, causing the other buyers to raise their bids, so he can sell higher, and again, not to lower the price more than is necessary!

Then you'll, on occasion, see a rather large wall on both sides! I believe this is when he is taking a break (sleep) so he knows the price will still be where he left it when he picks back up where he left off!

It's mind games really! This is someone with experience in stock trading, manipulation, and psychological reaction, and wanted an easy profit!

I believe he can force the price to where he wants, when he wants! When you have 25K+ BTC, and $100,000 at the same time, well, you have that kind of power!

I saw yesterday evening though, the bid wall for about 5000BTC, someone dumped 3300BTC into it, and I haven't seen it since! I don't think he was going for that outcome!

This is just what I have observed over the past few weeks! I have made a lot of money following these "games"! I wish I had FRAPS to record as things unfold, however, I never knew until it was about to happen, and I don't have unlimited HDD space!

...if the price was higher you would need higher swings (or significantly more money invested) to create the same profit. 

No you don't! A $.50 rise x 1000BTC is $500 whether it's $1/BTC or $100/BTC! The volume is where you make money!

[Minsc]

I believe he can force the price to where he wants, when he wants! When you have 25K+ BTC, and $100,000 at the same time, well, you have that kind of power!

I would like to know how to predict his behavior so I know beforehand if he will raise or lower it.  How can I do that?

[Minsc]

I just remembered one thing he did last month.  He made this enormous buywall $1 higher than the regular price and he had it for 100,000 coins.  People first were selling into it, and then bots and speculators put a bunch of buy orders in front of it so they were buying it up.  It was rallying big and he wasn't buying anything up anymore.  And then suddenly he removed his buywall and the price crashed down $1 lower and started crashing.  About 45 minutes later, he puts the same buy order back and then he kept it back for an hour.  I think he did that a couple other times around then where he leaves it up for a minute and then drops it totally, making the price swing over $1 each time.

[ineededausername]

I just remembered one thing he did last month.  He made this enormous buywall $1 higher than the regular price and he had it for 100,000 coins.  People first were selling into it, and then bots and speculators put a bunch of buy orders in front of it so they were buying it up.  It was rallying big and he wasn't buying anything up anymore.  And then suddenly he removed his buywall and the price crashed down $1 lower and started crashing.  About 45 minutes later, he puts the same buy order back and then he kept it back for an hour.  I think he did that a couple other times around then where he leaves it up for a minute and then drops it totally, making the price swing over $1 each time.

 

I wish mtgox made recordings.

[Swishercutter]

...if the price was higher you would need higher swings (or significantly more money invested) to create the same profit. 

No you don't! A $.50 rise x 1000BTC is $500 whether it's $1/BTC or $100/BTC! The volume is where you make money!

Correct...but the initial investment is more (1000BTC @$5 makes only a $5k risk, whereas 1000BTC @ $20 is a $20k risk).  Also, percentage wise you would need to not only invest more but also make a greater swing to make the same percentage of initial investment.  It's easier to manipulate a $.50 swing @ $5 than it is to make a $2 swing @ $20.  In my opinion it's not about the profit made but the profit vs. initial investment.

Obviously, I am not a market genius...just using my logic and seeing what I would do if I had the ability/money to "game" the market.

[mjcmurfy]

Maybe the manipulator is mtgox themselves!
They have copious dormant amounts of both bitcoin AND usd in their accounts.
And access to all the trade data in detail, which they only release the previous 24 hours of to the public, and in limited form.

dun dun dunnnnnn..

[Cluster2k]

Why does he put up Build walls at every .05 cents? Why not just put up one huge build wall.

Bitcoin's price can move rather rapidly.  You're assuming one set (one bid wall) is the right trading approach and the right price.  Maybe various people have different opinions about where the price is going.  Some may put bids in at $5.45, some at $5.40, others may prefer $5.30.  Prices are not set by one person (the alleged manipulator).

Why does he just not buy bitcoins to force the price higher, why does he use bidwalls right below the price, usually setup every .05 cents within a dollar lower than the price. To me it seems that he is just trying to stabalize the price, then trying to make a quick buck. Do you think that people base their purchase on bitcoins by looking at the bid side demand?

It's about price volatility again.  Someone fires 20k bitcoins into the bids and fulfills many of the orders.  I regularly put staggered bids and asks onto MtGox for this very reason.  You would see my bids as manipulation.  I see it as smart hedging against risk and taking advantage of market volatility when it occurs.  If the price starts falling because people are selling like mad then I withdraw my bids in anticipation of a lower price.  That's not manipulating the market.  That's just not being stupid.

Why does he use bidwalls? Would it not be better to just not put in any bid orders, and just continue to buy on the spot or have a bot buy on the spot?

Markets don't really work like that.  Have a look at share trading and you'll always see a lot of 'depth': bids and asks way above and below the current spot price.  If everyone is only buying at the spot price than the spot price isn't going to move.  People can't see how much interest there is in the market.  Someone wanting to sell 20k of bitcoins would see only a few dozen being traded at the current spot price.  Could they sell those 20k in one hit without market depth?  They couldn't.

I get the feeling that this mysterious 'manipulator' (always singular, always one person) is being blamed for odd market trading, and even blamed for bitcoin's continuous flagging price.  It all sounds a little like a conspiracy theory with very little evidence.

[Minsc]

Maybe the manipulator is mtgox themselves!

Evidence against: MtGox already makes $10K-$1000K a day from its fees.
Evidence for: MtGox won't let you withdraw more than 100BC a day and more than $1000 a day (max $10,000 a month) so The Manipulator will have trouble cashing his investment in using only a small number of accounts, so a non-MtGox manipulator would use lots of accounts and not have all his money and coins t in one account and the buy and sell walls that are huge that show someone is manipulating them I've seen them appear and dissapear at the exact same time, never incrementally.

[RyNinDaCleM]

Maybe the manipulator is mtgox themselves!

The Manipulator will have trouble cashing his investment in using only a small number of accounts, so a non-MtGox manipulator would use lots of accounts and not have all his money and coins t in one account...

I've often wondered this same thing! If you have enough in each account, you wouldn't have to worry about "today's trades"! There could be an account for "wall trickery" as storage, and a primary for the execution!

As for a conspiracy? I'm a paranoid person! Everyone is out to get me! So, I calls it like I sees it! And, some of the movement I've seen (not price swings) in the walls inching across the chart, someone is obviously doing this intentionally!

[Serge]

Maybe the manipulator is mtgox themselves!

The Manipulator will have trouble cashing his investment in using only a small number of accounts, so a non-MtGox manipulator would use lots of accounts and not have all his money and coins t in one account...

I've often wondered this same thing! If you have enough in each account, you wouldn't have to worry about "today's trades"! There could be an account for "wall trickery" as storage, and a primary for the execution!

As for a conspiracy? I'm a paranoid person! Everyone is out to get me! So, I calls it like I sees it! And, some of the movement I've seen (not price swings) in the walls inching across the chart, someone is obviously doing this intentionally!

Can there ever be unintentional market movements?

[RyNinDaCleM]

Maybe the manipulator is mtgox themselves!

The Manipulator will have trouble cashing his investment in using only a small number of accounts, so a non-MtGox manipulator would use lots of accounts and not have all his money and coins t in one account...

I've often wondered this same thing! If you have enough in each account, you wouldn't have to worry about "today's trades"! There could be an account for "wall trickery" as storage, and a primary for the execution!

As for a conspiracy? I'm a paranoid person! Everyone is out to get me! So, I calls it like I sees it! And, some of the movement I've seen (not price swings) in the walls inching across the chart, someone is obviously doing this intentionally!

Can there ever be unintentional market movements?

Well, you get the point...err nvm, stricken from the record! XD

[Revalin]

I'll bet you haven't seen a lot of charts like that.    Resolution is 1hr/px X, $0.01/px Y.  Stare at it long enough and you'll start seeing when the major players move in and out of the market.  

Edit:  Also, the funny pixelation you see around the trade line isn't JPEGing.  This is a PNG, pixel-perfect.  That's all real data.

[Swishercutter]

I'll bet you haven't seen a lot of charts like that.    Resolution is 1hr/px X, $0.01/px Y.  Stare at it long enough and you'll start seeing when the major players move in and out of the market.  

Edit:  Also, the funny pixelation you see around the trade line isn't JPEGing.  This is a PNG, pixel-perfect.  That's all real data.

Just curious (and too lazy to do the pixel math) how far does this go back...it's interesting and very informative.  I am glad to see someone is on their toes about the data tracking...btccharts is about as far as I go, which is also why I don't trade much.